5 LESSONS FROM COVID-19 TO IMPROVE YOUR BUSINESS

FIVE LESSONS FROM COVID-19

Wow, how the world has changed in the last 2 months! At a time when you were looking forward to the ‘money making’ season starting with Spring Break and extending through school summer vacations, COVID-19 virus swept across the globe bringing business to a screeching halt. First the cancellation calls, then shutdowns (some mandatory, some voluntary) and fear of catching this deadly disease.

Then we realized that this will take longer than anticipated and concerns of business viability and personal finances added to the already stressed situation.

We were all caught off guard and for the first time ever in the history of the pet care industry, we have been severely affected. As planes ceased to fly, boarding reservations dried up. As people moved to their homes to isolate and work, dogs who normally visit your daycare hunkered down with them.

We are now about 2 months into the crisis and the world is slowly emerging from its shock. You are (hopefully) getting calls again for long weekend stays and daycare dogs are trickling in. You might be wondering how the recovery will look like and what lays ahead. Our firm has the unique advantage that we have clients across the nation and between what they report to us, and what we have learned on our webinars attended by hundreds of facility owners, we have learned the following 5 lessons COVID-19 has taught the pet care industry.

1. Cash is King. Regardless of where your facility is, what services you provide or what size your business is, it takes cash to survive this crisis. Operators who had access to a solid amount of working capital (cash), are in a more secure position to weather this storm. Historically, the industry has not worried about understanding ‘working capital’ needs, how to create detailed financial plans extending into the future or how to keep accurate books so you can measure profitability and cash flow. This crisis has made it very clear how important it is to keep your ‘financial house’ in order to plan for the future and how much cash it will take just to survive.

Takeaways:

• Secure cash from personal funds, government loans, HELOC, etc. • Have a solid plan for repayment and don’t extend yourself too thin. • Try to secure forbearance from your landlord, if you are in a leased space. • Ask for payment deferral on all loans, including personal mortgages. • Clean up your bookkeeping so you can run simple reports that answer questions

based on which you can plan for the future, especially in times of crisis.

2. Lodging is 100% travel dependent.

You probably always knew this, but this pandemic has really driven the point home. Overnight boarding experienced the most severe loss in revenue with most facilities reporting losses of more than 95% over 2019. The travel economy is down 84% from last year’s levels (through May 23, 2020) and consumer polls show a slow recovery for flight related trips until later 2021. As predicted, this will be the summer of road tripping. Road travel saw an increase of 24% through Memorial Day weekend over the previous 7 days. Every travel polls shows ‘road trip’, ‘staycation’ and visiting National Parks or friends/family being top travel destinations for consumers. The good news is, 58% of travelers are reporting plans to travel in the third quarter of 2020 (July-Sept) so you should see an uptick in boarding reservations later this summer.

Takeaways:

• Study the travel industry and specifically its affect on your state/area. Great place to start is to sign up for a weekly newsletter from the U.S. Travel Association, the information is invaluable and will assist you in budgeting lodging revenues. Arrivalist.com shows you daily data on consumer road trips; it has several data points and can be viewed by the state. Both sites are packed full of relevant data for pet care facilities and are free to access. • Create and market lodging packages geared toward weekend trippers. • Maximize your revenues from each stay by offering a myriad of add-on services to any size, shape, energy level and age of dog. Have a menu! • If your business offers only boarding services, it’s time to reconsider that model. This pandemic has shown having all your eggs in the boarding basket is dangerous and these facilities will have a harder, longer road to recovery.

3. Consumers will leave the safety of their home to have their pet

groomed. Grooming appointments have exploded across the country and most facilities report more demand than what they can supply. In some states standalone groomers were mandated to shut down (or box store stopped grooming) while multi service facilities were allowed to operate. Consumers’ loyalty to their groomer waned as time went on and they were willing to book anywhere just to get Scruffy cleaned up. Now single grooming salons are not able to satisfy the demand so facilities continue to receive new grooming client calls. Facilities that are

able to book clients ‘in their time of need’, and provide good service, are in an excellent position to expand their client base and cross sell other services.

Takeaways:

• If you don’t currently offer grooming, consider adding this service. However, question the traditional ‘commission based’, key person dependent model and seek out an industry professional who can teach you how to add a grooming service that is both profitable and not groomer dependent. • If you offer grooming but it’s based on the model above, consider a more modern approach that also increases business profits and value. • Create a menu of add-on services for grooming expanding from day stay programs to specialized pedicures, facials, etc. Think ‘whole dog’!

4. Dog Training demand continues to

expand: As pet parents are spending more time at home or become remote workers, a well behaved dog becomes important. Facilities that offer dog training services (NOT including classes) did not see cancellations and calls for training increased.

Takeaways:

Same advice as for Grooming. Consider adding facility based, profitable, non key person dependent training program. Seek out an expert consultant, it is well worth the investment.

5. Recovery will be geographic:

The devastation of COVID-19 has shown to be geographic and so will be the recovery. Recovery is locally affected by a state’s ability to safely open businesses, how psychologically scarred its residents are and nationally, by the arrival of treatment and vaccine.

Takeaways:

• Understand the virus’ impact on your community; how travel patterns are developing, are companies switching to a permanently remote workforce, are schools opening, are your clients requesting more ‘contactless’ service, etc. This knowledge guides you in re-correcting your business plan to best operate, and thrive, in the post COVID-19 world. • Plan for another outbreak. While none of us want to consider this a reality, it is a possibility and the better prepared you are, based on what happened in your community, the more successful you will be in managing it. Create a Crisis Management Plan that considers everything from financial to HR to operational so next time around, you won’t be caught off guard.

The coronavirus has wreaked havoc on our industry where everybody was enjoying the ‘easy life’; consumers spending on their pets was at an all-time high, facilities were expanding and complaining about not having enough employees to fuel the growth. However, as with every crisis, we have a choice to either fold up and go home, or take the lessons, implement changes and become stronger. No matter how the lessons are learned, the important thing is that they are learned.

I encourage all of you to focus on the future, plan meticulously through 2021 and improve your businesses regardless of the catalyst.

“WOW” your customers, grow your business!

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