Business Plan Happy Paws Eli Sokerova

1
Business Plan
Happy Paws
Eli Sokerova
HME, 2nd year
2
Table of Contents
1
Summary ............................................................................................................... 3
2
Business Plan description ....................................................................................... 4
3
Market analysis ...................................................................................................... 6
3.1
Size and description of the market and segmentation .................................... 6
3.2
Competitor analysis ........................................................................................ 6
3.2.1
3.3
Competitors information ......................................................................... 7
Projected total market share and units to sale ................................................ 9
4
Operation plan ..................................................................................................... 10
5
Marketing strategy ............................................................................................... 11
6
Finances ............................................................................................................. 112
6.1
Balance sheet and sales forecast .................................................................. 12
6.2
Cash flow statement ..................................................................................... 15
7
Risk management ................................................................................................. 17
8
Conclusion ............................................................................................................ 19
3
1
Summary
Happy paws is a company offering pet care services in the greater Helsinki area. The
form of the company is partnership of four people and all of the owners invest their
own will and money to the company. The company has approximately 20 000 potential
customers. The estimated sales for the first year is 14042 €, of which 4774 € taxes will
be paid in the end of the year and profit for the first year will be 7764 € when all costs
will be reduced.
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2
Business Plan description
Every business will benefit from the preparation of a carefully written business plan.
There are two main benefits and the author explains it. The first is to serve as a guide
for the business and the second is as documentation for financing (Bronfman, 2010).
The first major section of the business plan covers the organizational details of the
author’s business. Include information about the industry, in general, and the business
in particular (Brown, 2003).
Happy paws offers pet care services for pet owners in the greater Helsinki region. The
services are mainly targeted to those pet owners who are going on holiday and do not
have a place where to take their pet or pets during their absence. Services are also
suitable for those pet owners who are busy and do not have enough time for their
pets. The workers will take care of the pets at the customers’ home in order to make
the animals feel as comfortable as possible. They will stay in an environment that they
are used to and dogs or cats do not have to stay in cages like in pet hotels. Moreover
the pet owners will provide the equipment needed.
Happy paws’ services include feeding the pets, playing with them, taking them out,
cleaning and making sure everything is fine with them. The services are different not
only depending on the animal: dogs need much more attention than hamster and
guinea pigs, but also depending on a certain pet: some dogs need to go out more often
than others. This is why the services are very personalized and the owners will provide
workers with the information about the needs of their pets: how many times pets
should be visited in one day, which are their favorite toys or walking routes or what
kind of behavior should be avoided etc.
As the workers are visiting the customers’ houses in order to take care of the pets the
company can offer some additional services for them, for example emptying their
mailbox, doing some basic cleaning or even making sure they have food in the
refrigerator when they come back from their holiday.
The maximum length of the service for one customer is 1 month.
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Customers can contact the staff members via email or mobile phone that can be found
from advertisements and webpage.
Prices:
The company is charging different prices for low and high seasons.
Low season prices January-May; September – November:
Dog: 10 €/day
Cat: 8 €/day
Other animals/additional services: 6€/day
High season prices June – August; December:
Dog: 15 €/day
Cat: 10€/ day
Other animals/ additional services: 8€/ day
If the customer has more than one animal, the first one is for full price and every other
animal would be half of the price. For example, 2 dogs for 15 € in the low season
instead of 20 € and 22.5 € in the high season.
Happy paws will offer a discount for regular and long term customers. If the customer
uses the services more than two weeks, he/she will get 2 € discount every day after
the first two weeks.
Customers will also pay the travel costs.
Payment is done by cash or bank account.
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3
3.1
Market analysis
Size and description of the market and segmentation
A central aspect of every business plan is the marketing strategy. To develop a
marketing strategy, the market and potential customers must be analyzed (Friend,
2004a).
In Finland there are 5.4 million people from whom approximately 1 million own dogs
or cats. About 1 million people live in Helsinki region and Kerava; from these people
about 200 000 are dog and cat owners. It can be presumed that about 1/3 of the 200
000 pet owners travel, from which about 1/3 asks their relatives and friends to take
care of their pets and 1/3 is using pet hotels, then about 1/3 will need Happy paws’
services which means a bit more than 20 000 pet owners. Therefore company’s target
market is rather sufficient for a small business.
3.2
Competitor analysis
To develop a sound strategic plan for an existing or new business it is necessary to
understand the industry in which the business will operate and the competitive forces
within the industry (Schine, 2003). The indirect competitors of Happy paws are pet
hotels and dog day cares in the greater Helsinki area, such as Hännänheiluttajat or
Koirahoitola Hupi&Halli Ky (Anon, 2014). The company’s direct competitors are
relatives and friends of the pet owners as they can often take care of the pets,
sometimes also neighbors can take care of each other’s pets, besides there are some
private people offering pet sitting and dog walking services, such as C.U.P.S. Finland
(Anon, 2014).
