You definitely deserve a raise in pay if you are the typical pet business owner that participated in our financial survey.
This week we received the detailed final report of 2015 financial results that Crystal Canine and the International Boarding and Pet Services Association (IBPSA) survey annually.
Every year I look forward to this peek inside our industry and spotting trends on where the industry is headed. The bottom line in reviewing this report is that many pet care business owners need to increase their pay to avoid burn out.
We need high quality pet care centers in our communities and to avoid burn out you need to make a salary that keeps you persevering through the tough times. Based on my assessment of the summary report, following are five action items that can increase your salary.
- Set a goal to increase your profit percentage – The median range of profits of our survey participants was 11%-15%. Concerning is that 11% of respondents reported a net loss and 48% of all respondents earned 10% or less in profits. Set annual goals to increase your profits to at least 15%. Making money and providing high quality care are not mutually exclusive goals.
- Analyze the discounts you offer – The average discount offered is 18% with highest being multiple pet boarding. The industry average discount percentage is higher than profits earned, so this is an easy opportunity to increase revenue and your own pay. Discounts should be a win for your business and your clients so consider shifting them to reward behaviors that benefit your business like boarding during off-peak periods.
- Raise rates if your business is over 10 years old – The survey pointed out a pattern of older businesses pricing lower than average in their market. Annually complete a pricing analysis and raise some rates in your business to ensure you are covering your costs and making a profit. Price for the quality of care you provide not the appearance of your facility.
- Dog Daycare is a commodity so alter your model – The Dog Gurus have been warning of this shift and the survey proves their point. A third of daycare providers have capacity for over 50 dogs per day and the median rate charged is $25. This struck me since that is the rate Urban Tails charged when we opened in 2000. Evidence that customers are price shopping for daycare services, so what should you do? Check out daycare 2.0 recommended by The Dog Gurus as a way to change your model so dogs have more fun, staff enjoy their jobs and you make more money (TheDogGurus.com).
- Increase your pay – The median pay of business owners was $57,000 in 2015, down significantly from 2014. Only 25% of owners paid themselves $80,000 or more last year. Business owners frequently pay themselves last with what is leftover. A better strategy is to pay yourself first and then adjust your business model to operate with the money that is left for all other expenses.
What is the key to giving yourself a raise?
You need to know and understand exactly how your business makes money and where you spend it.
We’re here to help you do that and this month you can save money on three new tools in our store.
- Get your copy of the full 2015 Pet Care Services Financial Survey Results Report and spend time comparing your results to industry averages looking for opportunities to improve your bottom line
- Know Your Numbers is a very affordable workbook that calculates your discount percentage, break even and profits by service in easy to use excel templates
- Key Performance Indicators are a great starting point in getting to know how your business makes money and Al Bowman just completed part 2 of the Pet Business Key Performance Indicators Workbook series
Once again, Susan, you are spot on! The annual survey always gives me time to pause and go over our “numbers” and see where we can improve from yet another perspective. Thank you for taking this on and serving our industry!
It is my pleasure and happy to hear from others that look forward to the results every year. It’s great confirmation when successful business owners like you continue to benefit from the survey results.