Writing A Dog Grooming Business Plan
Before embarking on
writing a dog grooming business plan, a definition of a business
plan is in order. A business plan is a document to identify an opportunity,
research why this opportunity is profitable and the steps needed to capitalize
on the opportunity. The business plan can be a formal document or it can
be written on the back of a napkin but the mere act of writing the idea
down forces you to get the idea out of your head and on paper which helps
find hidden business flaws and makes you think carefully about each phase
of your business.
Writing a business
plan is something anyone can do, even if you don't know anything about
business or finances. Even though the business plan is critical to getting
the idea off of the ground, many entrepreneurs procrastinate when it comes
to preparing a written plan. If you don't know anything about business
or finances, now is the best time to begin learning as the chances of
your business being successful will be limited without this knowledge.
Just as a builder won't begin construction without a blueprint, entrepreneurs
shouldn't rush into new ventures without a plan. The old saying that "those
who fail to plan, plan to fail" is very relevant when talking about
starting a business. SBA's statistics claim over half of new businesses
fail in the first three years and the common factor is poor planning or
under-capitalization (which is also poor planning).
The first step in creating a business plan for your dog grooming business
is just getting started. Writing the business plan may seem overwhelming
at first, but if you break the plan down to bite sized pieces and work
on one section at a time won't seem as daunting. Begin with what you know
first and describe your business and your product or services. Work towards
the more difficult subjects such as marketing, operations and financials.
Don't worry about it being perfect now, just get the concepts on paper
- expand and refine later. If you get stuck on a section in the plan,
skip it for now and come back later when you have more details. Free resources
to help with your plan are available from your local Small Business Development
Center www.asbdc-us.org and the Service Corps of Retired Executives www.score.org.
Who is your audience?
When writing your business plan, you need to keep in mind who your intended
audience is and why you are writing the plan. Why? A plan for the bank
will be less interested in the exit strategy and return on investment
than one for equity investors. Additionally, a plan for written for internal
use will be different than one looking for financing as a bank is not
necessarily interested in detailed operations of the business.
Structure Executive Summary
Business plans tend to have a lot of elements in common. While there is
not a format that all business plans follow, there are generally accepted
guidelines that most follow as the order in which the subjects flow are
not random. The Business Description of a business plan is aimed at painting
a picture of your business and why this business will be successful. The
Marketing and Management sections are researched and a strategy of how
your business will compete and operate is developed. Last financial projections
show in numbers what you explained in the business plan for the sales
Breaking these three major sections down even further, a business plan
consists of six key components:
Managers & Employees
In addition to these
sections, a business plan should also have a cover, title page and table
How Long Should
Your Business Plan Be?
The answer that nobody liked in school applies to a business plan which
is, "as long as it needs to be". The more complex a business
or the more sophisticated investors or funds requested will increase the
length of a plan. An average dog grooming business plan narrative should
be 4-15 pages plus financials and appendix items.
Explain the condensed
version of the business concept
The executive summary is the first part of the business plan but is the
last to be written. It gives the reader a quick glance of what your business
proposal is about and what you are asking for. This part is critical as
most readers will scan this section before deciding whether to read further.
The executive summary should typically be about one-half of a page in
length and include what you would cover in an elevator pitch such as:
or service proposition
This section should emphasize any unique features or benefits that what
is currently in the industry or area, aka why would someone buy your product
over the competition.
of your market
The Management team
When the anticipated
start date is
Your equity position
How much and what
are you asking for
Concise is the key
in the executive summary. You will go into more detail later in the business
The purpose of the business description is to objectively describe and
justify what the business concept is and will often include:
What the business
Description of services
Status of the business
(start-up, expansion or purchasing)
Current and future
Any facts or figures
should be noted and sources included in the business plan. This information
is important should you need to defend your data and assumptions. The
business description is where you are trying to paint a picture of the
potential of your business along with the facts of why you believe you
Try to inject energy
and excitement to get the reader enthusiastic about why your dog grooming
is going to be great, without going overboard of course.
After describing what
your business does, it is time to describe the products and services your
business is selling. Keep in mind that it is important to show how your
dog grooming and related products and services are better than the competition
(which you will illustrate in detail later). If you don't have a good
answer than you should rethink your strategy. What is it about your dog grooming
business that is going to get the customer to change doing business with
the competition? Will you serve a premium product, offer a better atmosphere
or better delivery?
A very important part of your business plan is the marketing section.
Regardless of the quality of your dog grooming , your business will be lost in
the clutter of advertising. If you don't know your customers, how will
they ever find you? All of this begins with doing some research.
Is Your Market
The first step is to determine who you are going to sell to by identifying
common characteristics of your market such as age, income, race, religion,
education, interests and/or geographic locations. While almost everyone
drinks dog grooming how are you going to effectively advertise to everyone and
still make a profit? What you need to do instead is determine the group
or groups of people who are most likely to come to your dog grooming and
market to them by catering to their needs. After all you are trying to
generate a positive return on your marketing dollars, so use them wisely.
In today's ultracompetitive marketplace, there is going to be competition,
no matter how creative your business concept is. Attempting to run a portion
of your business better than the competition may be a difficult challenge
so it is often better to focus on planning on being different and competing
with them less directly. Can you position your services differently? Can
you serve a particular market niche that isn't being looked at? Can you
add more value than the competition? Even if you are lucky enough to not
have direct competition in your area meaning someone with a dog grooming ,
you will have indirect competition from grocery stores, convenient stores,
fast food dog grooming , etc. If you indicate in your plan there is no competition
it will be viewed that there is either no market for your product or you
have not done your research.
