Final Plan Submission

Scruffy’sJoe Strother Valari BeachCassie MillerJenny Combs

Rayan Alzamil

Business Administration 101Section 008

November 24, 2009

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Key Strategic Concept/ Overall Strategic Concept

As a multi-service doggie daycare located near Portland, Scruffy’s will deliver top-notch daycare, grooming, boarding, and special events to dog owners and their furry friends. Scruffy’s will cater to dog owning professionals with higher disposable incomes who want to provide top quality care for their canine companions in a playful and stimulating environment while they are away at work. Our employees will treat our customer’s dogs with the love & respect they would expect to receive at home. We will create an atmosphere that is at once homey and professional. We intend to market ourselves with a visually appealing logo and memorable name that communicates our values and speaks to who we are and what we do in an easily identifiable way.

At Scruffy’s, our main target market will be higher median income households within 5 miles of Scruffy’s. Our intention is to open our first location in an affluent suburb of Portland where there are fewer dog care centers relative to the number available in the Portland Metro area. We will establish ourselves in a high-traffic, high-visibility area conveniently located along well-traveled commutes. Combining timesaving convenience factors with high-end care in a warm and attentive atmosphere is our goal. Our competitive advantage will include the convenience of one-stop shopping and the high standard of quality found in our professional staff and exceptional product selection.

As a company, we believe that convenience is one of the top characteristics customers look for in a business, second only to quality. Scruffy’s is conveniently located within a short driving distance of densely populated areas of the Portland-metro region. Knowing that Americans spend $40 billion a year on their pets, we are sure that by having an edge over the competition, we will convince dog-owners to bring their dogs to Scruffy’s. By enticing dog-owners with our superior services, products, and activities, we will bring in and secure life-long customers.

Executive Summary

The owners of Scruffy’s believe doggie daycares to be an incredibly lucrative business venture, and are sure that they can provide a service that will satisfy the needs of pet owners. The guiding principle behind a successful dog day care is to provide a safe, attentive, stimulating environment with lots of interaction with other dogs and people. When given multiple options for care, we expect that pet owners will decide on a location that is also both convenient and charming. Scruffy’s possesses these characteristics by offering the following: experienced employees, a central location, and a place that feels like home for the dogs and their owners. Whether the owner is in need of a daycare because of work, school, or vacation, they are still in need. Scruffy’s exists to provide a solution to the issue of finding a reputable location as well as to meet the customer’s demand for convenience and top quality service.

Seeing as how there is a need for quality doggie daycares, we at Scruffy’s believe that this business venture is highly attractive to investors, and others who would benefit from the start-up of this business through the unique and innovative nature of Scruffy’s. The owners have realistic expectations of profit and debt that the business will incur in the first few years, but they also believe that such a lucrative venture will break-even fairly quickly.

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Both owners have a strong background running and managing a business and are extensively well qualified to care for dogs and operate a facility dedicated to that purpose. We have what it takes to make sure Scruffy’s is as profitable as possible. The owners would like to have a generous amount of involvement in the community to secure customers, create buzz about the establishment, and to gain a reputable name in the community as not only a fantastic doggie daycare location, but also as a company who cares about the community they serve.

Critical Events and Milestones Graphic (Attached as Appendix A)

Organizational Issues

The name Scruffy’s was chosen because it is a quintessential dog name. The name evokes a certain warmth and familiarity as well as suggesting a family style environment. These are the traits we want our customers to identify with Scruffy’s.

Organizational Form

Scruffy’s organizational form will be a two member Limited Liability Corporation (LLC). We choose to be an LLC because it will provide personal liability protection for member and owners of Scruffy’s. The LLC has more flexibility for the owners than a corporation. The owners wish to maintain control over the direction and decision making of the business. The LLC form will allow for more space in terms of managing the business. We as members/owners of Scruffy’s are protected from liability for acts and debts of the LLC so there are no personal liabilities incurred by the members. At the same time by choosing an LLC we will avoid the excessive paperwork and initial outlay of money associated with forming a corporation. Moreover, with an LLC we are looking after Scruffy’s current and future investors by avoiding double taxation. The LLC will allow for pass-through taxation, as the owners will be taxed only on the income reported on their 1040 personal tax forms. Eventually, after building a strong customer base at our first location and establishing name recognition, we intend to open multiple locations in the state, primarily in the Portland Metro and surrounding areas.

Benefits: Portland is an extremely dog-friendly city, with the highest amount of

dog parks per resident.

Portland is a rather work-oriented city; therefore many residents in the metro area and suburbs commute to work in the city. A doggie day care such as Scruffy’s will save people the hassle of finding a care center which is conveniently located, as well as a location they would feel comfortable taking their beloved dog to.

Scruffy’s will provide services which many care centers do not, including parties, socialevents as well as overnight boarding.

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The Pet Industry is an enormously successful market. American’s spend $40 billion a year on their pets.

Disadvantages:

Because Portland is such a dog-friendly city, many others have tapped into the Pet Services Industry and have successful businesses in the industry.

