Opportunities
North Carolina Dog Daycare, Boarding, & Grooming
Sold
A popular dog daycare with a great staff!
Specifications
If you are looking to own a successful dog daycare in North Carolina, this business is for you! With an outstanding reputation and many regular clients, this business is a fun and exciting opportunity. The entire 7,000 square foot space was remodeled in 2014 and boasts three large playrooms with rubber flooring to keep the space clean for puppy paws.
With a capacity of over a hundred dogs, there are roughly 70 dogs that attend each day. Separated by size, temperament, and play style, pups are treated to excellent care and can be fed or given medicine as requested. Dogs are only crated during nap time and get plenty of outdoor time when the weather allows. In addition to daycare and boarding, grooming services are offered by a highly experienced professional. Individual grooming services are available Monday through Friday.
The staff loves and cares for the client dogs as their own and this is an important part of the company’s culture. High-quality care for clients is essential for this company and their stellar reputation is built upon the dynamic service offered. The management is well-trained and with good tenure, but current employees can assume many of the owner’s roles during the transition. With such a dynamic staff and excellent care, it’s no wonder this business has excellent customer satisfaction and social media reviews!
Business Highlights
- Year Established: 2008
- Location: Large city in North Carolina
- Services: Dog daycare, boarding, and grooming
- Lease: 7,000+ sq. ft.: three playrooms (toy, romper, and gym), 1,500 sq. ft. outside space, rubber floor
- Reason for Selling: Career change: The owner would like to find a buyer that loves animals and who will guarantee a high level of care for the animals.
- Employees: 17: Manager (1), Assistant Manager (1), Groomer (1), playroom attendants (14)
- Hours: M-F 7-7, Sat 10-5, Sunday specialized pick-up hours
- Seller Training Period: 90 days transition
- Growth Opportunities: Increase staff to increase capacity, open a second location, increase grooming services, increase specialty services
- Current Owner’s Responsibilities: owner/operator/oversight
Financial Highlights
- List Price: $425,000
- Gross Sales:
- 2018: $852,144 Annualized
- 2017: $880,348
- 2016: $785,551
- 2015: $891,360
- Cash Flow:
- 2018: $171,757
- 2017: $121,611
- 2016: $209,841
- Assets Included in Purchase*
- Equipment: $11,000: Kennels, computers
- Build-Out: $85,000 in leaseholder improvements
- Intangible Assets: Recognizable name, excellent customer satisfaction, excellent reputation, good online presence, dog-loving and attentive staff
*amounts may vary
Cash Flow Analysis
| Description of Financial Statement | P&L Statement Jan-July | Tax Return | Tax Return | Tax Return | Notes |
| 2018 | 2017 | 2016 | 2015 | ||
| GROSS SALES | $497,084 | $880,348 | $785,551 | $891,360 | |
| Annualized | $852,144 | ||||
| Net Income Shown on Financial Statement | $51,388 | $-2,251 | $177,259 | $212,265 | |
| ADDBACKS | |||||
| Compensation to Owner | $17,750 | $48,000 | $0 | $0 | |
| 11% Tax on total W2 Salaries | $1,953 | $5,280 | $0 | $0 | |
| Depreciation | $0 | $14,392 | $11,908 | $12,848 | |
| Interest | $14,711 | $23,191 | $4,072 | $6,269 | |
| Amortization | $0 | $17,279 | $3,356 | $4,028 | |
| Contributions/Donations | $6,400 | $0 | $0 | $0 | |
| Life Insurance | $6,356 | $10,896 | $10,896 | $10,896 | Personal expense |
| 401K for Owner | $1,371 | $2,350 | $2,350 | $2,350 | Personal expense |
| Gifts | $263 | $2,474 | $0 | $0 | Non-onward going expense |
| TOTAL ADDBACKS | $48,804 | $123,862 | $32,582 | $36,391 | |
| Seller's Cash Flow = Total Addbacks + Net Income | $100,192 | $121,611 | $209,841 | $248,656 | |
| Annualized | $100,192 | ||||
| Profit Margin | 20.16 % | 13.81 % | 26.71 % | 27.89 % |
- Staffing issues affected the income in 2017.
Services
2015-2017 Combined:
- Daycare: 54%
- Sales: 25%
- Boarding: 13%
- Grooming: 6%
- Spa: 1%
- Evaluation: .18%
- Retail: .15%
- Vet Visits: .14%
Employees
Employees 17:
- Manager (1)
- FT
- 9 years
- Salary
- Assistant Manager (1)
- FT
- 3 years
- Salary
- Groomer
- FT
- 20 years of experience
- 50% commission
- Daycare and playroom attendants (14)
- All PT
- 3 individuals trained to work the front desk
Growth Opportunities
- Increase staff to increase capacity
- Open a second location
- Increase grooming services
- Increase specialty services for additional revenue
- Include online booking and payment options
Valuation Details
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 3.5. With this information, the computation is as follows:
$121,611 x 3.5 = $425,639
The fair market value found above positions the business list price at $425,000.
Funding Example
Purchase Price: $425,000
12.5% Buyer Down Payment: $53,125
12.5% Seller Financing: $53,125
75% Bank Loan: $318,750
Seller financing 5-year term at a rate of 4.50% equals a monthly loan payment of $990.
Bank loan 8-year term at a rate of 6% equals a monthly loan payment of $4,189.
After business expenses and loan payments, a buyer with a 12.5% down payment of $53,125 would retain a profit of $59,460, which results in a 112% 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 $425,000 with the terms listed above, the coverage ratio is 1.96.
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.
Print, sign and send to:
210 N 78th St. 2nd FloorOmaha, NE 68114
Or fax to:
f 402.939.0857