Why Daycare 2.0 is a Win Financially
The Dog Gurus have known at gut level that the Daycare 2.0 model is better for the dogs and your business. However, as a girl from Missouri with an accounting background it was time we spent time crunching the numbers and showing you the proof. Keep reading to find out what the numbers revealed when we compare expanding capacity with regular daycare versus daycare 2.0.
As we explained in the Implementation Plan for Daycare 2.0 a combination of small groups and individual activities can be accomplished in the existing space of most pet businesses. There is a need to add equipment for rest periods and supplies for activities.
Our financial review and comparison considers two components of expanding regular daycare to add 15 more dogs with and without the daycare 2.0 option:
- Set-up Investment Required
- Ongoing Profit Contribution
Key assumptions used in our models include:
- Daily daycare fee of $25 for regular based on 2014 industry average
- Daily daycare fee of $30 for Daycare 2.0 for individualized services
- An annual membership fee of $100 is paid by Daycare 2.0 dogs to reserve their space
- 15 Daycare 2.0 positions are available 5 days per week with dogs committing to a regular weekly schedule
- 15 regular daycare positions are added with the expansion and replaced by new dogs in the 2.0 model
- Regular daycare expansion costs include addition of rest enclosures and playground equipment and versions with and without space build-out
- Daycare 2.0 expansion costs include equipment and supply investment for individual activities described in the implementation plan and rest periods
- Both models include one new staff member daily and 14 start-up dedicated training days
- Our costs were determined based on quick google searches; you would want to spend more time getting actual quotes from your preferred vendors and update our model with actual numbers
The results supported our gut feeling that Daycare 2.0 is a financial win!
The table below summarizes the results of our models:
| Model | Set-up Investment | Months to Payback | Monthly Profit Contribution | Annual Profit Contribution |
| Regular w/ Space Buildout | $68,286 | 15.3 | $4,470 | $53,640 |
| Regular w/out Space Buildout | $6,270 | 1.4 | $4,470 | $53,640 |
| Daycare 2.0 | $14,216 | 2.2 | $6,445 | $77,340 |
Our models indicate that Daycare 2.0 provides the highest ongoing profit contribution. Even when you consider the equipment investment of close to $15,000 the investment can be paid back in less than 3 months. Expanding without space build-out does have the shortest investment payback, but assumes businesses have excess capacity to fill.
If your business is operating at near capacity in your daycare we think you should consider expanding using the 2.0 model. We’ve included our excel worksheet as a template you can use to forecast specifics related to your business (Daycare 2.0 Financial Analysis).
We love scenarios where the dogs benefit and the business also benefits financially. Dog Daycare 2.0 is a definite winner that just needs courageous business owners to lead the change.
