BUSINESS PLAN ON

PAWS PET SHOP

BUSINESS PLAN ASSOCIATES

ASHWINI KUMARI DAYANAND

RANJITH SHETTY MANOJ SHETTY

SHARATH KUMAR VARSHA MALLI

UNDER THE GUIDANCE OF

MR. RUCHIRANAND

PROFESSOR

Submitted to the department of MBA, AIET, Mijar.

2010

ACKNOWLEDGEMENT

A successful and satisfactory implementation of any significant task is the outcome of invaluable contribution of different people. It gives us immense pleasure to acknowledge the assistance and help we received in developing this business plan and report the same.

On the onset, we would like to thank our guide, Ruchiranand, professor, department of MBA for his encouragement, motivation and expert advice given throughout the course period. We won’t be having enough words to prove the unconditional help that was showered on us by him.

We humbly thank K.U.Nayak, professor and dean, department of MBA for his constant involvement and moral support during the course of business plan.

It is through our heartfelt gratitude to thank Dr. Updhya, veterinary doctor, for his unconditional help.

We are very thankful to Waterz, Pets-N-Ponds and Pet Hut for their co-operation and support in our business plan.

TABLE OF CONTENTS

INTRODUCTION

There has never been a better time to start a pet care business. These days, people with pets tend to look at their beloved animals as members of the family-a big difference from the old days when dogs and cats were usually only kept around if they were useful. Pet businesses are a great way to be your own boss, spend your time with the animals you love, and make some money along the way.

More and more people each year are leaving their jobs in the corporate or professional worlds and choosing to open their own businesses. There's nothing like working for yourself: Being your own boss comes with tremendous benefits and rewards, as well as increased responsibility. One of the most popular fields in which to open up a new business is the ever-diversifying pet care trade.

The first requirement is a love for animals. People want to know that their animal is in good hands while they're at work or away, and having an obvious love for animals is the best way to make sure everything runs smoothly. A love for animals isn't enough, however. You'll also need to have a good business sense and entrepreneurial spirit to get your pet sitting business running smoothly. Pet care operations run the gamut in size from small businesses with two employees that handle a few dogs a day, to large operations with five to six employees that handle as many as 20 to 40 dogs a day.

BACKGROUND

We're living in an age where people treat their pets with more love and care than ever before. Pet care businesses are by far one of the rapid growth areas in the pet care industry. The reasons for this are many, but most important being the changing clientele. More and more families and single people who are living without children in the house turn to a dog to be their special loved one. And they want to treat this four-legged member of the family as well as possible.

This is where we come in. Opening a pet shop in the neighborhood gives the dog owners a safe, fun place to leave their dogs when they are away. Doggie day cares and kennels can be more lucrative. Pet grooming has long been a way for pet owners to lavish love, affection and money on their beloved pets. Pet clinics help to provide high standards of healthcare for the pets.

The main reason behind starting this business is that it is a profitable business and most importantly because of our passion for animals. We feel the need for animals to be treated with lot of love, care and affection. We are very happy to help pet owners to do the same.

ABOUT OUR COMPANY

Legal name: Paws Pet Shop

Names of top management: Ashwini Kumari, Dayanand, Ranjith Shetty, Manoj Shetty, Sharath Kumar, Varsha Malli.

Location of business: Nanthoor

Mission

Our Mission is to provide the education and loving support to our customers so that they will have the knowledge to care for and enjoy their pets.

Vision

To provide holistic care for pets.

We love animals ...

At paws Pet Shop, we offer our customers a store that is well stocked with healthy and happy animals - plus everything you'll need to keep them that way.

We specialize in hand feeding a wide variety of birds. This includes parrots, love birds, doves, Finches and several others. We take pride in raising well-adjusted, socialized birds that will make a welcome addition to any family.  For the birds well being and safety we gladly offer nail and wing clipping as needed, as well as tips and advice from the bird experts on our staff. We also have varieties of fish, rabbits and turtles to choose from. People interested in buying a dog or a puppy could place their orders with us and we could deliver their pets in no time.

We provide an extensive assortment of organic, natural and holistic foods for birds, dogs, and cats. You will find in our store a vast array of cages, bedding, toys, leashes, collars, grooming supplies, and many other accessories. As an additional service, we added our boarding facility to accommodate our customers while away.

