Selling a Dog Boarding, Daycare or Training Business

Occupancy and the calendar

A buyer starts with how full the place is and when. Boarding has a hard calendar, with holiday weeks and summer travel filling every run and winter weeks leaving half of them empty. Daycare runs on weekdays and fills from the morning drop-off, and a day of full play yards can be followed by a quiet one when the weather turns. A buyer will ask for occupancy by month for several years, along with the number of dogs per day and the revenue per dog. They want to see where the peaks are, how deep the valleys go, and whether the owner has ever been turned away for lack of space.

Capacity sets the ceiling. The number of kennels or suites, the square footage of indoor play space, the size of outdoor yards and the staff ratio all limit how many dogs the business can take. A buyer who sees a business at full capacity on busy weeks may ask about raising rates or adding space. A business that is rarely full gives them a different question, which is why. Pricing is part of this. Boarding rates, daycare packages, add-ons like baths, walks, play sessions or training during a stay, and cancellation policies all show up in the average revenue per dog, and buyers compare them with other facilities in the area.

Repeat clients

The best predictor of next year's revenue is who comes back. Buyers will ask how many clients have used the business more than once, how many have a daycare package or a monthly membership, and how many bookings arrive through the same few customers. The booking software can answer most of this if it holds good records. Our post on recurring revenue explains why buyers pay more for revenue that returns on its own.

Training is different. A training school sells programs, whether puppy classes, obedience, behavior work or board-and-train stays, and the revenue comes from new enrollments more than repeat visits. Buyers will ask where those enrollments come from, whether referrals from veterinarians, rescues and groomers feed the business, and how much of the program depends on a particular trainer. A trainer with a following can carry a school, and the same trainer leaving can empty it. Our post on owner dependency covers how to reduce that risk.

The people who handle the dogs

Handlers are the product. A daycare attendant who can read a group of dogs, break up trouble before it starts and tell an owner what happened at pickup is more valuable than any piece of equipment. Buyers will ask about staff tenure, pay, training, and who is certified in pet first aid, behavior or other credentials. They will ask who opens, who closes, who is on the overnight shift at a boarding facility, and who handles an emergency. Turnover is common in the trade, and a stable team is a selling point.

Safety history gets examined carefully. Buyers will ask about bites, fights, escapes, illness outbreaks and any injuries or deaths, and how each was handled. They will ask about insurance claims. A record of incidents handled quickly, with the owner informed and a veterinarian involved, is better than a record with nothing written down. Temperament testing for new dogs, vaccine requirements and a clear policy on aggressive dogs reassure a buyer.

What makes one business worth more

Businesses that sell well tend to have clean, well-kept facilities with proper drainage, separation between dog groups, good ventilation and secure fencing. They have systems for check-in, feeding, medication and incident reports. The booking and customer software is current and holds every vaccine record. Reviews are steady. The owner is not the only person who can run the place. Lease terms are favorable, and there are no unresolved complaints from neighbors about noise or odor.

Value drops with deferred maintenance, thin staffing, unbooked capacity, poor records and a lease about to end. Noise complaints and zoning questions can reduce a buyer's interest, since a facility that cannot operate where it is has little value. A buyer will ask about the history, and the answer matters.

Records a buyer will ask for

Expect tax returns, monthly profit and loss statements, and reports from the booking system showing dogs per day, revenue by service and active customers. Buyers want vaccine records on file for current clients, incident logs, insurance policies and claims history, staff lists with pay and tenure, and the equipment and fixtures list. Our guide on getting your financials ready explains what clean books look like. Cash is a frequent problem in this trade, since tips, small walk-in payments and package sales sometimes bypass the books. Anything not recorded cannot be counted, and a buyer will not pay for it.

What has to transfer

The facility is the first question. Most kennels and daycares rent, and the landlord must agree to the assignment and, ideally, a lease long enough to support the buyer's financing. Some owners hold the property, and the land and building may be sold or leased with the business. See selling a business with real estate. Licenses, permits and inspections for animal facilities are issued at the local or state level, and some can be transferred while others must be reapplied for. Rules vary by state and your attorney confirms what applies. Zoning and use permits deserve a check, because a use that has been tolerated for years may not carry over to a new owner.

Client lists, booking records and online presence move with the business. Prepaid packages and gift certificates are obligations a buyer will take on, and they should be listed. Franchise or network agreements, if any, may need consent.

What tends to sink a sale

The facility has a zoning or permit problem. The key trainer or manager leaves. A serious incident appears late in diligence. Records are thin. A landlord refuses to extend. Most of this can be found and fixed before a buyer arrives.

How to prepare

Put the vaccine records and incident logs in order. Get the booking system up to date and clean out dead customers. Train a manager to run the day. Look at your permits and talk to your landlord. Run bookings through the system so the numbers support the price you want.

When you are ready, the page on selling a boarding, daycare or training business is a good place to begin. At Business Advisors of America we build the valuation from your numbers, find qualified buyers and keep the sale private until the right time to tell your clients and staff.

This article shares our opinion and general information. It is not legal or tax advice. Always speak with a licensed attorney for legal advice, and a qualified tax professional for tax questions, before you act.