These dogs are made for walking
Pet owners are estimated to spend over $3 billion a year on pet food. In combination, dog and cat food represents almost 90% of all pet food expenditure.
NAME: Grace Carter
BUSINESS: Grace the Dog Walker, Sydney.
QUESTION: As my business grows, when is the best time to take it up a notch. What kind of things do I need to take into account when I’m thinking of expanding?
Ioperate a dog-walking business based in Sydney. Apart from just dog walking, we offer walking-and-feeding packages that start at $20 and include a 30-minute walk. There is also a dog-sitting service available to clients who are taking a holiday. For a single visit per day we charge $25, a fee that includes a 30-minute walk and feed.
My question is, how do I know when my business is ready to expand? What milestones should I look out for to tell me it’s time for extra staff?
1 Dog lovers are a big market
Grace, congratulations on operating your own small business. I can see you’ve done your homework.
Australia has one of the highest rates of pet ownership in the world, according to the RSPCA. About 62% of households own pets. Better still for you, dogs are the most popular. It’s estimated that there are 4.8 million dogs, or 20 for every 100 people.
That’s a massive number of mutts to walk, so it sounds as if there’s a big market for your business. Moreover, if your customers love your venture and are beating down your door to get help to walk, feed and doggy-sit their pooches, then you have your first expansion indicator in place. A surge in new business is another revealing sign that it’s time to consider an expansion. That said, be sure your repeat clients don’t suffer in the flood of new business.
2 Ensure you have the funds
Trent Innes, managing director of the online accounting platform Xero Australia, recommends you have the right amount of money in your account at exactly the right time for your growth plans. If funding is required to support the expansion, determine where that will come from.
Business broker Simon Winter, of Raine & Horne Business Sales, says: “The only accurate measurement of performance is the profit-andloss report. Therefore, never surrender profit for the sake of growth. If you do, often the faster you grow the quicker you fail.”
3 Keep costs under control
The secret to success in almost any small business is the ability to manage performance by minimising its operating costs, says Winter. “The only factor truly within your control are your operating costs such as employees, insurances, marketing and so on, as the market largely controls your income.” Therefore, at every point in the development of your business control your costs rigidly regardless of the size of your profit. “If you can manage your operating costs, your growth will fund itself, and you will never have to think about when the right time is to expand because you will be expanding all the time,” he says.
At the same time, you need to be careful that your current business model will adapt to hiring staff. Winter recommends that you ensure your fees will support and sustain growth.
The Australian pet industry is estimated to be worth $8 billion annually, according to Animal Medicines Australia.
4 Find a mentor who can help
Every business owner has strengths and weaknesses. “Knowing the areas where you need support can be more valuable to your business than understanding your strengths,” says Trent Innes. “Working with a mentor such as your accountant or a business coach can help you negotiate the hurdles of an expansion, strengthen your skills and expand your financial knowledge.”
If you’re not confident about expanding your business right now, don’t rush. Plan for gradual growth with some input from your mentors. Try to build your customer base, profits, and systems in harmony to ensure that you’re ready when you push the button on expansion.