Most importantly, here at paws Pet Shop, we offer you personalized service provided by our highly knowledgeable staff members who are always ready to answer your questions and assist you in any way.

At paws Pet Shop, our job is to help you, our customer, keep your pets happy and healthy. We know how much you love your pets because we love our too. Our staff is committed to continually learning more about pet care, products and nutrition. We promise we will always do our best for you and the animals you love.

Services offered at paws:

Doggie Day Care and boarding facilitiesWhen most people think about temporary homes for dogs, they think of shelters and kennels--neither of which sounds very nice. This Doggie day care, on the other hand, takes care of dogs when their owners are not around. Doggie day care is a day facility. It’s basically just babysitting the dogs while the owners are at work. It is very Much like a day care center that parents take their kids to. Doggie day care facilities enable pet owners to leave their dog in good hands while they're at work.

Service includes: providing separate kennels, meals- twice a day, walking the dog, etc

Pet Grooming: Pet grooming has long been a way for pet owners to lavish love, affection and money on their beloved pets. We provide Traditional storefront grooming operation. This helps us handle more dogs each day. We have well trained employees who possess the required skills. As the pet grooming changes each year we quickly adapt to the new grooming products and technologies that hit the market.

Grooming services (pet parlor):

1. Pet hygiene: nail, ear, stomach, pad and rectum.2. D-mating: untangling of knotted hair.3. Show grooming: bath and pet hygiene and intensive hair styling.4. Coloring/streaking: only natural food colors.5. Massage: aroma therapy, herbal ayurvedic massage.6. Body clip: complete body haircut.

Pet clinic:

All of us at paws have lived our lives with pets. We know that each is an individual with his or her own personality and a member of the family. We want the best standards of health care for our own pets and we aim to provide that same standard for our patients. We offer the quality care, which the pets deserve, in all aspects of Veterinary Medicine, with particular emphasis on prevention of disease.

Our highly qualified staff provide ( 24 hours, a day / 7 days, a week) a unique & competent diagnostic support and assistance for your animals whilst our modern computer facilities keeping track of the pet's medical history. Our pet clinic is managed by Qualified and Experience Veterinary Professional.

clinical services:

1. Treatment: rashes, skin disease, ticks, etc2. Vaccination: anti rabies, distemper vaccines, etc.3. Routine check-ups: liver function, ear infection, limbs etc4. Superficial wounds: bites, tearing of skin, etc5. General ailments: food poisoning, indigestion, lose motion, etc

pet store:

We have a fully stocked pet store at paws. It includes veterinary drugs, pet foods, pet needs, a to z requirements of pets, shampoo etc. We also sell Dog Accessories Like (Pets Cloths, Pet Toys, Pets collars, Pets Treats, pets Harness or more).

Products available at the pet store:

Medicines include:

1. Wokazole- body lotion2. Srectrazole- cream for rashes3. Freesia powder- for rashes4. Vitamin supplements and calcium5. B-complex6. Seledfuff- shampoo

Other products include:

1. Leash2. Food bowls3. Toys4. Accessories

5. Couch6. Pedigree7. cookies

Pet shop:

At paws pet shop you will find...

Friendly, knowledgeable staff A clean, bright well-stocked store Lots of great varieties for birds, cats, and more Wide selection of healthy birds and rabbits Aquariums of various sizes. Competitive prices A convenient location and working hours.

Varieties of birds: love birds, doves, parrots etc.

Variety of dogs include: Labrador, pugs, terriers, german shephards, etc.

Variety of fish: guppy, gold fish, molly, sword tail, angel fish, etc.

Market analysis

Target market

Here our target market will be higher income people and also upper middle class. Higher income people will have affordability for their pets and also they can buy pets with higher price. We have chosen the location for our pet shop as Nanthoor, Mangalore. The location is convenient and is well connected.

Customers buy pets depending on their lifestyle and psychographics. For example a person with high income, with luxurious lifestyle would want to own a premium breed of pet.likewise different people have different mindsets. Some people would like to have pets to share their feelings and to get relieved from their stress. Some others may want to have pets like dogs to guard their homes.

Purchasing pattern of customers differ from one another. Different people may want to have different breeds of dogs which best suit their requirements. Some would like to have other pets like Cats, Rabbits, birds etc.

