My Venture
Badman Enterprises is my home services company. We specialize in providing services to people while they go on vacation. This includes services such as pet care, lawn care, security check ins, and any other needs that may arise as customer require. It is a very personalization-heavy company.
Industries
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Badman Enterprises finds itself in an awkward situation where a typical industry analysis probably isn’t enough to highlight the competitive landscape of what we are trying to accomplish. As with many start-ups, we fall in an awkward and undefined category. Part of the market we are trying to capture is the pet grooming and boarding market – we would like people to leave their pets at home and let us take care of them. There is currently a market for this. It is included (on IBISWorld) in the ‘Dog Walking Services’ industry. We may also be looking for a small portion of the Landscaping Services industry. That industry includes such things as General Lawn Maintenance (ie water flowers for a week) and Lawn Mowing. As a result of the varied services we provide, I will attempt to construct an industry analysis that tackles all three of these different industries in a cohesive manner that showcases what we can expect as a young company.
Target Market
Amazingly, IBISWorld only lists consumers as demand drivers for both pet grooming and boarding (PGB) as well as dog walking services (DWS). So our company is necessarily based on a B2C model, except in one notable situation. In the landscaping services industry, there are many demand drivers, including property management (IBISWorld). A potential future opportunity for us is in deals with homeowners associations and property managers to allow people to get away from home as part of their renting agreement. For the most part, though, this is still a consumer demanding the product, even if there is a small business purchasing from us.
Again, for both PGB and DWS the key economic factors look pretty similar according to IBISWorld. The number of pets, per capita disposable income, number of households, and national unemployment rate are drivers of the demand from consumers. It is harder to tell what economic factors would drive growth for Badman Enterprises in the Landscaping Services industry because most of the activities of that industry rely on other, larger companies to contract large projects. We aren’t looking for the large projects in that industry, so we’ll focus on the key drivers from the other industries, because per capita income and number of households are also significant for lawn mowing services (IBISWorld).
‘The Dog Walking Services industry is highly localized and fragmented, with small operators making up the vast majority of establishments. Many players operate as nonemployers. Further, many operators in the industry are individuals that conduct their entire business alone, including organizational and administrative tasks and walking the dogs themselves. Most businesses therefore operate in confined, local markets and cater to dog owners in a given town, city or neighborhood. Therefore, the spread of industry establishments closely mirrors the spread of the population of the United States.’ (IBISWorld) Despite its jargon, the message behind this excerpt from IBISWorld is clear. My competitors are doing the exact same thing I am doing.
With 143,133 companies doing what I am doing, the market is extremely fractured. There is plenty of space for a well-organized major player to break through and consolidate this $1.7 Billion industry. For this math, I took 7.7% of the $8.2B PGB industry and added it to the $1B DWS industry (IBISWorld). See images below for information about the age of consumers in the industry as well as the growth of the number of pets and per capita disposable income in the US. The driving economic factors in my industry are all on the up-and-up (IBISWorld).
This industry is poised for major growth across the US. Most companies are based in California, the northeast, or southwest (IBISWorld). I am entering a more competitive landscape in terms of density of competitors, but that just means there are more small-scale operators I can buy out in the short run.
Over the past five years, this industry has increased in size dramatically. The profit has remained about the same – approximately 17% – but that is substantially higher than the cross-industry average of about 10%. It is estimated that this industry will reach $1.9B by 2023. There is substantial growth forecasted for this industry (IBISWorld).
Competitive Environment
Some of my competitive information ended up above, but that was to help give an overview of the market (concentrations of companies geographically and estimated growth).
There are three ‘major’ players in this industry, but they all make up less than 1% of the total market. In Berkeley, CA, Fetch! Pet Care Inc made $2.1M in 2015. In New York City, Swifto Inc made $1.2M in 2017. In Chicago, Chicago Dog Walker made about $675,000 in 2017 (IBISWorld). All three companies are pretty similar to what I want to do with Badman Enterprises. They offer brand recognition and reliability for pet-care services. They are all also in local markets. Swifto Inc has many technological solutions that are out of my range for now, but if I can start making sales, I will be able to bring in some technological experts to help elevate my company. All three of these companies have huge growth rates. They have been around for a couple years, so I am not the first mover nationally, but I could be the first mover in the Philadelphia market.
Interestingly, I also found out by looking into Swifto’s pricing that I can be charging much more than I thought for my services (Swifto).
After examining Fetch! and Swifto, I am confident that I can compete with them. They offer the same services I do, but they market them differently. This industry has high marketing costs, and I definitely need to get my website up and running as well as theirs. I think I have a much more tenable marketing approach than they do. I am using the ethos appeal of vacation to try to sell my services, and they are relying on pets to sell the products themselves. I think the value I offer is much higher than Swifto and Fetch! because I do more than just play with a cat or walk a dog – I offer to fill any needs while a vacation is happening.
There are minimal barriers to entry in this industry – as long as I can find labor, I can enter the market. The laws and regulations are also almost non-existent. Some municipalities have recently passed regulations about the number of dogs you are allowed to walk at a time, but that applies as much to individual pet owners as it does to a company like Badman Enterprises. A key industry benchmark seems to be Wages/Revenue. That number is currently sitting at about 57%, but if I can do it slightly better than my competitors, I have quite a bit of money to make. The average number of employees per establishment is 1.0, which means even the three major players in the market don’t employee enough people to offset the individual operators who make up most of the market (IBISWorld).
References:
Curran, Jack. ‘Pet Grooming & Boarding in the US Industry Report.’ IBISWorld. August 2018. Accessed November 2018. https://clients1.ibisworld.com/reports/us/industry/default.aspx?entid=1735
Peters, Iris. ‘Dog Walking Services in the US Industry Report.’ IBISWorld. September 2017. Accessed November 2018.
https://clients1.ibisworld.com/reports/us/industry/default.aspx?entid=4350
Amir, Anna. ‘Landscaping Services in the US Industry Report.’ IBISWorld. November 2018. Accessed November 2018.
https://clients1.ibisworld.com/reports/us/industry/default.aspx?entid=1497
SWIFTO INC. “Dog Walking/Visit Rates.” Swifto | NYC Dog Walking with GPS Tracking, 8 May 2018, swifto.com/pricing.
FETCH! PET CARE. “Fetch! Pet Care Dog Walking, Pet Sitting, Cat Visits, Boarding.” Fetch! Pet Care Carmel-Westfield-Zionsville, 2018, www.fetchpetcare.com/.
