Final Plan Submission

Scruffy’s

Joe Strother

Valari Beach

Cassie Miller

Jenny Combs

Rayan Alzamil

Business Administration 101

Section 008

November 24, 2009

Key Strategic Concept/ Overall Strategic Concept

As a multi-service doggie daycare located near Portland, Scruffy’s will deliver top-notch daycare, grooming, boarding, and special events to dog owners and their furry friends. Scruffy’s will cater to dog owning professionals with higher disposable incomes who want to provide top quality care for their canine companions in a playful and stimulating environment while they are away at work. Our employees will treat our customer’s dogs with the love & respect they would expect to receive at home. We will create an atmosphere that is at once homey and professional. We intend to market ourselves with a visually appealing logo and memorable name that communicates our values and speaks to who we are and what we do in an easily identifiable way.

At Scruffy’s, our main target market will be higher median income households within 5 miles of Scruffy’s. Our intention is to open our first location in an affluent suburb of Portland where there are fewer dog care centers relative to the number available in the Portland Metro area. We will establish ourselves in a high-traffic, high-visibility area conveniently located along well-traveled commutes. Combining timesaving convenience factors with high-end care in a warm and attentive atmosphere is our goal. Our competitive advantage will include the convenience of one-stop shopping and the high standard of quality found in our professional staff and exceptional product selection.

As a company, we believe that convenience is one of the top characteristics customers look for in a business, second only to quality. Scruffy’s is conveniently located within a short driving distance of densely populated areas of the Portland-metro region. Knowing that Americans spend $40 billion a year on their pets, we are sure that by having an edge over the competition, we will convince dog-owners to bring their dogs to Scruffy’s. By enticing dog-owners with our superior services, products, and activities, we will bring in and secure life-long customers.

Executive Summary

The owners of Scruffy’s believe doggie daycares to be an incredibly lucrative business venture, and are sure that they can provide a service that will satisfy the needs of pet owners. The guiding principle behind a successful dog day care is to provide a safe, attentive, stimulating environment with lots of interaction with other dogs and people. When given multiple options for care, we expect that pet owners will decide on a location that is also both convenient and charming. Scruffy’s possesses these characteristics by offering the following: experienced employees, a central location, and a place that feels like home for the dogs and their owners. Whether the owner is in need of a daycare because of work, school, or vacation, they are still in need. Scruffy’s exists to provide a solution to the issue of finding a reputable location as well as to meet the customer’s demand for convenience and top quality service.

Seeing as how there is a need for quality doggie daycares, we at Scruffy’s believe that this business venture is highly attractive to investors, and others who would benefit from the start-up of this business through the unique and innovative nature of Scruffy’s. The owners have realistic expectations of profit and debt that the business will incur in the first few years, but they also believe that such a lucrative venture will break-even fairly quickly.

Both owners have a strong background running and managing a business and are extensively well qualified to care for dogs and operate a facility dedicated to that purpose. We have what it takes to make sure Scruffy’s is as profitable as possible. The owners would like to have a generous amount of involvement in the community to secure customers, create buzz about the establishment, and to gain a reputable name in the community as not only a fantastic doggie daycare location, but also as a company who cares about the community they serve.

Critical Events and Milestones Graphic (Attached as Appendix A)

Organizational Issues

The name Scruffy’s was chosen because it is a quintessential dog name. The name evokes a certain warmth and familiarity as well as suggesting a family style environment. These are the traits we want our customers to identify with Scruffy’s.

Organizational Form

Scruffy’s organizational form will be a two member Limited Liability Corporation (LLC). We choose to be an LLC because it will provide personal liability protection for member and owners of Scruffy’s. The LLC has more flexibility for the owners than a corporation. The owners wish to maintain control over the direction and decision making of the business. The LLC form will allow for more space in terms of managing the business. We as members/owners of Scruffy’s are protected from liability for acts and debts of the LLC so there are no personal liabilities incurred by the members. At the same time by choosing an LLC we will avoid the excessive paperwork and initial outlay of money associated with forming a corporation. Moreover, with an LLC we are looking after Scruffy’s current and future investors by avoiding double taxation. The LLC will allow for pass-through taxation, as the owners will be taxed only on the income reported on their 1040 personal tax forms. Eventually, after building a strong customer base at our first location and establishing name recognition, we intend to open multiple locations in the state, primarily in the Portland Metro and surrounding areas.

Benefits:

Portland is an extremely dog-friendly city, with the highest amount of dog parks per resident.
Portland is a rather work-oriented city; therefore many residents in the metro area and suburbs commute to work in the city. A doggie day care such as Scruffy’s will save people the hassle of finding a care center which is conveniently located, as well as a location they would feel comfortable taking their beloved dog to.
Scruffy’s will provide services which many care centers do not, including parties, social

events as well as overnight boarding.

