While there are many reasons why some businesses succeed and others do not, one of the most important factors is choosing the right industry at the right point in time. One of the industries that many investors are currently betting on is the pet industry, and here are six reasons why.
1. It’s recession-proof.
A while ago, I asked Alexis Perakis-Valat, former CEO of L’Oréal Germany and now part of the global management committee, why he chose the cosmetics industry. He said that while there were many reasons, one of the most important things to him was to choose an industry that is recession-proof.
Ever since then, I have analyzed certain industries in which to open my businesses to see just how recession proof they are. The pet industry seems to defy all odds during recessions and has been very little affected by economic crisis so far.
2. It’s predictable.
The nightmare of every entrepreneur and investor is to have a seasonal business. Seasonal demand limits the cash-flow to a couple of weeks per year, which means you need to stack up on inventory based on an estimate of future demand. Needless to say, that this is not ideal. However, there is a difference between a seasonal product and a relatively well-predictable demand that has seasonal peaks.
Predictability is worth more than high demand during Halloween (e.g. for a costume shop) or Christmas (e.g. for a Christmas tree manufacturer), because it reduces the risk of having too much inventory and allows for long-term planning. As seen on the Google Trends traffic, the pet industry has peaks in December but maintains a steady level of base demand throughout the year.
3. There is no need to educate the customer.
If you are a fan of Shark Tank or Dragon’s Den, you know that some of the most innovative products and services do not get funding. The reason being that the biggest expense would be to educate the customer on what the product does and why it is so important.
The vast majority of new pet products need no explanation whatsoever. Pet owners already know that health, training and the entertainment of their furry family members is important and are happy to give new products a shot in the hope that it will benefit their pets.
4. The industry benefits from the Kinderschema.
Ethologist and biologist Konrad Lorenz studied what set of traits makes things appear cute to us. This set of traits is now known as the so-called Kinderschema which describes the head-to-body ratio, the position of the eyes (below the midline of the head), and size of the eyes relative to the size of the head and more. The idea behind the Kinderschema is that we are hardwired to find things cute whether we want it or not.
One of the reasons products for children and pets are attractive to many entrepreneurs and investors is that these industries benefit enormously from the Kinderschema. We are attracted by puppies, kittens or any young animal for that matter because they have the perfect Kinderschema. Big eyes, a large head, the right head to body ratio and other traits that our subconscious perceives as adorable.
5. Good margins
For retail businesses, you are looking to have an average margin anywhere north of 60 percent. While dog and cat food margins are mostly around fifty percent, the most popular items such as chewing toys and bones have 70 percent margins. Food for pets accounts for slightly more than a third of the entire market, with 23.04 billion spent in pet food annually. Designer collars, luxury clothes and other high-end accessories for dogs also have great margins, which helps to keep the average margin high.
6. Growing market
The pet industry is not only attractive for retailers but also for service businesses. There was a steep increase in demand over the recent years as the number of pets has grown to 312.1 million. Since 1994, the market has more than tripled in size and grown from 17 billion to over 60 billion in 2015 in the U.S. alone. This means that not only are there more pets who need to be fed, walked, entertained, groomed and boarded, but pet owners continue to spend money on them as well.
Dog owners spend an average of around $1,641 and cat owners approximately $1,125 per year. Less than two thirds of the costs are spent on vet visits, leaving the remaining two-thirds up to retailers and service businesses.
You’re reading an article published by The Business Post.
Taking up a franchise is a way of buying into an already robust business model, but franchisees must be fully committed to keep up a brand’s standards.
You buy your morning coffee in one. Your lunchtime sandwhich or salad is the product of one. Fancy a gym session after work? You could be working out in one. Or if you’d prefer to go home, flop on the sofa and order a pizza, you can make a call to one.
According to industry trends and projections, the pet business will continue to boom unabated in the future. While the forecast is healthy across the board, certain segments in the pet industry are seeing a significant amount of growth.
Natural Pet Products
Natural products, in general, are gaining widespread popularity. This is because people have become more conscious about improving and sustaining the health of the planet. Consumers are also increasingly leery of the potential toxicity of synthetic chemicals and other harmful materials.
In addition to a desire to decrease their pet’s carbon paw prints, pet parents are opting to purchase natural products in an effort to maintain and/or improve the health and well-being of their beloved companion animals.
