Discuss about the Business Plan for Max Mobile Pet Grooming Business.
According to Australian veterinary association, in 2013 there were estimated to be more than 25 million pets in Australia with about 5 million of the 7.6 million of households in Australia being home to a pet(“Australian Pet Industry Statistics and Trends | Pets Australia”, 2017). Of this, dogs are the most common pets with 39% of households owning dogs as pets. Cats are the second most popular pet in Australia with 29% of all households owning cats (“Start a pet business in the pet industry | Pets Australia”, 2017). The population of cats in Australia is approximately 3.3million which is an average of 15cats for every 100 people (“How many pets are there in Australia? – RSPCA Australia knowledgebase”, 2017). The above statistics informs my choice of specializing in grooming of pets.
The services offered will be mobile grooming of cats and dogs. Max mobile pet grooming will offer a wide variety of special products for pets depending on the needs of the pet and the desire of the pet owner. The services will include; clipping of long nails to make them short in order to prevent the pet from causing injuries to the pet owner, trimming of long hair to make it tidy, blow drying, shampooing and styles such as safe hair drying and style cuts such as lion cuts.
The target market for the business is pet owners in western Sydney, Australia. This is informed by the large population of pet owners in the city as well as gaps identified as explained in the following paragraphs.
From the statistics of pet ownership in Australia, it can be deduced that there is a large number of pets in the western suburbs of Sydney.
The business will be started with the aim of providing pet grooming/cleaning services to clients at their door step. There is a very large population of working class people living in the western suburbs of Sydney. Most of this people spend a lot of time in their work places such that it`s difficult to find time in between their busy schedule to groom their pets.
In addition to this, most of the companies that already exists in western Sydney that offer pet grooming services require the client to visit their work stations. Most of these workstations are located in town far from where the customers reside. Given that everyone loves comfort and convenience, most pet owners may forego the idea of having to drive for long distances in order to have their pets groomed. This leads to pet owners deciding to do grooming themselves no matter their circumstances. Sometimes they are forced to hire somebody who is not an expert to do the job. From the above statement, it’s clear that a gap exists for accessible pet care services. Max mobile pet grooming will seek to fill this gap by providing pet owners with mobile pet grooming services at the convenience of their home or whenever else the clients may want us to visit them within the suburbs of Sidney. The choice of Sydney suburbs as the location of the business is because of its large population of pet owners coupled by high levels of disposable income. This consequently means that there is a large population of pet owners in Sydney and most of this people are willing and able to pay for these services.
The clients will get in touch with the company by making telephone calls or via e-mail for them to place an order for their pets (Grönroos, 1996).
Max mobile pet grooming customers will be reached by the use of a car as a means of transport. A single car will be used to reach to customers in the extensive Sydney suburbs because of the limited amount of resources at our disposal. As the business grows and expands, more vehicles will be acquired in order to cater for the increasing number of customers and provide the services efficiently.
There is a very high level of competition in this business of providing pet grooming services. The biggest competitor in this business will be the established vets and animal shelters around the western suburbs of Sydney. There is a large number of companies that offer a range of products to pets. These products include pet training, dog boarding, pet sitting, veterinary care as well as grooming. Given the complete package offered by these competitors, the business will have to deal with this competition bearing in mind that our business will provide only pet grooming services. These existing businesses may also enjoy economies of scale since they cater for large number of pets at the same time. This may result to them offering their services at very low prices. The vets and shelter markets will also not incur any transportation costs since they offer their services and products at a specific location unlike this business which will require constant traveling to reach our customers and this gives these companies extra advantage (Lan, 2009).
Apart from competition from the established local vets and shelter markets, there is also increasing number of businesses of the same nature as this business who offer mobile pet grooming services. To deal with this competition, the owners will have to ensure the highest level of efficiency as well as customer satisfaction is achieved.
With the levels of competition in this business, aggressive marketing strategies need to be applied for the business to break even. This means that a lot of advertising needs to be done to inform prospective clients of the existence of our business. Since mainstream media advertising is expensive and there are very limited financial resources, the plan is mainly to use social media advertising as well using friends and family. A facebook account will be created with the business name which will enable customers and the business owners to interact with ease. This will also enable the Max pet grooming to get feedback after transacting with its customers and this information will be acted upon to improve service delivery and customer satisfaction (McColl-Kennedy, 2001). The business shall also use the first bunch of customers to spread word of the existence of the business as well as the excellent services we offer so as to attract more and more customers to the business. This method is cheap but it will take a great deal of time to establish is strong customer base. As the business grows and revenues increase, more effective means of advertising such as use of local print media will be used. This means of advertising will be able to reach many potential clients hence increasing the number of customers.
To market Max mobile pet grooming and make it appealing to customers, the business shall offer products and services at prices that are affordable to all pet owners irrespective of social class or level of income. Competitive pricing method will be used to come up with the prices for products and services. The number of products that a customer wants for their pet will also determine the amount to be charged. Affordable pricing will help the business attract clients who felt that they were being overcharged elsewhere or they could not afford to groom their pets before.
Max mobile pet grooming will offer this products and services to its customers at the comfort of the client. This customer will just need to make a call and their order shall be acted upon within the minimum time possible. Pet owners will also be saved the hustle of transporting their pets for grooming because Max business will bring the services to them without having coming to the premises. This will be very convenient for most pet owners because they won’t have to forego other activities to groom their pets and it shall also save them time.