In order to accommodate dogs of all sizes and activity levels, Scruffy’s will need a large enough area for the dogs to run and play. Because of this need, rent will be higher.

Highly competitive market. With so many care centers around, we need to set ourselves apart.

As an LLC, our growth will be limited to the State of Oregon.

Mission Statement

“Scruffy’s will love and respect every dog as a member of our family. We will provide warmth and affection in a playful and stimulating environment.

We will provide the highest quality services and always strive for absolute customer satisfaction. Our company will demonstrate our

commitment to the happiness and well being of all dogs with wholehearted involvement in the charitable sector. Scruffy’s will

become the first name that comes to mind when you think “doggie daycare.”

Scruffy’s…where every dog has its day.

Objectives

Our primary objective at Scruffy’s is to create a truly enjoyable experience for Portland-area dog owners. This includes providing a safe and secure establishment, as well as top-quality services and products.

MANAGEMENT TEAM Our management team will consist of the owners/members of Scruffy’s, Joe Strother and Valari Beach, acting as Managers/Directors overseeing all operations of the business and managing the activities of the three additional employees. The experience of each member of the management team and employees is as follows:

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Joe Strother

Joe has a BA in Business Administration from PSU. Joe holds a CPDT-KA Certification from the Certification Council for Professional Dog

Trainers as well as certificates in three areas of Positive Reinforcement dog training. A life-long lover of dogs, Joe has spent five years volunteering with Oregon Humane

Society and nearly every major dog rescue and animal shelter in the Portland area. Joe was a manager and dog trainer for three years with “K-9 Companions,” a companion-

dog training facility providing service animals to people with disabilities. As manager with “K-9 Companions,” Joe established a chapter of “K-9 Companions” in

Eugene, OR and became Managing Director of the organization for one year. Under Joe’s direction, the company expanded to Bend and Ashland.

Valari Beach

Valari has a BS in Business Administration from PSU. Valari was co-owner of Vivace Creperie & Coffee House in NW Portland for 4 1/2 years.

Along with business partner, made all decisions regarding financial operations, procedures, policies and overall direction of business. The business was very successful and Valari sold her share of the business to her business partner in order to pursue her desire to own a business catering to dog owners.

Valari is also a pet-enthusiast and worked for 5 years as a Veterinary Technician in Los Angeles.

While working for The Culver City Vet Clinic in L.A., Valari also worked as an animal handler in the Film/Television Industry. Valari specifically assisted with dogs and wolf hybrids for prestigious animal trainers in Southern California.

EMPLOYEES

Cassie Miller

Holds a National Dog Groomer’s Association of America Certification in breed specific grooming techniques.

Cassie is a second generation Bichon Frise dog breeder/owner and has participated in national Shows for her family’s Bichon Frises.

Having grown up around dogs her whole life, Cassie has experience with many breeds and sizes of dogs.

Cassie also volunteered at Jewish Family Services in Seattle for a school year, Hopkins Elementary School in Sherwood, OR for 10 years, and Sherwood High School for 4 years. Through volunteering, Cassie has a lot of experience in working with the community.

As a sales associate at Sleighbells Christmas Shop and Gap, Cassie has experience in inventory, sales, and register.

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Rayan Alzamil

Rayan worked for Petco for 2 years and Broadway Pets for a year and a half. Rayan has volunteered for OHS for the last two years and has fostered 4 OHS Special

needs dogs for the last six months. Rayan has experience in Excel, dealing with financial situations for a local bookstore. Rayan also has experience as a cashier at a supermarket. Through this, Rayan has

experience in dealing with the community, as well as performing repetitive tasks. Rayan is also bilingual, speaking both English and Arabic.

Jenny Combs Jenny has been a professional dog-sitter and walker for the past 5 years. She has handled

many breeds and sizes of dogs. Jenny also is an employee at a high-end grocery store that carries gourmet dog products. Jenny worked for “3 Dog” Bakery for 2 years, a bakery specializing in dog treats.

Business Management Plan

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Unique Job Responsibilities: Training of all employees. Continuing education for employees and designing benchmarks for promotions. Scheduling of employees. Develop website and manage website content. Monitor emails from website

OWNER/MANAGER Joe Strother

Unique Job Responsibilities: All bookkeeping and accounting using QuickBooks Pro Ordering and inventory Accounts Payable and Receivable In charge of Promotional Strategy and Advertising Liaison with business community and non-profit organizations with expressed intent

to develop a strong community presence and participation with charitable functions.

OWNER/MANAGER Valari Beach

Shared Job Responsibilities: Manage employees on-site and handle all customer issues. Make all financial decision and monitor financial soundness of the business. Determine and implement all policies for employment, operations and customer

interactions. Hiring, firing, monitoring and counseling of employees. Make all purchasing decisions in line with business goals and expansion as customer

base grows. Design and institute marketing plan. Perform all duties of an employee as needed. One-on-one interaction with all customers through registration process and intake of

current customers. Manage front desk and take payments. Make all bank deposits and tills for register. Manage till and all till paperwork for sales and settle all credit card transactions for

the day.