The Pet Industry is an enormously successful market. American’s spend $40 billion a year on their pets.

Disadvantages:

Because Portland is such a dog-friendly city, many others have tapped into the Pet

Services Industry and have successful businesses in the industry.

In order to accommodate dogs of all sizes and activity levels, Scruffy’s will need a large enough area for the dogs to run and play. Because of this need, rent will be higher.

Highly competitive market. With so many care centers around, we need to set ourselves apart.

As an LLC, our growth will be limited to the State of Oregon.

Mission Statement

“Scruffy’s will love and respect every dog as a member of our family. We will provide warmth and affection in a playful and stimulating environment. We will provide the highest quality services and always strive for absolute customer satisfaction. Our company will demonstrate our commitment to the happiness and well being of all dogs with wholehearted involvement in the charitable sector. Scruffy’s will become the first name that comes to mind when you think “doggie daycare.”

Scruffy’s…where every dog has its day.

Objectives
Our primary objective at Scruffy’s is to create a truly enjoyable experience for Portland-area dog owners. This includes providing a safe and secure establishment, as well as top-quality services and products.

MANAGEMENT TEAM

Our management team will consist of the owners/members of Scruffy’s, Joe Strother and Valari Beach, acting as Managers/Directors overseeing all operations of the business and managing the activities of the three additional employees. The experience of each member of the management team and employees is as follows:

Joe Strother

Joe has a BA in Business Administration from PSU.
Joe holds a CPDT-KA Certification from the Certification Council for Professional Dog Trainers as well as certificates in three areas of Positive Reinforcement dog training.
A life-long lover of dogs, Joe has spent five years volunteering with Oregon Humane Society and nearly every major dog rescue and animal shelter in the Portland area.
Joe was a manager and dog trainer for three years with “K-9 Companions,” a companion-dog training facility providing service animals to people with disabilities.
As manager with “K-9 Companions,” Joe established a chapter of “K-9 Companions” in Eugene, OR and became Managing Director of the organization for one year. Under Joe’s direction, the company expanded to Bend and Ashland.

Valari Beach

Valari has a BS in Business Administration from PSU.
Valari was co-owner of Vivace Creperie & Coffee House in NW Portland for 4 1/2 years. Along with business partner, made all decisions regarding financial operations, procedures, policies and overall direction of business. The business was very successful and Valari sold her share of the business to her business partner in order to pursue her desire to own a business catering to dog owners.
Valari is also a pet-enthusiast and worked for 5 years as a Veterinary Technician in Los Angeles.
While working for The Culver City Vet Clinic in L.A., Valari also worked as an animal handler in the Film/Television Industry. Valari specifically assisted with dogs and wolf hybrids for prestigious animal trainers in Southern California.

EMPLOYEES

Cassie Miller

Holds a National Dog Groomer’s Association of America Certification in breed specific grooming techniques.
Cassie is a second generation Bichon Frise dog breeder/owner and has participated in national Shows for her family’s Bichon Frises.
Having grown up around dogs her whole life, Cassie has experience with many breeds and sizes of dogs.
Cassie also volunteered at Jewish Family Services in Seattle for a school year, Hopkins Elementary School in Sherwood, OR for 10 years, and Sherwood High School for 4 years. Through volunteering, Cassie has a lot of experience in working with the community.
As a sales associate at Sleighbells Christmas Shop and Gap, Cassie has experience in inventory, sales, and register.

Rayan Alzamil

Rayan worked for Petco for 2 years and Broadway Pets for a year and a half.
Rayan has volunteered for OHS for the last two years and has fostered 4 OHS Special needs dogs for the last six months.
Rayan has experience in Excel, dealing with financial situations for a local bookstore.
Rayan also has experience as a cashier at a supermarket. Through this, Rayan has experience in dealing with the community, as well as performing repetitive tasks.
Rayan is also bilingual, speaking both English and Arabic.

Jenny Combs

Jenny has been a professional dog-sitter and walker for the past 5 years. She has handled many breeds and sizes of dogs.
Jenny also is an employee at a high-end grocery store that carries gourmet dog products.
Jenny worked for “3 Dog” Bakery for 2 years, a bakery specializing in dog treats.

Business Management Plan

Organizational Structure and Plan (Also see Appendix B)

Scruffy’s will employ a “flat” organizational structure and all operational decision making will occur on-site between owner/managers and employees. The owners will institute an open flow of communication with employees allowing for direct input in both directions. The owners will create an atmosphere where the employees feel recognized for their contribution to the business as well as valued for their input and appropriate suggestions. Employees will be encouraged to bring their own dogs to day care for free supporting the “home away from home” environment that Scruffy’s promotes. We endeavor to retain our valuable employees in part with an environment that fosters a desire to be responsible, affable and part of a team or better yet a “family.”

