How to Write a Dog Daycare Business Plan

Whether you’re looking to raise funding from private investors or to get a loan from a bank (like a SBA loan) for your dog daycare, you will need to prepare a solid business plan.

In this article we go through, step-by-step, all the different sections you need in the business plan of your dog daycare. Use this template to create a complete, clear and solid business plan that impress banks, investors and get you funded.

For more information about how to start a dog daycare, make sure to read our guide below:
How to Start a Dog Daycare in 10 Steps: Complete Guide

1. Executive Summary

The executive summary of a business plan gives a sneak peek of the information about your business plan to lenders and/or investors.

If the information you provide here is not concise, informative, and scannable, potential lenders and investors will lose interest.

Though the executive summary is the first and the most important section, it should normally be the last section you write because it will have the summary of different sections included in the entire plan.

Why do you need a business plan for a dog daycare?

The purpose of a business plan is to secure funding through one of the following channels:

• Obtain bank financing or secure a loan from other lenders (such as a SBA loan)
• Obtain private investments from investment funds, angel investors, etc.
• Obtain a public or a private grant

How to write an executive summary for a dog daycare?

Provide a precise and high-level summary of every section that you have included in the business plan of your dog daycare business. The information and the data you include in this segment should grab the attention of potential investors and lenders immediately.

Also make sure that the executive summary doesn’t exceed 2 pages in total: it’s supposed to be a summary for investors and lenders who don’t have time to scroll through 40-50 pages, so keep it short and brief.

The executive summary usually consists of 5 major sub-sections:

• Business overview: here you must go in detail about what is your business model: short-term vs. long-term daycare, whether you offer additional services (grooming, veterinary, etc.) and whether it’s a franchise or an independent business. Also explain where the daycare will be located, your pricing strategy and what sets you apart from other businesses.
• Market analysis: summarise the market where you will operate and provide a brief about your target market, target audience, spending capability, etc. Also give certain data points about the dog daycare industry in the area where you want to operate (size and growth), as well as an overview of the main competitors, etc.
• People: introduce the management team and employee structure
• Financial plan: how much profit and revenue do you expect in the next 5 years? When will you reach the break-even point and start making profits? You can include here a chart with your key financials (revenue, gross profit, net profit)
• Funding ask: what loan/investment/grant are you seeking? How much do you need? How long will this last?

2. Dog Daycare Business Overview

Here, you shed more light on your dog day care concept while answering questions potential funders will likely ask. For instance:

• Why did you decide to open a dog daycare today?
• Where is your daycare located, and why did you choose that location?
• How many square feet is your dog day care? What are the amenities you plan to offer?
• Is this a franchise or an independent business?
• How many employees will you hire to run your day care?
• Will you provide any additional services (grooming, veterinary, etc.)?
• What legal structure will you adopt for your business?

a) History of the Project

Any business overview must start with explaining the history of the project. There are 2 components here:

• Passion & experience of the business owner
• Rationale behind opening a dog daycare today

Passion & experience

You may or may not have prior experience. If you have experience, speak about it and how it will help you to run your business. For instance, you may have worked as a manager in one of the leading dog daycare franchises in the country and want to start your own.

Rationale

Is there a certain problem (or perhaps, a set of problems) that your dog daycare will solve? For example, the neighborhood where you want to operate may have many dog owners working downtown that need dog sitting services for their pets during the week.

b) Business model

This section of Business Overview should explain the model you want to adopt for your dog daycare. Here are a few questions you must answer:

• Is this an independent business or a franchise?
• Where will your dog daycare facility be located? 
• What will be the opening hours / days of your business?
• What services will you offer (dog training, grooming, pick-up-and-drop-off, etc.)

c) Pricing strategy

After explaining what type of services you plan to offer, you should lay out here your pricing strategy. Dog daycare businesses typically have different rates: hourly, daily, weekly or even monthly rates.