OWNERS/MANAGERS Joe Strother and Valari Beach

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Job Responsibilities: Lead Groomer. Will perform all grooming responsibilities for business. Will manage grooming appointments. Will monitor and record inventory of supplies for grooming and U-wash. Will facilitate the U-wash service for customers and get client set up with all needed

supplies and be available for assistance. Will also act as Dog Attendant, supervising and interacting with dogs in the play and

boarding areas. When applicable, will institute groomer training for employees as demand rises for

the service.

EMPLOYEE – GROOMER & DOG ATTENDANT Cassie Miller

Job Responsibilities: Will supervise and interact with dogs in the play and boarding areas. Will perform opening/closing duties preparing premises for dogs in the morning and

clean up and closedown in the evening. Will arrange Special Events and be available to assist with events as determined by

level of assistance required by the Special Event’s Package purchased by customer. Primary duty is as Attendant and will always prioritize this function with other

duties.

EMPLOYEE – DOG ATTENDANT & Special Events Coordinator Jenny Combs

Unique Job Responsibilities: Will supervise and interact with dogs in the play and boarding areas. Will perform opening/closing duties preparing premises for dogs in the morning and

clean up and closedown in the evening. Will also make journal entries on daily activities and record all entries made by

other employees in computer. Will also assist in monitoring website activities. Will also assist with tracking inventory and supplies. Primary duty is as Attendant and will always prioritize this function with other

duties.

EMPLOYEE – DOG ATTENDANT Rayan Alzamil

Organizational Structure and Plan (Also see Appendix B)

Scruffy’s will employ a “flat” organizational structure and all operational decision making will occur on-site between owner/managers and employees. The owners will institute an open flow of communication with employees allowing for direct input in both directions. The owners will create an atmosphere where the employees feel recognized for their contribution to the business as well as valued for their input and appropriate suggestions. Employees will be encouraged to bring their own dogs to day care for free supporting the “home away from home” environment that Scruffy’s promotes. We endeavor to retain our valuable employees in part with an environment that fosters a desire to be responsible, affable and part of a team or better yet a “family.”

Governance Policies and Assurances

Scruffy’s, LLC will be run exclusively by its two owners/members and each owner controls fifty percent of the company. All major strategic issues are made in accordance with the LLC’s Operating Agreement that spells out the financial and management rights and responsibilities of the LLC members, such as: who contributes what if the LLC needs additional capital, when and how profits from the business will be distributed, under what terms members can leave the LLC, etc. At this juncture all decisions and assurance of receiving profit and collateralizing debt are to be transacted equally 50/50 by both members.

Key Advisors and Supportive Services

We will use the outside services of an attorney on an as need basis. The attorney will be retained to act as “Agent of Record” for business reporting purposes. The attorney will also help draft the Operating Agreement between the two owners as well as drafting any other necessary documents. We will consult with the attorney when we are required to enter into any legal agreements such as lease on commercial property or dealing with any issues of liability. The owners will not hesitate to employ the use of the attorney to act on behalf of the interests of the owners when any questionable situation arises.

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We will also use the services of an outside CPA or Accounting firm to prepare yearly taxes based on the bookkeeping records prepared by the owners using QuickBooks Pro accounting software. We will also use the accountant on a monthly basis to assist in clearing out the previous month’s recording of all activities, reconciling accounts, generating an accurate Profit & Loss Statement as well as acting as an unbiased auditor of accounting practices and record keeping.

We will use the services of a payroll company such as ADP. These services are relatively inexpensive charging a low base fee plus an amount per employee for under $60 per month. The payroll company will report taxes, pay taxes that are withheld to the proper authority Fed. State. etc as well as compute and deduct taxes from each employee’s earnings and print the checks and deliver to business. The efficiency and time saving benefits are substantial.

We will use a Merchant Services company in order to accept credit cards at our location. We will look for the company with the lowest rates and best turn around, with funds available in our business account within 2 business days.

We may also explore the services of a web developer as our requirements for operating an extensive website with many features may necessitate the use of an experienced technician to assess our need and get our site up and running. At that point we hope to be able to maintain our site in house.

Organizational Responsibility

Scruffy’s goal of attaining a high community profile will come in part from being very active in the charitable and non-profit sector. Our love of animals and deep concern for their well being makes it imperative that we look for every available avenue for making a contribution of time, service, support or fundraising action to organizations assisting animals. Scruffy”s will be an active member of the fundraising community for organizations like The Oregon Humane Society. Scruffy’s will also take part in fostering animals as well as hosting and promoting adoption fairs. We hope to act as a mediator between those who want to give, such as the more affluent members of the community that frequent our business, and those with need in the pet community. We want to make a difference in the lives of animals in need and in the organizations that are serving those needs.

