Even in the sluggish economy, my business has grown by leaps and bounds this month. It has increased about 50% over the last month. Winter in the dog grooming business is always a difficult time and for a new business, it is deathly slow. There were too many months when I did not have enough money to meet the expenses of the business, much less my own. Slow enough that I have considered giving up and getting a job.
I am happy to say that the phone has been ringing and my net income this month looks pretty good. I am, however, faced with a new decision. My shop right now is tucked away in a residential area. The prior owners converted a building in their backyard into the grooming shop. It is not a high traffic area and one of my struggles has been to let people know that we exist.
Last week I got an offer to rent a larger shop in a commercial location. It is on one of the two main streets in town and the building is brand new. Normally, I would not consider moving as the build out costs for a new shop would be more than I could afford but this particular shop was designed for a hair salon and so the plumbing and electric outlets are already there and set up perfectly so the move in costs will be very low. The owner of the unit is offering it to me at a bargain price because the prior tenant defaulted.
The rent for my current shop is low and includes all of the utilities which has been a saving grace through the winter. The rent for the new location is comparable but does not include utilities which will run about $200 more than I am paying now. It’s decision time again.
I have pondered the pros and cons of this over the last week. It was not too long ago, only last month in fact that I was looking for a job. This has weighed heavily on my mind as I consider moving. However, I really feel that the additional exposure will help the business grow. The location moves the business from looking like a hobby (which is what it was before I bought it) to a much more professional appearance.
My long term plan was that when my net income from the business had doubled, I was going to look for a new location. This opportunity is about 6- 12 months ahead of schedule at my current rate of growth and will mean struggling financially for a bit longer but it will also give me room to expand both my grooming services and my retail business.
The state of our economy does not help my decision at all. I would feel much better about this if we were not teetering on the brink of recession, however, in some ways rising fuel costs may be a benefit. People who have not thought twice about driving to the city for services are now looking for local solutions. Even though they may be happy with their current groomer, they are considering switching just so they don’t have to pay the extra $15-20 in gas to drive.
I would also feel better about this if I had twice my current amount in my emergency fund. It is hovering right at $1000 and right now, I have been able to add to that every month. Increasing my business expenses will mean a reduction in the amount I can save.
What it all boils down to is that the ONLY con is increasing my expenses by $200 a month and the risk that if my business doesn’t continue to grow, I won’t be able to go back. The pros are that I will have a larger, more convenient, more professional location with increased exposure. I can slowly increase my retail line and that should provide some additonal income. The shop comes with high speed internet included at no charge and will eventually have satellite television as well. There is room inside to do small training classes if I decide to start them again for the additional income. On a more personal level, I will have a bathroom onsite (I currently use the bathroom at the prior owners, a minor inconvenience) as well as a kitchen.
I guess it comes down to a decision on whether or not I am able to live with the risk and additional pressure for awhile longer. Can I continue to scrimp and save for another year or do I take the easier way out? There is no doubt in my mind that the business will be a successful if I stick with it and can make it through the next year.
Late Night Update: My shop is in a small town. Apparently word has leaked out that I am moving and people have been stopping me on the street to tell me how excited they are that there will be a grooming shop in town. I have been carefully explaining that the shop is currently open and only a block away. I think it is going to generate quite a bit of business if the first few days is any indication. I went on a frugal shopping expedition on my way to training tonight and bought 3 kitchen base unit cabinets for the new shop. My final cost for 3 36′ base cabinets with a drawer? $250 for all three. I love builder’s salvage! Now I am hunting a counter top.
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Very exciting. Your life is rich with change!
I think moving to the new shop would be a good choice. Location is so important. And your business is already growing. I think it will grow more if you are in a better location.
Moving sounds like a good idea. Maybe you can take on a part-time groomer to help offset the expenses? IE you get a cut of the grooming they do.
sounds like things are getting better every day!
Here is a tidbit I heard recently from my cousin the vet that may help you in making your decision. We were at a family party recently and talking about the current economy. He told me that his mentor and previous boss always said that in times of economic stress vets always do well, as if folks take a bit better care of their pets because they become entrenched in thier owners sense of well being during hard times. I imagine that it would be similar for groomers and other pet related industry.
As a matter of fact my cousin is looking for a 3rd vet to help him in his clinic with no end in sight to the growth in his own busisness.
Whatever you decide I wish you luck.
Susan
Fox, Change for the good for a change!
Lindsay, I remembered Josh’s post on location and starbucks.
Betty, I have one part time groomer. I get my cut.
She is also the prior owner so she keeps me straight too.
Susan, there is something to that theory I think. I have heard that the pet care industry is pretty recession proof. Go figure. I know that there are an awful lot of customers out buying or adopting new pets. My theory is that they take their minds off their problems. Mine often do.
u just need to have enuff money tucked away so that u can survive until ur business stablizes :/