Large 9,000 Sq. Ft. Pet Boarding Facility in NE Virginia
With boarding room for over 80 dogs and 6 cats, and 50 doggie daycare spots, this large facility is for sale in the DC area. Earning a 21% profit margin and nearly $600k in sales, this business draws long-term clients and reservations are a must during high seasons. Areas of growth include offering full-time grooming as well as board and train services.
With a new location opened in 2004, this bright facility has been tailored to the needs of this business. With boarding options for pups that include 52 double decker runs, 8 suites, and specialized pens for very small or senior guests, this facility is a dog’s home away from home. The deck is a big beautiful room for dogs that has doors with screens on three sides, allowing for fresh air and sunshine even during inclement weather. There are also outside yards for individual and group canine playtime. For the feline clients, they have a separate private room with standard cages. In addition to the boarding facilities, there is a large area for daycare dogs to romp around and socialize.
The owner of this facility encourages great care and attention in every interaction with an animal and clients in their care. Daily operations include at least two meals, dogs exercised at least three times a day, main run cleaning in the morning and throughout the day as needed, medication administration, and ample play time. Additional offerings include obedience classes for puppies, adult basic skills, and odor training in the daycare room in the evenings. The team is truly one that loves animals and who works diligently to provide a safe and happy place for cats and dogs alike.
- Year Established: 1972
- Location and Service Area: Northeast Virginia
- Clients: Cats and dogs
- Capacity: Boarding dogs (80), boarding cats (6), daycare dogs (50)
- Services: Boarding (60%), Daycare (30%), Obedience (10%)
- Building: 9,000 sq. ft.: Office, waiting room, staff room (25%), Cat room, dog kennels, training area (75%)
- Reason for Selling: Family illness
- Employees: 12: 5 FT, 4 PT, 3 Seasonal
- Hours: Hours vary M-F 7AM – 5/7PM, Sat. 7AM-12PM, Sun. Split hours for pick-up and drop-off
- Seller Training Period: 90 days transition
- Growth Opportunities: Offer supplemental services such as acupuncture and massage, offer grooming, include board and train services
- Current Owner’s Responsibilities: Owner/operator
- List Price: $412,000
- Gross Sales:
- 2018: $433,029 Jan-Sept
- 2017: $597,492
- 2016: $408,489
- 2015: $647,578
- Cash Flow:
- 2018: $98,241 Jan-Sept
- 2017: $12,994
- 2016: $91,793
- 2015: $163,466
- Assets Included in Purchase*
- Equipment: Fencing, playground, computers, washer and dryer, grooming equipment
- Intangible Assets: Excellent social media reviews across multiple platforms, Cross-trained employees, decades developing a positive reputation and fostering trust in their clients, long-term clients
*amounts may vary
Cash Flow Analysis
|Description of Financial Statement||P&L Statement||Tax Return||Tax Return||Tax Return||Notes|
|Net Income Shown on Financial Statement||$97,301||$108,739||$36,162||$80,431|
|Seller's Cash Flow = Total Addbacks + Net Income||$98,241||$124,994||$91,793||$163,466|
|Profit Margin||22.69 %||20.92 %||22.46 %||25.24 %|
- 2017 profit margin: 21%!
- Dip in 2016 can be attributed to low staff numbers and the resulting inability to achieve capacity. All concerns have been resolved.
Typical Clients and Services
- Boarding (60%)
- Daycare (30%)
- Obedience (10%)
Specific information regarding clients is available upon the receipt of a signed Non-Disclosure Agreement.
- Total Employees: 12
- 5 FT
- 4 PT
- 3 Seasonal
- Four employees have been with the company for over 10 years!
- There are two specific daycare employees, while all other employees are cross trained.
- Offer supplemental services such as acupuncture and massage
- Offer grooming
- Include board and train services
The Firm Business Brokerage used a cash flow valuation methodology to determine the purchase price of the business.
The formula used is as follows:
Cash Flow x Prescribed Multiple = Fair Market Value
Cash flow is the sum of business net income plus any owner perks and any non-onward going expenses.
A multiple is prescribed by a 20 question, 100-point parameter ranking system that is used to analyze the current business health. Each question is based on a scale from 1 to 5: 1 being low, 2 below average, 3 average, 4 above average, 5 high. The average of the responses sum is the business’ prescribed multiple.
For this business, a 2017 cash flow was used with a prescribed multiple is 3.3. With this information, the computation is as follows:
$124,994 x 3.3 = $412,480
The fair market value found above positions the business list price at $412,000.
Purchase Price: $412,000
12.5%Buyer Down Payment: $51,500
12.5%Seller Financing: $51,500
75%Bank Loan: $309,000
Seller financing 5-year term at a rate of 4.50% equals a monthly loan payment of $960.
Bank loan 8-year term at a rate of 6% equals a monthly loan payment of $4,061.
After business expenses and loan payments, a buyer with a 12.5% down payment of $51,500 would retain a profit of $64,744, which results in a 125% return on investment in the first year.
A lender is required to have a minimum 1.5 coverage ratio for any business loans extended. At a proposed purchase price of $412,000 with the terms listed above, the coverage ratio is 2.07.
Please note that the decision of whether to extend a loan on any sale belongs to the bank, and this document does not guarantee specific terms or verify that financing is available.
Offer Price: $
% Buyer Cash Down at Closing: $
% Seller Carry Back via Promissory Note: $
year term at a rate of %
% of Purchase Price secured by Buyer and Seller
Total Bank Loan Need: $
% of Purchase Price
Desired Loan Type:
Desired Bank Terms: year term at a rate of %
Total Business Assets, Inventory, and A/R: $
Total Undercollateralized Loan: $
|Monthly Payment to Bank:||$|
|Yearly Payment to Bank:||$|
|Monthly Payment to Seller:||$|
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|Total Monthly Debt Service:||$|
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Fixed Charge Coverage Ratio
The bank will require a minimum ratio of 1.5 to be lendable.
2017 Cash Flow
|Annual Debt Service:||$|
Buyer's Net Operating Income (NOI)
The amount of money the Buyer will retain as profit.
2017 Cash Flow
|Annual Debt Service:||-$|
Buyer's Return on Investment (ROI)
The rate of return on the Buyer's down payment.
|Document Title / Description|
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