Consumers are very sensitive about buying products. The same reflects in buying pets as well. So while buying a pet, they consider each and every point or aspect. They also make a study on the other breeds available. Finally they take a decision on the kind of pet they would want to own.

Size of the market will help us analyze the market potential. Here the size of our market is small, as we are concentrating mostly on the upper middle and higher income residents of Mangalore. Extensive promotional activities will help us reach our target market. Youngsters can be targeted through advertisements on social networking sites. We also target our potential customers through our blogs. Trends of the market help us formulate our future strategy. It gives us the different requirements of the customers and their demands.

The Competition

To compete with others in the first place we need to know where we stand. It is required for us to have sufficient amount of funds which we do. Based on our requirement we have good amount of workforce as well. We have worked out our strategies and know clearly where we fit in the market.

We take into account the number of pets sold at our pet shop and also the different services offered which are new and available only at paws giving us an edge over our competitors. Our information on pets is genuine and reliable. We believe in maintain high standards of quality in our services. Our main profits are from the excellent services that we provide.

Barriers to entry in this case can be to get license from government, the cost of operation and cost of land. But since we already have our ancestral property which we are taking on lease for a minimal rent our investment on land is taken care of.

We have also considered our future demands and are working towards meeting them. Since this business is considered to profitable and promises a fairly good return on investment, we can expect new entrants who could be our competitors in the future. But at that point in time we will have the benefits of already existing in the business and would have developed a good clientele base. If we are well established by then which we are very confident of, we can enjoy the first mover advantage.

Strategic position

Our Company’s strengths are efficient and skilled workforce, sufficient amounts of networking capital which can be well utilized, good return on investment, new and better services, and good strategies to run the business.

We look forward to expand our business by providing different kinds of services to pets apart from the ones already existing, also ensure Supply of different kinds of food products for pets under our belt. We Also wish to look for other locations where there is good

demand for pet services and where competitors are nonexistent.

We constantly monitor our business growth in terms of the increasing clientele and the revenues we generate. We also make sure we are in line with the objectives, mission and vision of the company.

Market plan and sales strategy

Our company’s message matches with our overall business and is of such nature that it can position our services in the minds of the customer.

Finding clients can be the hardest part of starting up a pet care business, but with a little legwork we can establish a clientele rather easily.

We are not concentrating on conceptual marketing as it’s very expensive. We plan to start off with a big bang conducting dog shows and creating awareness among people. We also wish to meet with veterinary doctors and request them to convey to their clients about our services. This word of mouth will help us gain clients as most have faith in their doctor’s recommendations. We also encourage feedback from our customers so we are aware of our performance and also know what we need to improvise on.

our Marketing tactics include:

Press releases. Online press release. Social networking. Getting media coverage. Keeping in touch with our customers and potential customers. blogging to increase our client retention Getting into local pet community. Advertising at Local events, dog shows etc. Communicating and keeping our clients interested.

Placing fliers in local hot spots. Many stores and parks offer bulletin boards where we advertise our services.

Providing services in form of packages at a discounted rate. Encourage word-of-mouth advertising.

Social responsibility:

We seek the joy of donating a small portion of our profits every year to PREM CHAAYA, which believes in giving a new life to abandoned and rescued animals.

We also sponsor dog charity shows.

( In Rupees)

Revenue Items201

1201

2201

3201

4201

5201

6201

7201

8201

9 2020

Pet Sales

Dogs60,

2001,46,190

2,26,095

3,37,150

3,70,870

4,07,956

4,48,762

4,93,632

5,42,996

5,97,300

Cats  32,

0001,05,600

1,54,880

2,34,256

2,57,686

2,83,459

3,11,806

3,42,991

3,77,289

4,15,019

Total Pet (Dog+Cat) Sales (A)

92,200

2,51,790

3,80,975

5,71,406

6,28,556

6,91,415

7,60,568

8,36,623

9,20,285

10,12,319

Rabbits5,200

7,980

11,466

15,279

16,038

16,847

18,224

19,142

20,094

21,718

Fish35,

26037,4

6439,2

9841,7

4344,3

3046,5

0249,7

9452,8

2155,3

6658,78

0

Birds  31,

00049,8

7570,5

2893,7

981,00,928

1,06,546

1,12,560

1,20,384

1,27,108

1,35,024

Total other Pet Sales (B)