Another pet enterprise that is gaining a lot of popularity is the self-serve dog wash. In addition to offering ease and convenience for pet owners, this concept offers many unique retail opportunities.
To a lesser degree, unique niche services such as yoga for dogs and pet psychic communicators are in-demand industry trends.
In and of themselves, these services are not huge. They do, however, offer great potential as promotional services to increase a pet business’s visibility and ability to attract more store traffic.
More Hot Pet Industry Trends
Mobile pet grooming. This service involves the use of specially equipped vehicles that travel to pet owners’ homes. It allows groomers the ability to perform a full range of services right outside the customer’s door.
This is a very in-demand service because:
It’s convenient for the customer.
It reduces potential stress on the pets.
It’s perfect for home-bound older people who have companion animals.
On the downside, initial start-up costs for such an enterprise are hefty. Those in a position to make an investment in this are virtually guaranteed high business growth dividends.
Pet-friendly travel. This is another high business growth concept that’s being adopted by an increasing number of businesses in the vacation and hospitality industries.
As more and more people regard their pets as beloved family members, they are opting to take them along on vacations.
Moreover, people are more mobile and may have to travel long distances to relocate for jobs, retirement or other purposes.
Takeyourpet.com – An information resource and directory for those who travel with companion animals.
Pet-friendly Travel Apps – A number of apps are available that can direct consumers to places that welcome cats and dogs.
An increasing number of hotels, motels, and inns, including New York’s posh Carlton Hotel, now welcome pets. It’s a very smart move for those who wish to facilitate business growth and it’s sure to remain a red-hot industry trend for a long time to come.
Pet health insurance. Although available in the U.S. for a good 30 years, sales of pet policies have only begun to accelerate in recent times. This trend is expected to proliferate dramatically and offer the enhanced potential for pet business growth due to a number of factors.
People increasingly regard their pets as beloved family members.
Pets (like people) are living longer, requiring more complex and extended medical care.
Advances in veterinary technology have resulted in more costly medical care.
This industry trend presents such a huge potential for business growth that corporate behemoth Nestle Purina even got on the bandwagon by launching Pethealth Inc., a pet insurance subsidiary in 2008.
Fast Fact: Pet parents spent $13 billion on vet bills in 2010 and, according to the APPA, that increased to $14 billion in 2013.
Although this is an extremely complex business, getting in on it may be a very smart move for those who have the inclination.
Pet Industry Trends of the Future
These are just some examples of products, services, and concepts that offer great potential for business growth. Considering that American pet parents are expected to spend even more on their companion animals in the future, the sky’s the limit for those who have a good head for business and genuine love of critters.
You’re reading an article by Christina DesMarais published on Inc.com.
Here’s a 91-year-old’s advice on how to thrive while working into your golden years.
Maybe you can’t afford to retire. Or maybe you’re like serial franchisee Bob Thomson, and you don’t want to. At 91, he owns several restaurants within the Subway Sandwiches and Pancheros Burritos franchise organizations, with the latter having recently named him “Franchisee of the Year.” Happily working decades beyond the magical age of 65, here are his words about how anybody can follow suit, and thrive doing so.
Rule 1. Use a positive cash flow to love the work you do.
The best guarantee for being miserable in business is to either not make money or not make enough for a comfortable living. A positive cash flow can make up for lots of little day-to-day problems in business. The absence of a positive cash flow will turn those little problems into an unending series of catastrophes. The result of that will be bitterness–at business and at life–and who wouldn’t want to retire if that’s the alternative?
Rule 2. Do everything you can to learn from other people’s mistakes.
Yes, courage and perseverance are virtues, but in business they should never trump common sense. Those virtues can be a prescription for disaster and years of misery. If you’re losing money, the market is probably telling you, “Hey, dummy, go do something else.” There’s no shame in listening to the market. It’s called “learning.” If you’re embroiled in some business endeavor that’s losing money, and the only way for you to make money is for a bunch very unlikely things to happen in just the right order, my advice is to throw in the towel. I know. I’ve done it.
Rule 3. Purchase experience from the experts.
I suppose there’s a chance that I could–with enough time, patience and capital–have come up with the perfect way to sell sub sandwiches at a profit in my hometown of Charles City, Iowa. Why on earth would I do the experimenting on my own nickel when, for a collection of relatively inexpensive fees and conditions, I can purchase expertise from the recognized world authority on sub sandwiches, the Subway organization? I don’t have to guess at how much mayonnaise to use or where to get the best Black Forest ham. I don’t have to scout out the best advertising deals or the best point of sale terminals, which are tasks that would probably bore me anyway.
