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Watch This Video Before Starting Your Dog Grooming Business Plan PDF!

Checklist for Starting a Dog Grooming Business: Essential Ingredients for Success

If you are thinking about going into business, it is imperative that you watch this video first! it will take you by the hand and walk you through each and every phase of starting a business. It features all the essential aspects you must consider BEFORE you start a Dog Grooming business. This will allow you to predict problems before they happen and keep you from losing your shirt on dog business ideas. Ignore it at your own peril!

For more insightful videos visit our Small Business and Management Skills YouTube Chanel.

Here’s Your Free Dog Grooming Business Plan DOC

This is a high quality, full blown business plan template complete with detailed instructions and all related spreadsheets. You can download it to your PC and easily prepare a professional business plan for your Dog Grooming business.
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Free Book for You: How to Start a Business from Scratch (PDF)

A Step by Step Guide to Starting a Small Business
This is a practical manual in a PDF format, that will walk you step by step through all the essential phases of starting your Dog Grooming business. The book is packed with guides, worksheets and checklists. These strategies are absolutely crucial to your business' success yet are simple and easy to apply.

Copy the following link to your browser and save the file to your PC:

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Calculating the Overhead Cost

In determining the total overhead cost, a business should not depend solely on last year's income statement. Due to inflation and business growth, last year's overhead costs do not accurately reflect today's overhead cost. The best approach is to project the overhead costs for the near future, that is, the anticipated overhead expenses for the next six months to one year. The projected overhead cost will reflect additional administrative salaries, the depreciation of new equipment that the business plans to purchase, rent increases, energy cost increases, etc. Table 2 shows projected overhead expenses for a business, ABC Repair Company.

The payroll taxes included in the projected overhead expenses for the service business are only those paid on executive and office salaries. The direct labor payroll, taxes, holiday pay, vacation pay etc., are included in the direct labor cost shown in Table 1.

ABC Repair Company

To ensure that all overhead costs are included, it is best to project the overhead costs for a full fiscal year. This aids in the treatment of expenses that occur only once each year, such as business licenses.

Cost Calculation Example

Perhaps the most common type of service business is the repair business. The cost calculation procedure illustrated here for the repair business can be used for other types of service businesses. The only precaution that needs to be taken is that the appropriate overhead rate formula which reflects the business's operation, as discussed above, be used in the calculation.

It has been estimated, based upon previous experience, that a specific repair job will require $20 of parts and 2 hours of labor by an employee whose labor cost is $5.00 per hour. (These estimates will be used throughout this Guide.) As discussed earlier, the total cost of producing any service is composed of: 1) the material cost, 2) the labor cost, and 3) the overhead cost.

To determine the material cost (the cost of the parts), check the cost of the part in your inventory or get a price quote from your parts suppliers. A parts wholesaler is the source of the $20 material cost in this example.

To determine the total direct labor cost, the number of hours of direct labor used is multiplied by the actual direct labor cost per hour. An employee whose actual direct labor cost is $5.00 per hour, including payroll taxes and fringe benefits (see Table 1), requires two hours to complete the repair job.

Labor Cost = Direct Labor Cost per Hour x Hours Required

Labor Cost = $5.00 per Hour x 2 Hours

Labor Cost = $10.00

The projected overhead expenses were projected to be $100,000 per year, as shown in Table 2. The nature of the repair business is that overhead costs are most directly related to direct labor costs than to direct material costs. The total projected direct labor cost including payroll taxes and fringe benefits was determined to be $50,003.20 (see Table 1). The formula selected to determine the overhead rate bases upon the direct labor cost is:

(1) Overhead Rate =

Total Overhead Cost
_______________________
Total Direct Labor Cost:

$100,000 : $50,003.20 = 2.00

In most small to medium businesses, the overhead rate is between one and two (i.e., between 100% and 200% of the direct labor cost). Businesses that are very labor intensive, such as a janitorial service, will have an overhead rate much less that 100%

To determine the overhead cost allocated to a specific job, the labor cost is multiplied by the overhead rate as shown below.

(1) Overhead Cost = Direct Labor Cost x Overhead Rate

$10.00 x 2.00 = $20.00

To determine the total cost of the repair job, the material cost, the direct labor cost, and the overhead cost are added together:

Material Cost....... 20.00

Direct Labor Cost...10.00

Overhead Cost.......20.00
..........................______
.................. Total 50.00

How to Set Prices

Calculate the profit and add it to the total cost to get the price to charge for the service, in this case a repair job. Prices charged by competitors (similar service businesses), economic conditions of supply and demand, and legal, political, and consumer pressures all influence the profit you can expect for your service and hence the price you can charge for your jobs. Inflation, the amount of business you have (i.e., number of jobs), and your productivity (the efficiency and quality of your business and service) also all effect your profit and the way you figure your prices. You can choose from several pricing methods. Common business practice is to express profit as a percentage of the base used for pricing calculations no matter which pricing method you use.

Set Prices Alternatives

In considering the total cost of the repair job discussed above, the material cost can normally be predicted with a high degree of accuracy. Labor and overhead costs cannot be predicted with such a high degree of accuracy. An employee may not feel well on a given day. Or there may be an equipment breakdown. Either will result in higher than expected labor costs. A provision to adjust for fluctuating labor and overhead costs can be established through your approach to profit. The profit can be applied to the three costs independently, allowing for variations in labor and overhead costs among jobs. For example, a 10% profit on material, a 30% profit on direct labor, and a 30% profit on overhead can be used to determine the price of the service.

The concept of applying a different rate of profit on the three underlying costs ( material, labor, and overhead) is one method of dealing with the large difference in predictability of costs that exists between labor and materials in most service businesses. To reflect the fluctuations in utilization and cost of labor and overhead from job to job, your profit on labor and overhead should normally be higher than profits on materials.