71,460

95,319

1,21,292

1,50,820

1,61,296

1,69,895

1,80,578

1,92,347

2,02,568

2,15,522

                       

Total Pet Sales (A) + (B)

1,63,660

3,47,109

5,02,267

7,22,226

7,89,852

8,61,310

9,41,146

10,28,97

0

11,22,85

312,27

,841

Product Sales (Pet Store)

Fish Food Sales25,

79527,1

1128,5

5729,9

6931,8

0634,2

4636,0

7537,9

0239,9

4142,18

6

Aquarium Sales46,

00048,3

0055,1

2557,8

8365,6

4368,9

2572,3

6990,0

5894,5

6099,29

2

Medicines sales81,

2101,29,524

1,83,195

2,42,858

2,58,293

2,74,324

2,90,660

3,07,561

3,27,316

3,47,876

Other products Sales  

2,19,230

3,66,932

5,44,475

7,55,686

8,40,375

9,35,290

10,37,72

3

11,54,74

8

12,83,16

514,26

,907

Total Pet Store Sales

3,72,235

5,71,867

8,11,352

10,86,39

6

11,96,11

7

13,12,78

5

14,36,82

7

15,90,26

9

17,44,98

219,16

,261

Services

Pet Clinic Revenues

1,32,150

1,98,475

2,68,125

3,56,613

3,59,766

3,62,525

3,86,402

3,89,714

3,92,888

3,98,956

Pet Parlour Services78,

7751,20,400

1,62,400

2,14,611

2,17,106

2,19,916

2,33,419

2,35,433

2,38,054

2,40,454

Boarding Servces   15, 22,8 31,2 39,0 39,6 40,2 40,2 40,8 41,4 42,00

000 00 00 00 00 00 00 00 00 0

Total services revenue

2,25,925

3,41,675

4,61,725

6,10,224

6,16,472

6,22,641

6,60,021

6,65,947

6,72,342

6,81,410

Total Revenue  

7,61,820

12,60,65

1

17,75,34

4

24,18,84

6

26,02,44

1

27,96,73

6

30,37,99

4

32,85,18

6

35,40,17

7

38,25,51

2

Expenditure Items

Cost of Pets Sold

1,06,060

2,31,644

3,36,931

4,87,227

5,33,632

5,83,327

6,38,761

6,99,245

7,64,785

8,37,713

Cost of Aquariums Sold

37,500

39,375

44,653

46,885

52,878

55,521

58,293

73,170

76,828

80,672

Cost of Fish Food Sales

23,905

23,905

23,995

23,995

24,245

24,870

24,960

24,960

25,050

25,210

Cost of Medicines Sold

78,077

1,24,451

1,76,351

2,33,723

2,47,408

2,62,821

2,79,380

2,96,496

3,13,556

3,33,440

Cost of other products sold  

2,19,230

3,66,932

5,44,475

7,55,686

8,40,375

9,35,290

10,37,72

3

11,54,74

8

12,83,16

514,26

,907

Total Cost of Goods Sold

4,64,772

7,86,307

11,26,40

5

15,47,51

6

16,98,53

8

18,61,82

9

20,39,11

7

22,48,61

9

24,63,38

427,03

,942

Wages and Salaries

3,00,000

3,21,000

3,43,470

3,67,513

3,93,238

4,20,765

4,50,218

4,81,733

5,15,455

5,51,537

Annual Lease Rental

25,000

25,000

25,000

25,000

25,000

25,000

25,000

25,000

25,000

25,000

Overheads60,

00060,0

0060,0

0063,0

0063,0

0063,0

0066,1

5066,8

1267,5

0768,23

6

Selling Expenses  77,

91768,8

7886,7

5979,9

4770,3

1659,3

5848,0

3550,8

4853,8

5657,27

8

EBITDA

-1,65,869 -534

1,33,710

3,35,870

3,52,349

3,66,784

4,09,474

4,12,174

4,14,975

4,19,519

Interest on term loans

60,000

60,000

60,000

52,500

45,000

37,500

30,000

22,500

15,000 7,500

Amortization2,500

2,500

2,500

2,500

2,500

2,500

2,500

2,500

2,500 2,500

Depreciation111000

68850

49073

38607

32181

27647

24109

21179

18676

16502

PBT

-3,39,369

-1,31,884

22,137

2,42,263

2,72,668

2,99,137

3,52,865

3,65,995

3,78,800

3,93,017

Tax (@ 30%)