Another marketing strategy that shall be used is ensuring good and friendly customer services and relations. This will be achieved through hiring staff who are experts at pet grooming in order to offer customers value for their money. The staff must also be courteous and cordial towards the clients so that the customers can enjoy the experience and quality of services offered by the business. This will go along way in establishing customer loyalty.
It will also be important to get feedback from customers in order to provide insight to business owners who can use this information to improve on services and products offered. Customer feedback will also be crucial in forecasting as well as keeping records of specific customer needs, tastes and preferences. Max pet groomers will get feedback by requesting customers to fill a well structured questionnaire which can be collected later for review.
The business will be a partnership between two friends who have knowledge and experience in pet care and have been working at an animal shelter. This means that there is no need to employ an expert management team. The business will employ six people to assist in carrying out daily activities and this number may grow as the business grows and the customer base expands.
The partnership will be general. This means that the partners are equally responsible for the management of the business and each has unlimited liability for all debts incurred by the business. The partnership can be incorporated in future after substantial growth. The business will have offices within the western suburbs of Sydney where the management will be housed. Customers can also visit and make inquiries during the official working hours.
The organizational structure of Max mobile pet grooming services
A partnership agreement will be drawn after which the business name will be registered. All the legal requirements will be fulfilled before the business starts its operations.
The financial plan is the most important section of any business plan. The financial plan will be important in the pet grooming business because it will enable the owners to outline the business`s growth strategy as well as budget for the available finances. The starting capital for this business will be $55,000. These funds have to be managed well in order to buy all the necessary equipment and manage to run all the activities of the organization smoothly. Financial statements need to be forecast in order for the owner to have a picture of the future ahead of the business. These projected financial statements can be used later as a benchmark against performance of the business/organization (Sandy, 1990). Below are the projected sales and cash flow statements for the first three months of operation.
|
sales forecast the first three month of opening the business |
||||||||
|
NO OF UNITS PER MONTH(AU$) |
Total monthly sales($) |
|||||||
|
Item/product |
price per unit/pet($) |
july |
aug |
sep |
july |
Aug |
sep |
|
|
shampooing |
2 |
12 |
18 |
25 |
24 |
36 |
50 |
|
|
nail clipping |
1 |
7 |
11 |
17 |
7 |
11 |
17 |
|
|
hair trimming |
3 |
14 |
20 |
27 |
42 |
60 |
81 |
|
|
blow drying |
2 |
9 |
15 |
22 |
18 |
30 |
44 |
|
|
safe hair drying |
3 |
17 |
23 |
27 |
51 |
69 |
81 |
|
|
hair cut |
2 |
25 |
32 |
40 |
50 |
64 |
80 |
|
|
TOTAL |
13 |
84 |
119 |
158 |
192 |
270 |
353 |
Projected cash flow for pet grooming business(first three months)
|
AMOUNT($) |
||||
|
REVENUES |
JULY |
AUGUST |
SEPTEMBER |
|
|
sales revenue |
192 |
270 |
353 |
|
|
other revenues |
54 |
47 |
98 |
|
|
Total cash inflows |
246 |
317 |
451 |
|
|
EXPENSES |
||||
|
office rent expense |
12 |
12 |
12 |
|
|
staff wages |
140 |
140 |
140 |
|
|
transport |
67 |
98 |
130 |
|
|
interest expense |
100 |
100 |
100 |
|
|
Total cash outflows |
319 |
350 |
382 |
|
|
Net Cash Flow |
-73 |
-33 |
69 |
From the above cash-flow statements, the forecast predicts negative cash flow for the first two months of doing business. This is as a result of the fixed cost that is incurred even when sales revenues are low.
Cash flow becomes positive in the third month due to increased sales revenues despite the increase in variable costs. The revenues are more than expenses which signals continuous future growth of the business.
References
Australian Pet Industry Statistics and Trends | Pets Australia. (2017). Petsaustralia.org. Retrieved 12 January 2017, from https://petsaustralia.org/pet-industries/industry-statistics/
Beverland, M., Farrelly, F., & Lim, E. (2008). Exploring the dark side of pet ownership: Status- and control-based pet consumption. Journal Of Business Research, 61(5), 490-496. https://dx.doi.org/10.1016/j.jbusres.2006.08.009
Grönroos, C. (1996). Relationship Marketing Logic. Asia-Australia Marketing Journal, 4(1), 7-18. https://dx.doi.org/10.1016/s1320-1646(96)70264-2
How many pets are there in Australia? – RSPCA Australia knowledgebase. (2017). Kb.rspca.org.au. Retrieved 12 January 2017, from https://kb.rspca.org.au/How-many-pets-are-there-in-Australia_58.html
Lan, J. (2009). Employment Obtaining and Business Starting. International Education Studies, 2(1). https://dx.doi.org/10.5539/ies.v2n1p151
McColl-Kennedy, J. (2001). Special issue on services marketing: Australia. Journal Of Business Research, 54(3), 185-187. https://dx.doi.org/10.1016/s0148-2963(00)00123-5
Pets and People at the End of Life. (2012). Caring For The Ages, 13(7), 16. https://dx.doi.org/10.1016/s1526-4114(15)30692-2
Sandy, W. (1990). Link Your Business Plan to a Performance Plan. Journal Of Business Strategy, 11(6), 4-8. https://dx.doi.org/10.1108/eb039381
Start a pet business in the pet industry | Pets Australia. (2017). Petsaustralia.org. Retrieved 12 January 2017, from https://petsaustralia.org/pet-jobs-and-pet-businesses/how-to-start-a-pet-business/
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