We will sustain our commitment to be involved and make ongoing positive contributions by planning in advance to take part in as many charitable activities as possible as well as hosting monthly activities in house that give to a particular organization. We would look for an opportunity to have an ongoing benefit such as giving proceeds of sales from a particular item to an organization. In the process of being proactive in the charitable sector, we will be establishing a reputation of giving back while etching our business, logo, and name into the minds of the pet/dog owning public. We want our name everywhere possible and if in the process of doing so we can have a positive impact on the community at large, all the better!

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Production Process and Operations

A doggie day care needs a lot of room. We estimate the square footage needs for our operations to be a minimum of 3000 interior square feet and minimum of 1500 exterior square feet. The lion’s share of the space will be dedicated to the play areas for the dogs. We will also require space for overnight boarding, u-wash and grooming, employee work areas, office space, retail, storage and cleaning areas. We will partition our indoor playroom into an area for big dogs and an area for small dogs and low energy dogs. We will also reserve a small area for dogs that need to be separated for behavior reasons, a time-out area.

The current commercial lease space market is very soft. We anticipate being able to find a larger “warehouse” like facility in a high traffic, high-visibility area for reasonable lease terms. The current market in our targeted areas suggests a rental rate of approximately $5000 - $6000 per month. Improvements will be necessary but should be minimal. The play space should be open and contained with very little other basic requirements. The space will be properly ventilated, heated and cooled to keep the dogs and humans at a comfortable temperature. The flooring should be a hard, easy to clean surface such as concrete, which is typical for warehouse structures. Conversion to a dog care operation in this type of space is functionally appropriate. Our location and space issues are specific and the success of the business depends greatly on the convenience of the location. The location must also provide for easy pick-up and drop-off of dogs and ideally would have a minimum of 4 parking spaces adjacent to building. We will need to make sure we have adequate time to search for a space meeting the basic requirements above. We anticipate beginning our search as much as six months in advance of our targeted opening date. Since it is more of a renter’s market we feel confident in negotiating a lease that makes allowances for reserving the property in advance of taking possession.

All equipment will be purchased as no high- priced items or high-maintenance items are required at this time.

We are a service industry business providing care for dogs so our production process will be labor intensive. An owner/manager will be present at all times the business is open to oversee operations, manage employees, and open/close the business. The owner/manager will also deal with all prospective and current customers when they come through the door. We will handle all duties front-of-house taking every opportunity to interact with the customer. We will also conduct the initial evaluations of dog behavior in order to determine dog’s readiness to be in facility. The owners wish to deal one-on-one with the customer at all times.

The bulk of the labor provided by the employees will be directed toward supervision, play and care of the dogs. The goal is to keep dogs happy and we achieve this through play, socialization with other dogs and lots of attention. We also want the dogs to be worn out and ready for an afternoon nap/quiet time so other duties can also be handled by employees. Employees are also expected to follow procedures for preparing and cleaning the facility. A typical structure for the day might look like this:

7:00 – 8:30 am Dog Drop Off

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This is the typical time for dog drop offs and will be an unstructured time for dogs to roam inside and outside and acquaint themselves with new dogs as they arrive

8:30 – 11:30 am Outside Playing (Weather Permitting)Lots of supervised and interactive play with the dogs.

11:30 – 12:30 Dog WalksThe dogs go on a walk. The walks will be rotated and not all dogs will participate.

12:30 – 1:00 Lunch TimeDogs will eat lunch, snack or treat provided by owner or business.

1:00 – 2:30 Nap and Rest timeDogs sleep in crates or beds provided or in boarding kennel if dog is being boarded.

2:30 – 4:30 Outside PlayingMore play. We will also work on special skills or agility with specific dogs during this time.

4:30 – 7:00 Pick-up timeDogs will have unstructured playtime inside and dogs can also roam to segregated areas to unwind and rest until they are picked up.

Dogs being boarded overnight will be fed, walked and retired to their kennel after closing. Dogs will be monitored electronically off-site with web cams used during day for play areas.

Customers may also choose to have dogs washed during their stay for additional fee. Or they may schedule a time to wash their dogs in our U-Wash tubs with all supplies provided. Employees will assist with set up. Grooming will be scheduled and performed by Groomer at specific times. Special Events are also scheduled in advance.

Quality control will be assured through the hands-on involvement of the owners. On-going assessment of efficiency of procedures, performance of employees and overall quality of the business’s environment and services being offered will occur with weekly meetings between the owners as well as monthly staff meetings for all. The staff meetings will focus on issues that arise during the normal course of business as well as on any improvements that can be implemented. Employees will be encouraged to contribute in an open discourse with owners.

Customers will be asked for their input on a regular basis with face-to-face interaction with owners, friendly and brief emails to customers, and comment cards available at the front counter. The perceived quality of the care and service being provided to our customers is paramount to retaining our customer and generating customer loyalty, referrals and word-of-mouth. We will constantly look for ways to get input from our customers in a non-intrusive fashion.

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Operations and inventory will be managed and monitored daily by the on-site owners. All services and products will be tracked with industry specific software.