Governance Policies and Assurances

Scruffy’s, LLC will be run exclusively by its two owners/members and each owner controls fifty percent of the company. All major strategic issues are made in accordance with the LLC’s Operating Agreement that spells out the financial and management rights and responsibilities of the LLC members, such as: who contributes what if the LLC needs additional capital, when and how profits from the business will be distributed, under what terms members can leave the LLC, etc. At this juncture all decisions and assurance of receiving profit and collateralizing debt are to be transacted equally 50/50 by both members.

Key Advisors and Supportive Services

We will use the outside services of an attorney on an as need basis. The attorney will be retained to act as “Agent of Record” for business reporting purposes. The attorney will also help draft the Operating Agreement between the two owners as well as drafting any other necessary documents. We will consult with the attorney when we are required to enter into any legal agreements such as lease on commercial property or dealing with any issues of liability. The owners will not hesitate to employ the use of the attorney to act on behalf of the interests of the owners when any questionable situation arises.

We will also use the services of an outside CPA or Accounting firm to prepare yearly taxes based on the bookkeeping records prepared by the owners using QuickBooks Pro accounting software. We will also use the accountant on a monthly basis to assist in clearing out the previous month’s recording of all activities, reconciling accounts, generating an accurate Profit & Loss Statement as well as acting as an unbiased auditor of accounting practices and record keeping.

We will use the services of a payroll company such as ADP. These services are relatively inexpensive charging a low base fee plus an amount per employee for under $60 per month. The payroll company will report taxes, pay taxes that are withheld to the proper authority Fed. State. etc as well as compute and deduct taxes from each employee’s earnings and print the checks and deliver to business. The efficiency and time saving benefits are substantial.

We will use a Merchant Services company in order to accept credit cards at our location. We will look for the company with the lowest rates and best turn around, with funds available in our business account within 2 business days.

We may also explore the services of a web developer as our requirements for operating an extensive website with many features may necessitate the use of an experienced technician to assess our need and get our site up and running. At that point we hope to be able to maintain our site in house.

Organizational Responsibility

Scruffy’s goal of attaining a high community profile will come in part from being very active in the charitable and non-profit sector. Our love of animals and deep concern for their well being makes it imperative that we look for every available avenue for making a contribution of time, service, support or fundraising action to organizations assisting animals. Scruffy”s will be an active member of the fundraising community for organizations like The Oregon Humane Society. Scruffy’s will also take part in fostering animals as well as hosting and promoting adoption fairs. We hope to act as a mediator between those who want to give, such as the more affluent members of the community that frequent our business, and those with need in the pet community. We want to make a difference in the lives of animals in need and in the organizations that are serving those needs.

We will sustain our commitment to be involved and make ongoing positive contributions by planning in advance to take part in as many charitable activities as possible as well as hosting monthly activities in house that give to a particular organization. We would look for an opportunity to have an ongoing benefit such as giving proceeds of sales from a particular item to an organization. In the process of being proactive in the charitable sector, we will be establishing a reputation of giving back while etching our business, logo, and name into the minds of the pet/dog owning public. We want our name everywhere possible and if in the process of doing so we can have a positive impact on the community at large, all the better!

Production Process and Operations

A doggie day care needs a lot of room. We estimate the square footage needs for our operations to be a minimum of 3000 interior square feet and minimum of 1500 exterior square feet. The lion’s share of the space will be dedicated to the play areas for the dogs. We will also require space for overnight boarding, u-wash and grooming, employee work areas, office space, retail, storage and cleaning areas. We will partition our indoor playroom into an area for big dogs and an area for small dogs and low energy dogs. We will also reserve a small area for dogs that need to be separated for behavior reasons, a time-out area.

The current commercial lease space market is very soft. We anticipate being able to find a larger “warehouse” like facility in a high traffic, high-visibility area for reasonable lease terms. The current market in our targeted areas suggests a rental rate of approximately $5000 - $6000 per month. Improvements will be necessary but should be minimal. The play space should be open and contained with very little other basic requirements. The space will be properly ventilated, heated and cooled to keep the dogs and humans at a comfortable temperature. The flooring should be a hard, easy to clean surface such as concrete, which is typical for warehouse structures. Conversion to a dog care operation in this type of space is functionally appropriate. Our location and space issues are specific and the success of the business depends greatly on the convenience of the location. The location must also provide for easy pick-up and drop-off of dogs and ideally would have a minimum of 4 parking spaces adjacent to building. We will need to make sure we have adequate time to search for a space meeting the basic requirements above. We anticipate beginning our search as much as six months in advance of our targeted opening date. Since it is more of a renter’s market we feel confident in negotiating a lease that makes allowances for reserving the property in advance of taking possession.