Direct Cost Pricing

With this method you set your selling price based on direct cost, that is, on direct materials (DM) and direct labor (DL). DM of $20 plus DL of $10 equals Direct Costs of $30. Overhead (OH) costs are $20; so to earn the $11 profit you need, your selling price must be at least $31 above your direct cost to charge; divide direct costs into overhead plus needed profit:

$31 ($11 + $20) : $30 = 103 1/3%

(proof $30 x 103 1/3% = $30 x 1.033 = $11)

In most small businesses, there is not a large amount of overhead cost associated with obtaining parts besides a telephone call to order them. Charging a large amount of overhead to parts may result in pricing yourself out of the market.

By all these methods you are deriving a selling price for your service. Sometimes however you start with the selling price already established - by competition or economic conditions. Then you must figure out the most cost you can incur and still earn your needed profit.

Setting Prices - Summary

The total cost of producing a service is composed of direct material, direct labor, and overhead costs. This cost information is used as a basis for setting prices and profit. From alternative pricing methods you select one that earns a satisfactory profit and is easy for you to use. Given regulations, competition, and the economy, you must have a pricing strategy that keeps your service competitive and profitable. The more exactly you figure your costs and set prices, the greater your chances for continued and profitable business.

 

 

If you manage a factory, wholesale outlet, retail store, Service store, or are a builder, you will need to sell. However good your
product is, regardless of what customers think of it, you must sell to endure.

Direct selling approaches are through personal sales efforts, Advertising and, for many companies, exhibit - including the styling
and packaging of this item - in windows, at the institution, or even both. Establishing a fantastic reputation with the general
public through courtesy and special services is a direct process of selling. While the latter should never be neglected, this
short discussion will be restricted to direct marketing methods.

To establish your business on a business footing requires a Whole Lot Of aggressive personal selling. You may have established
competition to overcome. Or, if your thought is new with little or no competition, you've got the additional difficulty of
convincing people of the value of the new idea. Private selling work is nearly always necessary to accomplish this. If you aren't
a fantastic salesperson, seek a worker or asociate who is.

Another way to create sales is by marketing. This may be done Through papers, shopping papers, the yellow pages section of the
phone directory, along with other printed periodicals; radio and television; handbills, and direct email. The media you choose, in
addition to the message and kind of presentation, will depend upon the specific customers you wish to reach. Plan and prepare
advertisements carefully, or it'll be ineffective. Most media are going to be able to describe the features of their viewers
(readers, listeners, etc.). Since your initial planning described the characteristics of your potential clients, you want to match
these features with the media audience. If you are selling expensive jewelry, don't market in high school newspapers. If you fix
bicycles, you probably should.

Advertising can be quite costly. It is wise to place a limit upon An amount to invest, then remain within that limitation. To help
you in determining how much to spend, study the operating ratios of similar companies. Media advertising salespeople will help you
plan and even prepare advertisements for you. Be sure to tell them your budget limitations.

A third Way of stimulating sales is successful displays both in Your place of business and outside it. If you have had no prior
expertise in display work, you are going to want to examine the topic or turn the job over to somebody else. Watch displays of
other companies and read novels, trade magazines, as well as the literature provided by equipment manufacturers. It could be smart
to hire a screen expert for your opening screen and unique events, or you may obtain the help of one on a part time basis. Much
depends upon your kind of business and what it takes.

The proper number and types of marketing campaign to utilize vary from business to business and from owner to owner. Some
businesses prosper with low-key revenue efforts. Others, like the used-car lots, flourish on aggressive, hoop-la promotions. In
any case, the importance of successful selling can't be over-emphasized.

On the other hand, don't Eliminate sight of your major goal - to Earn a profit. Everyone can produce a large sales volume selling
dollar bills for ninety bucks. But that won't last long. Keep control of your costs, and price your product carefully.

Record Keeping. One essential element of business management is the keeping of adequate records. Study after study indicates that
many manager failures could result from insufficient records or the owner's failure to use what information was available to him.
Without documents, the businessperson can't see in advance which way the business is going. Up-to-date records may forecast
impending disaster, forewarning you to take action to prevent it. While additional work is required to keep an adequate set of
records, you'll be more than paid for the effort and expense.

If you are not prepared to keep adequate records - or have somebody Keep them - you shouldn't attempt to operate a small business.
At a minimum, records are Required to substantiate:

1. Your returns under tax legislation, such as income tax and social Safety legislation;

2. Your request for credit from equipment makers or even a loan From a bank;

3. Your claims about the company, should you wish to sell it.

But most important, you need them to run your business successfully And to raise your profits. Having a decent. Yet easy,
accounting system you may answer these queries as:

How much business am I doing? What are my costs? Which appear to be too large? What is my gross Profit margin? My net profit? How
much am I piling on my charge business? What is the condition of my working capital? How much money do I have available? Just how
much in the bank? How much do I owe my Providers? What is my net worth? That is, What's the worth of my possession of The
business? What are the tendencies in my Receipts, expenses, gains, and net value? Is my financial position improving Or growing
worse? How do my resources compare with what I owe? What's the Percent of return on my investment? How many cents from every
dollar of Sales are net profit? Answer these and other questions by preparing and studying balance sheets and profit-and-loss
statements. To do this, it's Important that you record information about transactions as they happen. Keep This information in a
comprehensive and orderly manner and you will have the ability to answer the above questions. You'll Also possess the answers to
these other vital questions About your company as: What products or services do my clients enjoy best? Next best? Not at all? Can
I carry the merchandise most frequently requested? Am I Qualified to render the services that they need most? Just how a Lot of my
charge Clients are slow payers? Shall I switch to cash only, or use a charge card Charge plan?

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