Initially all product sold at Scruffy’s will be purchased wholesale from distributors such as PetWholesaler.com or other online distributor. Their bulk purchases from manufacturers allow smaller retail operations to purchase smaller orders without incurring higher costs. We intend to keep our retail offerings simple and limited and offer additional products only as customer demands warrant. Most of our products are moderate to high-end in price and quality. Some of the products we plan to carry are as followed:

Market Feasibility and Viability Total pet industry expenditures have grown steadily by approximately $2 billion per year from $29.5 billion in 2002 to an estimated $45.4 billion in 2009. Pet services such as grooming and boarding account for $3.4 billion of the 2009 estimate. The industry is expected to continue at the present rate through 2011. Based on the American Pet Products Association’s 2009-2010 Pet Owner’s Survey, Bob Vetere, President of the APPA, states, "The pet industry continues to grow at a record pace and the future is no exception. Pet owners and the companies providing pet products and services show no sign of letting up…. As pet ownership continues to rise, so has the demand for quality products and services."(APPA, 2009) (AVMA, 2009)

Product/Process Identification Scruffy’s…where every dog has its day, is a full service dog daycare, boarding facility, pet spa and specialty retail store. Scruffy’s provides a socially dynamic and nurturing play atmosphere for our customer’s canine companions with the added convenience factors of on- site grooming services, specialty retail products including dog food, treats, toys and more. Scruffy’s also offers a party room with full or partial service hosting for special events for our customer’s four legged friends. Our establishment provides the highest quality service through a well-trained, knowledgeable and caring staff and a low dog-to-attendant ratio. Scruffy’s prides itself in its attention to detail, making sure that each canine client and owner receives one-on-one attention and feels like a member of the Scruffy’s extended family from the moment they walk through the door. The initial process of registration provides the staff with the perfect opportunity to get to know dog and owner’s preferences and surveys the customer’s behavior and choices in choosing pet products and services. A client database records and tracks all the provided information allowing the staff to anticipate important events & future behavior and to meet the growing needs of our clientele. Market Identification and Segmentation Analysis

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DOG FOOD ACCESSORIESNatura Pet Products Leashes & Collars Clothes

Innova Planet dog West Paw EVO Patch & Scott BarkWear Karma Organics Bowls & Beds Fragrances

West Paw Pet Parfumes by KharaTREATS Toys Ines de la FressangeZuke”s Brand Planet Dog

In order to determine our Target Market we will look at the key factors that best describe the segment of the population most likely to use our service. We will start by considering general statistical information generated by firms currently tracking the pet industry. The APPM (American Pet Products Association), the AVMA (American Veterinary Medicine Association), IBISWorld U.S. Industry Report: Pet Grooming & Boarding, & Packaged Facts’ Pet Care Services in the U.S., 3rd Edition: Riding the Multiservice, Premium/Luxury and Corporate Waves, all provide and/or disseminate extensive up to date statistical information on the Pet Industry.

To get a picture of the local population of potential customers in our target geographical areas, we will conduct on-site surveys of current dog owners at local pet stores – primarily independent retailers- and at local dog- themed events in the Portland metro area. Our surveys will be designed to determine key factors such as:

SURVEY QUESTIONS

o Male or Femaleo What is your age? Response categories broken down into 10- year increments.o Do you have children living at home?o Do you make the decisions in your household of which products and services to

purchase for your pet? If not, who does?o Do you work Full time or part time?o How many hours are you away from your dog daily?o Which best describes your yearly household income? 0-$20K, $20K-40K, $40K-

50K, $50K-70K, $70K-90K, Over 90K.o Do you agree with the statement “I consider my dog to be a part of my family?

On a scale of 1 to 5, with 1 being “I disagree” to 5 being “I strongly agree.”o How much money does the dog owner estimate spending on their animal each

month?o Does the dog owner currently use pet care services, excluding veterinary services,

and which services are they using? (Ex) Pet Daycare, Pet Sitting, Over-Night Boarding, Pet Grooming, Pet Massage or Other Alternative Treatment, Do It Yourself Dog Washing At Facility).

o How much money do they spend on services?o How often do they use services?o If not currently using services, would they consider using services?o If so, which services are they most likely to use based on a scale of 1-5 with 1

being not likely to use and 5 being definitely would use?o How often would they use service, with 1 being never to 5 being four or more

days per week?o What factors will influence the use of the service? Cost, convenience, location,

high quality.o Which is single most important factor?

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o What other services and/or products would you be willing to use at a dog daycare facility? Over-Night Boarding, Pet Grooming, Do It Yourself Bathing, Products-Toys, Products-Food, Products-Collars/Leashes, Products-Pet Pampering.

o Do you own a computer?o Do you have access to the Internet at home or work?