In addition to the prices, make sure to explain what are the services included for each. For example, you can have standard day care price packages while some customers may want to pay extra for additional services (e.g. pick up and drop off).

e) Company Legal Structure

Finally, your business overview section should specify what type of business structure you want:

• Is this a corporation or a partnership (LLC)?
• Who are the investors? How much equity percentage do they own?
• Is there a Board of Directors? If so, whom? Do they have any experience in the industry?

3. Market Overview

A complete understanding of the market where you want to operate is important for the success of your business. That’s also something you must showcase in your business plan.

You must cover here 3 important areas:

• Industry Size & Growth: how big is the dog daycare industry in your area? What is its growth rate (or decline rate) and what are the factors contributing to its growth or decline?
• Competition Overview: how many competitors are there? How do they compare vs. your business? How can you differentiate yourself from them?
• Customer Analysis: who is your target audience? What kind of daycare services do they need?

a) Dog Daycare Industry Size & Growth

How big is the dog daycare industry in the US?

The US pet daycare industry represents $4.5 billion and over 16,000 firms across the country: that’s an average annual turnover of $280,000 per dog daycare.

The pet daycare industry itself is expected to double by 2030 with a 10% CAGR from 2022-30..!

How big is the dog daycare industry in the US?

After getting a clear picture of the dog daycare industry in the US, narrow down to your location. It’s very likely that you won’t find the number anywhere (at least not for free). In that case, you can use our guide to estimate the TAM, SAM, and SOM for your business.

Here is an example of how to do it:

We already know the average annual turnover per daycare is $280,000. Therefore, if the city where you will operate has a total of 10 dog daycare businesses, the industry is worth about $2.8 million in your area.

b) Dog Daycare Competition Overview

Studying your competitors’ business models is vital. You need to understand what makes them successful or why they fail. Look into what is their business model, the services they offer, their marketing strategies, etc.

We strongly recommend to do some research and create a comparative table like the example below:

	Competitor #1	Competitor #2	Competitor #3
Location	xx	xx	xx
Business model	Franchise	Franchise	Independent
Pricing (daily rate)	$25	$25	$28
Capacity	~50	~20	~40
Size	5,000 sq. ft.	2,000 sq. ft.	5,000 truck
Extra services	Grooming	None	Grooming
Staff	10	8	12

Dog Daycare SWOT analysis

SWOT stands for Strength, Weakness, Opportunities, and Threats. This analysis will help lenders and investors better understand how you compare vs. competitors as well as the overall risk and reward profile of your business.

Here is a sample that you can use as a reference:

• Strengths: 5 years of experience working in a dog day care, well-trained staff, spacious day care facility
• Weaknesses: no brand reputation, limited marketing budget
• Opportunities: day care situated in a neighbourhood with many dog owners
• Threats: popular dog day care franchises in the area

c) Customer Overview

Here, you need to show whoever looks through your business plan that you understand your target audience’s needs and preferences.

Some important points that you must include in your customer analysis include:

• Percentage of dog owners
• Number of dogs per 100 inhabitants
• Type of pet care services they need

4. Sales & Marketing Strategy

This is the section of your business plan where you outline your customer acquisition strategy. Try to answer the following questions:

• What is your Unique Selling Proposition (USP)?
• What are the different marketing strategies you will use?
• How do you intend to track the success of your marketing strategy?
• What is your CAC or customer acquisition cost?
• What is your marketing budget?
• What introductory promos and offers do you intend to provide for attracting new customers?

What marketing channels do dog day care shops use?

The standard marketing channels include:

• Pay-per-click campaigns (e.g. Google ads)
• Social media
• Referral programs
• Billboards & signage

What are your Unique Selling Points (USPs)?

Your dog day care will just be one among many if you don’t distinguish yourself. Your USPs won’t be difficult to get once you’ve analyzed your target audience, competition, and business model.