Pet hotels competitive advantage is that pets are in safe environment and there is
always someone who looks after them. Happy paws’ are not able to take care of the
pets 24 hours a day, but they are in familiar and comfortable environment, which is
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Happy paws’ strength. The advantage in respect to similar companies are the
complementary services, like feeding the animal or cleaning up the house.
3.2.1 Competitors information
While it is essential to know the competitors of Happy paws, knowing them does not
guarantee the success (Gerson, 1991). The competitor analysis begins with an analysis
of the top three competitors:
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Hännänheiluttajat (for dogs) http://www.hannanheiluttajat.net/
The service for one day includes two 1-2 hour of walking.
Prices:
-month/5 days a week 288 € (day: 12, 95€)
-day 23 € (7.00-18.00)
Food is not included in the prices.
Additionally they also offer full day care; the price is determined by the weight of the
dog.
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Koirahoitola Hupi (for dogs) http://www.koirahoitolahupi.fi/
Address: Pakilantie 61, 00660 Helsinki &Halli Ky
They offer walking services in the morning, day and evening
Koirahoitola Hupi offers day care, weekend care, also for longer periods.
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Additionally they offer trimming services.
Prices:
Weekend holidays:
-
dogs under 25 kg : 36 €/day
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25-39 kg: 40 €/day
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over 40 kg: 45€/day
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more: extra fee 9€ for puppies, extra walk 8€, discount if dog stays more than 8
nights - 4 € discount for each night.
Day care:
-
under 25 kg: 32e/day
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over 25: 37 e/day
Discounts – 2€ less for regular customers whose pet stays more than 4 days
Payment is done only by cash.
The customers have to bring food for dogs.
Additionally: two dogs can stay in one cage.
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C.U.P.S. Finland, Pet Services and Professional Animal Care
http://cupspetsitters.weebly.com/index.html, and they also have a Facebook
page
Their services are:
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Dog Walking
-
Washing/grooming
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Feeding
-
Basic training
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-
Visiting vet
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Giving advices about health care
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Help to resolve different dog behavior problems
The services are offered in customers own house. They have experience with animals
and they also can help with dog behavior problems. There was no information about
the prices nor in the webpage or Facebook page.
3.3
Projected total market share and units to sale
The market analysis strategy are an important part of the marketing plan within the
business plan. The marketing plan includes qualitative aspects and the quantification
and forecast of demand and sales (Morgan, 2007). There is a lot of demand for the
services similar to Happy paws’, but there are not so many suppliers or huge
competitors. There are other small companies who offer mainly dog walking services,
but as there are 20 000 pet owners in Helsinki region and Kerava in need of the
services, so their services are not making any harm to the business. At the beginning
the business will not be so big, because people are not familiar with the company and
there are only 4 people working, but as soon as the company becomes more popular
and more people know about the services, there will be more money to pay salaries
and the company will be able to hire other employees.
This chapter covers the most important aspects of market analysis and strategy, which
should be sufficient for smaller businesses (Vinturella, 2003).
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4
Operation plan
The company has the form of a partnership between four members. The owners of the
company are Eli Sokerova, Victoria Bologa, Gemma Waltan, and Jenni Rakista. All of
the owners have equal responsibilities, duties and rights. They will invest their own will
and money to start Happy paws business. Each of them will all have their own
customers, but in a case of for example sickness they can substitute each other. The
company’s monthly income will be fairly divided into 4 parts taking into consideration
the amount of work each of them has done and that will create their income; after the
sixth month they will hire other part time employees.
At the beginning, with only the four owners working, the maximum capacity of the
company will be 16 sold units per month, where one unit means taking care of one
pet for one week’s duration. If two employees are hired the capacity will rise up to 24
units per month. However there can be more customers if they only need the services
for one or few days. When Happy paws becomes popular more workers will be hired in
order to increase the monthly capacity.
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5
Marketing strategy
Marketing is considered by most to be the most important part of a business plan
(Friend, 2004b). An important aspect of the business plan is to provide the reader with
a good sense of how the company interacts with customers to track their changing
requirements. The business plan should clearly demonstrate knowledge of the needs
and requirements of the customers’ base (Smith, 2012). According to Price (2004), the
marketing section of the business plan defines all of the components of the marketing
strategy. Through marketing strategy, it will be addressed the details of the market
analysis, sales, advertising, and relations campaigns.