Segmenting The Market

After compiling all the above information and conducting surveys at no fewer than ten establishments and events, we would expect to conclude the following:

Our Target Market is upper-middle class to upper class dog owners with larger than average disposable incomes and thus more money to spend on their pets. The majority of respondents in our survey were women and most made the decisions regarding purchases for care and products. 80% of individuals who Strongly Agreed or Agreed to the statement “I consider my dog to be a part of the family,” also reported using services and all of the Strongly Agreed used more than one service. Individuals who consider their pet to be a family member will have a tendency to treat their dogs like children and want the best for the pet. The human/animal bond appears to be the leading indicator for spending in the pet service industry as paired with higher average household income or per capita disposable incomes.

Our prospective client is most likely to work full-time outside the home and spend an average of 7.2 hours away from their dog on workdays. 79% of those surveyed had computers at home and 74% had Internet access.

Information from both sources, industry tracking and local surveys, support the following statements as describing dominate traits to be found in our Target Market:

Three fifths of Individuals using Pet Services have a yearly median household income of $70k or more. (Rueter’s,2008)

Women are the primary pet care providers and are primary customer base for luxury pet products and services. (Entrepreneur, 2008)

Upper-middle class to upper-class individuals with full time jobs outside the home. All age groups with no children in the home used more services and spent more money

on their pet. Older Individual Empty Nesters 50-60 who work outside the home spent the most money. Large numbers of dog owners have Internet access.

Geographic/Demographic Market

Our market comprises area codes within the three counties of the Greater Portland Area with the highest Average Household Incomes: Multnomah, Washington and Clackamas Counties. Population Growth, Income Growth, Average Household Income and Unemployment Rate are shown in Appendix C. Unemployment Rate is shown for purpose of showing there is an adequate supply of individuals to staff our location. (U.S. Census Bureau State & County Quick Facts)

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Special focus is given to Lake Oswego area codes 97034 and 97035. Lake Oswego residents have the highest Average Annual Household Income in Greater Portland at $79,196 (Greenlight Greater Portland, 2009) and currently the fewest dog daycare facilities (Portlandpooch.com,2009) per capita for dog owning households.

The APPA data (2009) indicates that 40% of U.S. households own at least one dog and the average number of dogs per dog-owning household is 1.7 dogs. This data is applied to the number of households in all three counties as well as the city of Lake Oswego in Appendix D.

Determining the percent of dog-owning households that use dog daycare and grooming services will allow us to more accurately pinpoint the actual size of the market in any particular area. Dividing that number by the expected number of facilities within a certain radius in that area will allow us to more accurately describe the expected percent of our market share. Psychographic and Behavioral Factors Our customer base is likely to feel doggie daycare is a highly desirable and often necessary alternative to leaving a dog alone all day. They may view socializing with other dogs as an important part of their dog’s day either out of a desire to provide their animal with the best possible environment by human standards or in order to alleviate behavioral issues related to separation and anxiety at being left alone. Our upper class clientele will often spare no expense when it comes to the care and pampering of their dog. (Mann, 2008) This particular customer may take their dog with them during the greater portion of the day and may spend more money on grooming services and high-end retail in relation to spending on daycare. The primary daycare customer will likely rate convenience and the multiservice, all-in-one feature of our establishment as highly important in choosing us over the competition and will use additional services and purchase necessary supplies in our retail store primarily as a matter of convenience. Our customer with a higher disposable income will consider the social, fun and perceived luxury qualities of the services provided. All customers will look to the benefit of a stimulating and attentive environment for their dog. The quality of the staff will most likely garner higher customer retention. The quality of our care, our facilities, and our attention to the details of our customer’s preferences and patterns will likely increase customer loyalty.

Differentiation Strategy

Research on our competitors in the local area has shown that while we cannot offer many new services to the doggie day care business, we can provide an innovative and customer-oriented way of taking care of pets. Scruffy’s will pride itself on customer feedback and response. Our business’ goal is to mold our company on what our customers want from a doggie day care service. Surveys and polls will help to determine what foods, shampoos, toys, etc. we will carry at our store. These surveys will be conducted in-store, online at our company website, and through mail fliers. Along with our customers’ favorite products we will also carry a variety of leashes, collars, beds, and other pet accessories. A specialty product Scruffy’s will carry is a dog birthday cake, made from nutritious ingredients. Dog owners are deeply connected to their pets, and want only the best for them. For us to help satisfy that concern, each dog that becomes a

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regular visitor will be registered in our database. A survey will be issued to the pet’s owner asking the dog’s preferences. Questions will include the dog’s favorite foods, treats, activities, etc. and will also ask about possible allergies, medications, and special needs. These preferences will be applied to the dog’s care in future visits. We also plan to host dog events periodically throughout the year. These will include dog parties, group play dates, costume contests, and other holiday themed events. This interaction with the surrounding community would help us stand out from other similar businesses. With innovative approaches, Scruffy’s will establish its name within the area and gradually build a respectable market share. Distribution/Promotion Strategy As a new business in the Portland-metro area, Scruffy’s will look to get its name out to the public as much as possible. Before our opening, a website will be designed in order to advertise online. Through websites such as Yellow Pages, Google, Yahoo! and other various online search engines, we will distribute our name to customers who use the Internet as their primary research source. Placing ads in local newspapers (The Lake Oswego Review, Portland Tribune, The Oregonian) will also help in distributing the business name to more customers. In the month prior to opening for business, we will advertise in the local newspaper with a flyer insert announcing our Grand Opening. The flyer would also have an attached coupon for a free day of daycare with the purchase on one day of care. Additionally, flyers and door hangers with coupons and milk bones will be distributed around town. Customers will feel more inclined to use our service knowing that they will be saving money doing so. If customers are impressed with the quality of care for their pets, they will refer fellow dog owners to Scruffy’s.