30% 0 0

6641

72679

81800

89741

105859

109799

113640

117905

Education Cess (@ 2% of Tax liability)

2% 0 0 133

1454

1636

1795

2117

2196

2273 2358

Total tax Liability 0 0677

4741

33834

36915

36107976

111995

115913

120263

PAT

-3,39,369

-1,31,884

15,363

1,68,130

1,89,232

2,07,601

2,44,889

2,54,000

2,62,887

2,72,754

Cash Profit

-2,25,869

-60,5

3466,9

362,09,237

2,23,913

2,37,748

2,71,498

2,77,679

2,84,062

2,91,756

s 

Sources of FundsConstruction Period Year 1 Year 2 Year 3 Year 4 Year 5

Owner's Capital 4,50,000Term Loan From bank 4,00,000

Profit before Tax with Interest Added Back-

2,79,369 -71,884 82,137 2,94,763 3,17,668Depreciation 111000 68850 49073 38607 32181Amortization Expenses   2,500 2,500 2,500 2,500 2,500

Total A 8,50,000-

1,65,869 -534 1,33,710 3,35,870 3,52,349

Disposition of FundsCapital Expenditure for the Project 5,65,000Decrease in long term loan 50000 50000 50000Interest on Long term Loans 60000 60000 60000 52500 45000Taxation   0 0 6774 74133 83436

Total (B) 5,65,000 60,000 60,000 1,16,774 1,76,633 1,78,436Opening Balance of cash in hand and at bank 0 2,85,000 59,131 -1,403 15,532 1,74,769

Net Surplus/Deficit (A-B) 2,85,000-

2,25,869 -60,534 16,936 1,59,237 1,73,913Closing Balance of cash at hand and at bank 2,85,000 59,131 -1,403 15,532 1,74,769 3,48,682

Category % of Population

Number of Persons per households

Population Number of Households

SEC A 14.00% 4.51 84020 18630SEC B 15.00% 5.02 90021 17932SEC C 13.00% 4.77 78018 16356SEC D 12.00% 4.1 72017 17565SEC E 13.00% 4.04 78018 19311    Total 402094 89794

$3,60,349

Co C1 C2 C3 C4 C5 C6 C7

-5,65,000

-1,65,86

9 -534 1,33,710 3,35,8703,52,34

93,66,78

44,09,47

44,12,17

$1,32,091

($19,705)

IRR/Discount Rate NPV

10% $7,08,719.33 11% $6,26,488.28 12% $5,51,134.14 13% $4,82,027.32

24% 14% $4,18,601.94 15% $3,60,348.85 16% $3,06,809.34 17% $2,57,569.71 18% $2,12,256.43 19% $1,70,531.88 20% $1,32,090.54 21% $96,655.66 22% $63,976.30 23% $33,824.67 24% $5,993.79

24.23% ($0.00)25% ($19,704.57)26% ($43,441.79)27% ($65,374.02)27% ($65,584.72)27% ($66,005.62)27% ($66,110.74)27% ($66,131.76)27% ($66,121.25)27% ($66,123.36)27% ($66,125.46)27% ($66,127.56)27% ($66,129.66)27% ($66,131.76)27% ($66,133.87)

27% ($66,138.07)27% ($66,139.12)27% ($66,139.25)27% ($66,142.27)27% ($66,140.17)27% ($66,152.78)27% ($66,215.82)27% ($70,178.36)28% ($75,708.28)28% ($85,643.71)29% ($1,04,380.90)30% ($1,21,704.41)31% ($1,37,722.91)32% ($1,52,535.86)

5% 10% 15% 20% 25% 30% 35%

($200,000.00)

($100,000.00)

$0.00

$100,000.00

$200,000.00

$300,000.00

$400,000.00

$500,000.00

$600,000.00

$700,000.00

$800,000.00 $708,719.

33

$306,809.34

($0.00)

NPV Profile of the Pet Shop Project

NPV

Discount Rate

Ne

t p

res

en

t V

alu

e