Rule 4. Vet the hell out of any franchise.
I am involved in two franchise systems now, and I love them both. But I’ve been involved in several others, and I have looked at literally hundreds as possibilities. I have learned the hard way that time spent kicking the tires of a franchise concept cannot be overemphasized.
If you want to succeed, you need to get into honest conversations with people high, low and in between in several regions where the franchise operates. What’s the attitude of the line workers toward “corporate?” How many of the franchise owners currently in the system would make the same investment all over again? What does the P and L of that franchisee look like? How are merchandise “turns” supposed to work in the system? Who are the key suppliers, who picks them and are they reliable? Are there controls on franchisees to keep them from sourcing through competing, junky vendors? How does financing work for working capital, periodic upgrades, and the acquisition of new franchises? What do banks think about this franchise compared to its rivals? What does the secondary market for the franchise look like, and how does it work? What are the key indicators you can monitor daily to gauge the health of the business? Are there healthy groups of franchisees who come together to support the brand?
Rule 5. Make sure you want to be married to this job for the next several years of your life.
This is true for any business, but particularly a franchise.
Rule 6. Get a territory, or some similar protection against cannibals.
Rule 7. Never stop developing and reinforcing good habits.
Virtually every day since August 27, 1958 (the day of my daughter’s birth, and the day I bought my first store), I have checked the sales of my businesses, reconciled the sales to the cash deposit, and reconciled the deposit to the bank balance. I do this because no businessman can stay in business if he does not constantly monitor the cash drawer. This started out as a necessity–because I had very little capital and even less margin for error–but now it’s ripened into a good habit. Others that I recommend:
Keep active in the community of franchisees, even if some of them are tedious.
If there is a group of dissident franchisees, steer clear of them.
Make a point every day of doing several things to make you a part of the local business community.
Reward your trusted employees, especially with a sincere compliment.
Keep thinking of new ways to reward your employees.
Try to promote from within your organization.
Most importantly, never forget that all business is fleeting; the most important reckoning is the final one, with that Great Franchisor in the sky.
Wag N’ Wash expands with its first Seattle location on Queen Anne Avenue
Queen Anne has gone to the cats and dogs. And a Wolfe has made it all happen.
Last weekend, Wag N’ Wash Natural expanded with its first Seattle location at 1932 Queen Anne Ave. N., bringing its own spin on the pet retail and grooming market under the direction of co-owners Bill Wolfe and Andrew Held.
The partners live just four blocks from the store, and had previously been customers of the chain’s Phoenix location.
“We knew the concept and loved it,” Wolfe said. “There was nothing up here like it, so we just got in the habit of pointing out great, empty store spaces for a Wag N’ Wash.”
Wolfe and Held moved to Seattle a few years ago, after the latter received a job offer in the city. The duo landed in Queen Anne; Wolfe said after originally targeting the core of the city, they fell in love with the neighborhood.
And for years, living just a stone’s throw from the new store, they would walk by the empty storefront with their pet schnauzers.
But what began as a thought in passing morphed into something more serious. Eventually, they committed to opening a Wag N’ Wash of their own.
Wolfe said he’s “dug deep” back into a previous career, previously working in hotel operations, in opening the store.
“It was really just kind of like jumping back into it,” he said. “I found it fairly easy.”
While Wolfe is quick to acknowledge other pet-centric stores in the area, he believes Wag N’ Wash has a unique combination of offerings not found in the area.
“There are a lot of other great pet food stores in the area,” Wolfe said. “They do a fantastic job, they’re very well educated, have a great staff, but they don’t have the self-wash, or they don’t have the bakery, or they don’t have the full service grooming. What sets us apart is we’re an all-in-one.”
Wolfe emphasized the self-wash as a particular asset that separates his store.
“That was the thing I missed the most when coming up to Seattle,” he said, noting that he would often clean his schnauzers in between grooming sessions.
In addition to its selection of all-natural pet foods, high-end supplements, and toys, the store also houses a bakery, with a variety of treats made from human-grade ingredients.
“Their food philosophy is pretty much anything that’s good for you and I should also be good for our pets,” Wolfe said.
While he said he’s confident the business will do well, Wolfe also noted his amazement by the number of people to walk by and wave, or stop in and say hello as he readied the store for its official opening.