Marketing Implementation Plan

Sales Tactics:

One of our promotional strategies is to get involved within the community, creating a high profile and name/logo recognition. To get involved, we will start by going to local conventions that are catering to dogs and their owners, such as The Rose City Classic. We will set up a booth there distributing pamphlets and interacting with potential customers explaining why they should chose Scruffy’s for all their dog’s needs, pitching what makes us different from the rest.

We will get involved with local humane societies and no kill shelters. We will offer a promotional deal such as half off same day grooming or even one free grooming after rescuing a dog or puppy from a shelter, making sure that they came home with a perfectly groomed animal. This tactic will help because it will allow initial paw traffic through Scruffy’s and a good initial client base.

We will hand out brochures, coupons and business cards at pet stores and local veterinary offices and explore cross-promotional options with interested businesses. We will also post fliers with specials on community boards such as the ones in community centers across Portland as well as on community boars at pet friendly businesses such as The Lucky Lab Brew Pub. Finally, in order to get our business out in the public, we will run an ad in local newspapers that would feature 20% off new client coupon. Once we have the foot or paw traffic we will offer specials

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on frequently purchased products, such as buy ten large bags of dog food, get the eleventh bag 50% off. This will encourage customers to buy products at our store rather than going to local competitors.

Once we have a client in the door, we will then evaluate the needs and desires of both the owner and the pet. We will have a standard questionnaire that we the staff would go over with them. Once filled out, we will input this into the computer where we would be able to keep track of all information regarding this client, including the services that they seek, the products that they buy, and notes on the animals behavior and temperament.

To generate customer loyalty, we will make the client feel like they are the most important part of our business, which would be true. So in order to accomplish this, we will offer clients a standing appointment every month at the same day and time, with the ability to cancel or reschedule within 24 hours without charge. We will also make a phone call to that client at least 24 hours in advance to remind them of their appointment, showing the customer that we were thinking of them and if they do have to cancel, they don’t get charged.

Service and Warranty Policy:

The warranties that we will offer would be specifically based on products and the manufactures warranties. Unless the product is defective, in which case we would deal directly with the supplier/manufacturer of the product, the customer may bring the product back in original packaging and receipt for a full refund within 7 days of purchase or for exchange up to 30 days after purchase. We will also warranty our services such that if a customer were unsatisfied with a grooming service they will not be expected to pay for the service. In addition, every effort will be made to identify the source of the customer’s dissatisfaction and in turn rectify the situation. We will go out of our way to make our customers happy, keep them happy and keep them coming back. Any additional implementation of warranty on services will be considered as a situation arises if the situation cannot be anticipated and planned for in advance

Ongoing market evaluation:

In order to stay top dog in town, we will want to know what other competitors are doing, not just locally but regionally too. We will to attend regional pet industry shows and conventions to find out what is in high demand and what products are new to the market. Secondly, we will also ask for feedback from the customers themselves after obtaining one of our services to get a better idea of what the consumer’s demands are. We will want to know what our competitors price points on items are, so we will do research, maybe look online at their website if they have one, or even go in to the place of business to find out. We want to keep our prices competitive and maintain our client base. Once we have a higher and more stable base, we will be able to mark down more of our prices to certain products/services.

International Element

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To meet the international requirement, we will explore offering clothing products for dogs that are considered traditional attire for certain cultures. Secondly, because our target audience is upper-middle class to upper class, we will offer some

higher end international products as well. Because there is a high demand for French and English products, we will carry a select assortment of French products, such as Pet Parfums from Khara, a dog fragrance from France and Ines de la Fressange, another manufacturer of high end French dog products, specifically collars, ID tags, and dog beds. Another item we would carry is Patch and Scott, a London based product that manufactures Italian leather dog collars. Also, since we are offering birthday parties for our four legged friends, we will also have “Happy Birthday” written in different languages on the cake. The “Happy Birthday” song will be played from a CD in the language chosen when we bring in the dog birthday cake. Finally, we will be offering products such as dog collars and dog identification tags that have a nation’s flag on it.

Financial Plan

Aggregate Funding Needs/Financing Sources:

In order for Scruffy’s to become financially stable, an initial cash investment is necessary. Considering there are two owners of Scruffy’s, we will each invest $25,000 into the company. This will provide a total of $50,000 towards the business. However this amount will not cover all expenses until “break-even” point. To compensate, Scruffy’s will obtain a bank loan of $60,000. This loan will be over a 5-year span at 8% yearly interest. Monthly payments of $1,217 ($3,651 per Quarter) will be paid with additional $217 of interest per month, leading to a total of $1,434 per month (or $4,302 per Quarter). Once Scruffy’s has a stable income and has an established market share, a reimbursement of the initial $25,000 will be distributed to each owner.