In marketing of the Happy paws inexpensive marketing methods such as mouth-tomouth marketing, posters, leaflets, web page, Twitter (https://twitter.com/#!/) and
Facebook (Happy paws | Facebook) pages will be used. Twitter and Facebook pages
are free so they will not cause any costs. The owners are willing to pay a little fee for
an IT expert for creating the webpage. The posters and leaflets can be obtained from
one of the owner’s relative’s company for free or for a very low price. Posters will be
put on bulletin boards around the greater Helsinki area and especially in the areas
around the owners’ homes. Leaflets will be distributed mainly to dog owners, people
in dog parks and who are going to pet fairs or happenings. The owners are planning to
give out leaflets outside of the doors of the fairs or happenings and tell the people
about the services and ask their opinions.
The owners will put up 100 € for marketing causes.
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Figure 1: Happy paws poster
6
Finances
Policy and control are key ingredients of any successful business. Policy established
what the business will do. Control measures the accomplishment of policy goals
(Bangs, 2002).
The heart of the operation is in the accounting system. Pinson (2004) advices that
before you start your business, it is essential that you have a competent accountant
set up a system to give you adequate accounting records. Financial Documents are
those records used to show past, current, and projected finances (Lavinsky, 2012). This
section contains the major documents of the business plan.
All of the following numbers are in euros.
The start-up capital is 100. There is also a computer which is worth 500.
6.1
Balance sheet and sales forecast
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Balance Sheet Year One
Assets
Cash
100
Equipment
(computer)
500
Fixed assets
Table 1: Balance sheet
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Sales
forecast
for the
first
year:
Ls* Hs*
Service 1
unit price:
Service 2
unit price:
Service 3
units price:
70 105
Months
Sold units in
the first year:
56
70
42
56
1
2
3
4
5
6
7
8
9
10
11
12
8
12
12
14
16
16
18
18
20
20
22
24
Total
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Service 1
units:
Service 2
units:
Service 3
units:
Sales service 1
Sales service 2
Sales service 3
Total sales:
4
6
6
7
8
8
9
9
10
10
11
12
100
3
4
5
4
5
6
5
6
7
8
9
8
70
1
2
1
3
3
2
4
3
3
2
2
4
30
945
350
224
945
420
168
700
392
126
700
448
84
280 420 420 490 560 840
168 224 280 224 280 420
42 84 42 126 126 112
770 1260
504 560
84 224
8330
4270
1442
490 728 742 840 966 1372 1519 1533 1218 1232 1358 2044
14042
Fixed
Business
Expenses
Web page
maintanance
Phone bills
Administrative
costs
Total
3
3
3
3
3
3
3
3
3
3
3
3
36
10
10
10
10
10
10
10
10
10
10
10
10
120
4
4
4
4
4
4
4
4
4
4
4
4
48
17
17
17
17
17
17
17
17
17
17
17
17
204
Table 2: Sales forecast
*Ls – Low season
*Hs – High season
In the sales forecast for the first year Service 1 is indicated as a service for dogs,
Service 2 for cats and Service 3 for other animals. The unit price is for one week. In the
first year it is expected to have 100 dog-, 70 cat- and 30 other animal owners as
customers. The total sales for the first year will be 14042. Fixed business expenses will
be 204 in total for the web page maintenance, phone bills and administrative costs.
6.2
Cash flow statement
Projecte
d Cash
Flow
Stateme
nt - Year
One
16
Month
s
1
2
3
4
5
6
7
8
9
10
11
12
Total
Income from
Sales
49
0
72 74 84 96 137 151 153 121 123 135 204
8 2 0 6
2
9
3
8
2
8
4
1404
2
Total cash
inflows
49
0
72 74 84 96 137 151 153 121 123 135 204
8 2 0 6
2
9
3
8
2
8
4
1404
2
Cash
Inflows
Cash
Outflo
ws
Fixed
business
expenses
Salary
17 17 17 17 17
Taxes
17
17 17 17 17 17 17
100 100 200 200 300 400
477
4
Total profit
204
1300
7764
Table 3: Cash flow statement
Total sales of Happy paws are 14042 euros for the first year.
As the business is growing two part-time employees will be hired, one starting from
the 7th month and the other from 11th. They will be paid 50 euros per week and the
total salary for employees will be 1300 in the first year. Every employee can have max
4 customers in a month.
Taxes will be paid at the end of the year. Taxes will be 34% from total sales. Total profit
will be 7764 euros in the first year that makes 162 euros per person in the first 12
months. The company will not earn a lot of money, but at least it will not make any
loss.
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7. Risk management
Innovation and business development are inherently risky (Pinson, 2006). This section
identifies different types of risk as well as describing strategies to manage and
minimize the impact of risk on a business.
The owners of the company are aware of the risks in the business. There is no financial
risk as a big start-up capital is not needed. However there might be, for example,
problems with the trust between the customers and the workers.
RISKS
Minor consequences
Low likelihood
High likelihood
-
Natural disasters
Issues between the owners
Customers refuse to pay
-
Sicknesses
Accidents
Problematic animals
-
The company would not
reach its customers
-
Customers’ lack of trust
Major consequences
Ways to deal with the risks:
- Natural disasters: no one can affect them, but even if they happen people would still
have their pets and need Happy paws services unless the disaster would be so terrible
that people could not get back to their normal lives.