For example, one of your USPs can be to pick up dogs from their owners’ homes and drop them off once your day care closes or offer lodging services for dogs whose owners travel regularly.

5. Management & People

You must address 2 things here:

• The management team and their experience/track record
• The organizational structure: different team members and who reports to whom?

Management

Small businesses often fail because of managerial weaknesses. Thus, having a strong management team is vital. Highlight the experience and education of senior managers that you intend to hire to oversee your dog daycare business.

Describe their duties, responsibilities, and roles. Also, highlight their previous experience and explain how they succeeded in their previous roles.

Organization Structure

Even if you haven’t already hired a manager and daycare personnel, you must provide here a chart of the organizational structure defining the hierarchy and reporting lines of your business.

Of course, the number of employees and their roles will vary depending on the capacity of your dog daycare (the number of dogs you can take care of). It will also depend on the services you offer (grooming, veterinary clinic, etc.).

6. Financial Plan

The financial plan is perhaps, with the executive summary, the most important section of any business plan for a dog daycare.

Indeed, a solid financial plan tells lenders that your business is viable and can repay the loan you need from them. If you’re looking to raise equity from private investors, a solid financial plan will prove them your dog daycare is an attractive investment.

There should be 2 sections to your financial plan section:

• The startup costs of your project (if you plan to start a new dog daycare facility, add a new location to your chain, etc.)
• The 5-year financial projections of your business

a) Startup Costs

Before we expand on 5-year financial projections in the following section, it’s always best practice to start with listing the startup costs of your project. For a dog daycare, startup costs are all the expenses you incur before you start making sales. These expenses typically are:

• The acquisition of the real estate (if you buy)
• The lease deposit (if you rent)
• The renovation and equipment costs
• The equipment
• License & permits, business insurance, etc.

b) Financial Projections

In addition to startup costs, you will also need to build a solid 5-year financial model that you will include in your dog daycare business plan.

Note that your financial projections should be built using a spreadsheet (e.g. Excel or Google Sheets) and presented in the form of tables and charts in your business plan.

As usual, keep it concise here and save details (for example detailed financial statements, financial metrics, key assumptions used for the projections) for the appendix instead.

Your financial projections should answer at least the following questions:

• How much revenue do you expect to generate over the next 5 years?
• When do you expect to break even?
• How much cash will you burn until you get there?
• What’s the impact of a change in pricing (say 10%) on your margins?
• What is your average customer acquisition cost?

You should include here your 3 financial statements (income statement, balance sheet and cash flow statement). This means you must forecast:

• The number of dogs you will take care of (the customers) ;
• Your expected revenue ;
• Operating costs to run the business ;
• Capex (cost to renovate the facilities, furniture and equipment, etc.)

When projecting your financials, make sure to sensitize sales volume (customers), pricing as well as the expenses (inventory, salaries, etc.). Indeed, a small change in these assumptions may have a significant impact on your revenues, and most importantly, your profits.

7. Use of Funds

This is the last section of the business plan of your dog daycare. Now that we have explained what your business model is, what type of services you offer, how you get customers, etc., this section must now answer the following questions:

• How much funding do you need?
• What financial instrument(s) do you need: is this equity or debt, or even a free-money public grant?
• How long will this funding last?
• Where else does the money come from? If you apply for a SBA loan for example, where does the other part of the investment come from (your own capital, private investors?)

If you raise debt:

• What percentage of the total funding the loan represents?
• What is the corresponding Debt Service Coverage Ratio?

If you raise equity

• What percentage ownership are you selling as part of this funding round?
• What is the corresponding valuation of your business?

Use of Funds

Any business plan for a dog daycare should include a clear use of funds section. This is where you explain how the money will be spent.

Will you spend most of the loan / investment in paying your employees’ salaries and the COGS (inventory)? Or will it cover mostly the cost for acquiring the real estate and renovations?

For the use of funds, we also recommend using a pie chart like the one we have in our financial model template where we outline the main expenses categories as shown below.