Contingencies and Cash Flows Sensitivities:

(Sales of products/services are lower than predicted.)In an attempt to increase sales during a lower than predicted period, additional funds from Contingency amount will be directed towards advertising. The distribution of coupons/discounts along with increased company name distribution will provide higher sales.

(Additional doggie day care businesses invade market share.)As additional businesses move into Scruffy’s market share, an increased attention will be paid towards customer satisfaction. To keep “regular” customers coming to the business is essential in our success. Additionally, funds will be used to increase advertising and promotions.

(Cost of supplies increase at an unexpected rate.)If the price of products increases, Scruffy’s will attempt to find a different distributor of the product at a cheaper price. If Scruffy’s is unable to do so, funds from the contingency account will be used to cover additional expenses.

Financial Controls and Management Practices:

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As Scruffy’s initially enters the market, it will be difficult obtaining a share. A large part of the pet care market share is based on customer loyalty and trust. However, with our innovative approaches toward the market, we expect to see business become profitable in a short amount of time. Considering the majority of work in the pet market is service-based, Scruffy’s expects to see a rise in profits while inventory and supplies costs stay relatively low. We plan to break even within our first year of operation (See Appendix E & Appendix F). Scruffy’s also plans to maintain salary at a moderate level by preserving a low number of staff for the first three years. Given time, Scruffy’s revenue will increase at a steady rate. This can be attributed to the characteristics of the market. Recent years have provided statistics that show the pet care market is rapidly growing. With increased name recognition and “word-of-mouth” recommendations from customer to customer, our company will build its reputation and flourish.

Financing Sources and Form (See Appendix G)

Capital Structure

The Capital Structure will be comprised of $50K from Owner Equity and $60K from Debt.Each owner contributed half, $25K a piece, to owner equity to fund start up of the business and each is equally responsible for the debt of the loan. Each owner maintains a 50% share of ownership in the company.

Long-Term Financial Strategy

As the pet service market continues to grow, Scruffy’s day care will become more profitable. Our memorable, visually appealing and very recognizable logo is highly replicable and hopefully etched into the minds of the dog owning community by our third year. Once firmly established in our first location, we will begin expansion to a second location. Our goal is to plan for a second location by year three -five and structure a growth plan that could allow for two to three more locations in the next two years after that. All locations would be based in Oregon and would look to be ahead of the pack in establishing themselves in high growth centers with few or no other options available for dog care. Scruffy’s will also plan to move into the Portland Metro area as our reputation and community visibility grow. We want to be the first name that comes to mind when someone thinks “doggie day care.” Possibly, ownership of the business would be sold, with the owners sharing the profits. However, it is not within the owner’s plans to sell the business within the next five to seven years. With the market increasing, we feel that the market is still in its growth stage, and likely to produce large profits.

Critical Risks, Problems and Assumptions

The Pet Industry and in particular the Pet Services Industry continues to grow in the midst of a severe economic downturn The human-dog bond fuels consumption of services for dogs as owners treat their animals as they would children. Dog owners will often forgo daily luxuries to provide for the needs of their pets. “In tough times, pet owners tend to scrimp on pet toys and

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products but they still shell out the dough to ensure that their pets are healthy and happy.” (Wilson, 2009) We assume that this trend will hold fast and the industry will continue grow.

We assume that as unemployment is relatively high (Melissa Data,2009) (Greenlight Greater Portland,2009) we will have no problem finding employees to staff our location. We also assume that the nature of our business being specific to the care of dogs will make it desirable to dog lovers. The skills needed are limited so we don’t have concerns with competing with other businesses for highly skilled employees.

We assume that the timing for entering the industry in the Portland area, though not ideal as there are many establishments already operating, is still placed on the upward curve of demand for the service as it relates to industry trends, numbers of dog owning households and population growth forecasts. Portland is a dog-loving town with many dog-owning households. Portland is no exception to trends portraying increases in dog ownership, increases in status of dogs in an owner’s life and increases in spending on services.

For our business to be successful we need to generate steady growth in clientele. Our sales projections reflect this steady growth. We assume this growth to be conservative and well within the range expected for the industry as well as for acceptable levels for a new business. Of course, without customers bringing their dogs to our location we will have no sales, cash flow, earnings, profits and no business.

Competition from current establishments as well as new business entering the market serves as the greatest risk to our venture. We rank this as the number on problem we face. It will be critical to market and promote ourselves in such a way that we can carve out a strong market share. Not only do we need to reach customers who have not yet used our type of service, we also need to create a compelling reason fro customers to leave our competitors. We assume that convenience and a high quality of service will be the key in getting their business. A goal of very high customer satisfaction will be our mission.

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