- Issues between the owners: they are not working so closely together so they could
easily solve some minor problems and their relationships with each other would not
affect the business so radically; also if one of them would like to quit then it is possible
and it would only affect the possible regular customers.
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- Customers refuse to pay: in order to avoid this inconvenient, firstly they will receive a
notification saying that the service has to be paid in a week’s time, and if they still
refuse to pay then the police will be contacted.
- The company would not reach its customers: if the company would not have
customers then there would be no business and the business idea would fail; however
there is not a big investment for the company so would not be a huge financial loss.
- Sickness/accidents: there should be a backup plan, for example one of the other
workers could substitute the sick person for the period of time needed. The company
will have liability insurance in case of accidents that can happen to the pets or
belongings of the customer.
- Problematic animals: getting as much information as possible from the owners in
order to be able to handle the animals, studying about the ways of dealing with
animals, be prepared for different situations and attend first aid courses.
- Customers’ lack of trust: a contract (attachment 1) will be made with the customer
and a copy of the workers ID card will be attached so that customers are sure that
their animals and property are in good hands. Also there will be cooperation with
police in case customers want some guarantee.
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8
Conclusions and reflection
This business plan was made to find out if our company Happy paws – pet care services
- will be successful and profitable. It is discussed the marketing strategy, analyzed the
field of pet hotels in greater Helsinki region and made the sales forecast for the first
year. Furthermore the author also are aware of the risks of our business and how to
minimize them.
Writing the business plan was interesting, as the author is interested in pets. The
author does not have any experience at preparing business plan, but he\she believes
that the business idea will be successful as there are not many competitors in this field
and these services are needed for many pet owners.
According to Crawer (2006), the finished product- the business plan- is an operating
tool which, if properly used, will help the author to manage his\her business and work
effectively towards its success.
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9. Bibliography:
Anon (2014), Pet Hotels in Finland, Retrieved 15.05.2014 from
http://www.hannanheiluttajat.net/
Anon (2014), Pet Hotels in Finland, Retrieved 15.05 2014 from
http://www.koirahoitolahupi.fi/3
Bangs, David, H. (2002), Business Planning Guide: creating a winning plan for success;
Dearborn Trade, Chicago, IL, USA
Bronfman, Ch. (2010), Art of Giving: where the Soul Meets a Business Plan; Jossey-Bass
Brown, R. (2010), A short course in International Business Plan; World Trade Press,
Novato, USA
Crawer, J. (2006), Corporate Social Responsibility and Globalization; Greenleaf
Publishing
Desai, Vasant (2009), Entrepreneurship Development, Volume 1, Global Media, India
Friend, Gr. (2004), Guide to Business Planning; Profile Books, London, GBR
Gerson, R. (1991), Writing and Implementing a Marketing Plan: a guide for small
business; Course Technology\Cengage Learning, Boston, MA, USA
Gordon, E. (2009), Entrepreneurship Development, Global Media, India
Lavinsky, David, W. (2012), Start at the End: How companies can grow bigger and
faster by reversing their business plan; Wiley, Somerset, NJ, USA
Morgan, P. (2007), Small Business Owner; Global Media
Pinson, L (2004), Anatomy of a Business Plan: A step-by-step guide to building a
business securing yours company’s future; Dearborn Trade, Chicago, IL, USA
Pinson, L (2005), Step to small business startup; Dearborn Trade, Chicago, IL, USA
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Price, R (2004), Roadmap to Entrepreneurial Success; AMACOM Books, Academic
Press, Burlington, MA, USA
Schine, G. (2003), How to success as a Lifestyle Entrepreneur; Dearborn Trade,
Chicago, IL, USA
Smith, H. (2012), Learn Small Business Startup in 7 days; Wiley, Milton, QLD, USA
Vinturella, John, B. (2003), Raising Entrepreneurial Capital, Academic Press, Burlington,
MA, USA
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Attachment 1
Happy paws contract
Customer fills:
Customer’s name:
ID-number:
Address:
Phone number:
E-mail address:
Type/ race of the pet(s):
The period of time when services are used:
The service required:
Dog sitting
□
Cat sitting
□
Dog walking
□
other, what?
Additional information:
Happy paws worker fills:
Worker’s name:
ID-number:
Phone number:
E-mail address:
Price of the service:
Customers signature
Worker’s signature
Please note that Happy paws will only take responsibility of accidents and damages which have happened due to the actions of Happy paws’ workers.
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(This original contract will stay at Happy paws files and the customer will get a copy of it. Moreover copies of the ID cards of both, the customer and the
worker, will be attached to this contract.)