Optimally you will
want information on at least three but no more than five competitors.
List information about who they are, how long they have been in business,
location, services offered, perception on pricing, quality, etc. and compare
your advantages and disadvantages. If the information you are looking
for is not available online, you may need to pretend you are a customer
to get some of this information.
With the above steps researched, the promotional strategy follows. The
promotional strategy is where most entrepreneurs fail as they use the
blanket statement that they are going to advertise in the newspaper, radio
and/or television without thinking through the process or the customer.
The promotional strategy provides you a map of how you are going to reach
your market in the most efficient manner possible. Advertising is expensive
and sometimes difficult to tell if it is bringing people to the door so
use it wisely.
Sales ProjectionsIndustry journals
One of the more difficult areas of the business plan is coming up with
sales projections. This number is probably going to be wrong and that's
ok. What you want is a figure backed up with justifiable data. Just grabbing
a number out of the air saying you will make $300,000 won't work. There
are many sources to help come up with this number including:
Make sure you can
make a profit at whatever price you are selling at.
The effects of pricing play a large role on how your product is perceived
in the marketplace. Price too low compared to the competition and your
product could be perceived as cheap and unreliable. Price too high with
the features and benefits of your service and few customers come through
the door. While this is a complex issue, here are a few things to keep
If you want to have
lower costs and "get your foot in the door it may be better to offer
discounts or coupons initially until your business is better known.
Don't be afraid to
charge more for your dog grooming than the competition if you have something
more or better to offer.
Pricing is the easiest
of the marketing mix to change. You may find that a large competitor will
under price you to ensure you can't make a profit and go out of business.
In this section you would describe who is going to manage the business
on a daily basis as well as provide strategic direction (if these positions
are separate). Each of these people need to have a brief biography included
as well as a resume in the appendix.
Try to show how the
experience and education of these people will be able to successfully
execute the strategy in the business plan and succeed. Many times the
owner may not have the specific experience for this business, so it is
very important to pull their other professional experience in and explain
how it will make for a successful operation.
Next, a brief explanation
of the employees is in order including:What positions need
to be filled
When they need to
be filled (This is important in developing financial projections as you
may have some employees come on after you start)
How much they get
paid (Be sure to calculate payroll taxes as well, estimate 15% if not
Financial projections are placed at the end of your business plan, before
the appendix but it a very critical piece to the plan. The three must-have
financial statements are a cash flow statement, a profit and loss statement
and a balance sheet. The information already provided in the narrative
portion of the business plan must match the financial projections.
Most financial projections
are three years in length. It is a good idea to include a Notes &
Assumptions to Financial Projections page to both help make sure all of
your numbers come through and provide an itemized list to provide clarity
for the reader.
Notes & Assumptions
to Financial Projections
o Break out each loan (building, equipment, inventory)
o Interest rate
oAny monthly costs not discussed in business plan narrative
o Cost of goods/inventory
o Employee wages
o License & fees
o Professional fees
o Rent/property taxes
o Repairs & maintenance
o Vehicle expense
oAnything else that needs to be explained in the financials that is not
in the narrative
Startup Expenses - These are all expenses you will incur prior to opening
your dog grooming . It is recommended to have quotes available or in the
appendix for the larger items (above $500). It is also recommended that
you have a miscellaneous line (at least 10% of the total project) available
as there are always unexpected expenses that were not accounted for.
Sources and Uses
of Funds - This section details how the loan money will be used (inventory,
equipment, machines, repairs and improvements, working capital, etc) and
who is providing it (bank, investor or owner). You will likely need to
be injecting 20% of your own money and maybe more depending on the risk
assessment of the business and your personal finances.
- The cash-flow statement is one of the most important pieces of your
business plan. It shows a schedule of the money coming into the business
and expenses that need to be paid and whether you have enough cash to
sustain the business based on your assumptions. Every part of your business
plan is important, but none of it means a thing if you run out of cash.
Should this number be negative, you either need to raise sales, reduce
expenses or have more starting cash. Your cash flow statement will typically
be three years in length with the first year analyzing the monthly figures
and later years by quarter. Don't be intimidated with the cash flow statement
as it is merely a future look into your checking account.
Profit & Loss
- This statement, while similar to the cash flow statement but illustrated
annually and adds the effects of non-cash charges such as depreciation
and amortization to get an accounting overview of the operations of your
- The balance sheet is a summary of the value of all assets, liabilities
and equity for an organization at the end of each year. A balance sheet
is often described as a "snapshot" of a company's financial
condition and will show the value of the business over time.
Statement - If you are looking at bank financing, every person who
will have a 20% or more ownership position will need to provide a personal
financial statement to show how effective they are at managing your money.
This statement will show your assets (checking & savings accounts,
cd's ira, 401K, valuables, home, vehicle, etc) as well as assets (mortgages,
credit card bills, installment accounts, etc).
AppendicesQuotes for items
Appendix items are various pieces of information that help make your case.
Include details and studies used in your business plan; for example:
Resumes of the management
Leases and contracts
Letters of support
There is a lot to
creating your dog grooming business plan but will definitely make
your business stronger. While it may seem easier to have someone else
write your plan, there is no substitute to writing it yourself. This is
your business and by writing it yourself you will have a better understanding
of your business and strategies for success.
About the author:
Spencer Gregory is a consultant advising business owners on business planning
and financing in the dog grooming industry.
For assistance with
developing business plans and business plan reviews visit www.TheBusinessPlanFactory.com.
- Dog Grooming Business Plan