4 Tips for Planning Your Pet Resort Legacy
By Eyal Cohen
One way or another, you are going to leave this profession. Some are fortunate to have their children ready, willing and able to perform the hard work it takes to run a pet resort, but most owners don’t have that luxury and may choose to sell it to their employees, often having to finance the deal themselves. Another option is to close the business, leaving nothing behind but many years of hard work and a void in the community.
One of the best options is to sell your business to someone already in this industry. There are many private buyers as well as corporate buyers that are looking to expand their operation and footprints in the US. Nearly every consultant will advise you to think about the metrics that a buyer is looking to acquire, then build your business accordingly.
Here are four tips for selling your pet care business to a corporate buyer:
1 Be mentally prepared and determine the right time to sell.
Are you ready to leave the business today, in one year, three years or five years? Are you prepared to talk to your team about selling the business? These personal questions need soul-searching thought and analysis. You must have a clear understanding of your own goals and the objectives of your staff while preparing for a sale.
2 Make sure your facility is attractive to buyers.
A safe and well-maintained facility that looks fresh and can attract new customers is more appealing to a buyer than an old, tired-looking facility. Nobody wants to pour a ton of capital into their new business as soon as they take possession of the keys.
3 The books need to be as fresh as the premises.
At a minimum, you should know your monthly revenue, your profit margin, your labor ratio, the average number of pets per night and your client turnover rate. Buyers also want to know the length of your lease or if you own the property and plan on renting it to them. Be prepared to supply at least three years of business tax returns, detailed payroll information and the percentage of revenue that each service line adds to the gross revenue.
4 Have capable staff and thorough procedures in place.
Do you have a general manager that can truly run the business daily without the owner’s assistance? Is the general manager able to understand basic financial documents like cash flow statements, balance sheets and P&Ls? Most buyers are looking for investment opportunities and do not want to buy themselves a job. Make sure you have well-written manuals that define, in great detail, every function of the work that needs to get done. Also, your staff should be properly trained to maintain the safety and comfort that today’s pet parents demand.
Think objectively about whether you would buy the business if you didn’t own it and were in a different industry. It’s not easy to do, but your objectivity will reveal truths about your business and force you to make some changes so that when you’re ready to sell, it’s attractive to a wide audience.
Eyal started his career in the diamond business, but his passion for diamonds is equal to his passion for dogs, which led Eyal to join a growing pet resort and veterinary business in the metropolitan NY area, ultimately building and acquiring 14 locations. He learned every aspect of operating a pet resort from the ground up. In June 2021 Eyal and his partners sold their pet resort and veterinary businesses to NVA. He is now pursuing other interests in the pet resort industry.