Hanging with Hafen: Do veterinary boarding, grooming and retail right

Not long ago, boarding, grooming, and retail services were touted as the next golden goose combination for veterinary hospitals. Veterinarians jumped onto the bandwagon thinking they were going to make a bundle. Unfortunately, it didn't work out that way. For the most part this idea turned out to be labor intensive and had relatively small economic margins. But that doesn't mean you can't make money by providing services, you just have to be smart about it.

The money in providing these services is in:

• Offering one-stop convenience to your clients so they are more firmly bonded to your practice.

• Encouraging your clients to visit your facility more often, so you can sell them other medical services.

That said, the downside of providing these services is clear:

• Boarding. It costs nearly the same amount per square foot to build a boarding facility as it does a medical facility, but you make more money from medical areas than from boarding.

• Grooming. You only need one word to describe the challenges you face in running a grooming operation: yuck! Even most efficiently run grooming operations are knee deep in flying fur, water, and wet dogs.

• Retail. A majority of practices we work with sell only prescription food, and it doesn't take a lot of space to do this. The real trick for making money on retail is in how fast you turn your inventory. If you can drive down or eliminate the cost of “carry,” which is the time you pay the wholesaler for the food before you actually sell it, then you can make more money.

Let's look at some pictures that illustrate the best that boarding, grooming, and retail services can provide.

The Olde Towne Pet Resort in Washington, D.C., is what you're competing against. This is a two-story 27,000 square foot facility and houses several hundred animals. Unless you have deep pockets you can't hope to build this.

But look at it another way-you don't have to manage it either. Large scale, commercial pet resorts work because they're built and run by people that specialize in boarding animals, not in providing medicine. These facilities have a more streamlined operational model than a typical veterinary hospital and often have less expensive staffing costs too.

The lobby at Olde Towne is just as over the top as the exterior. And it works, given their market segment.

The most successful pet resorts are located in dense suburban or urban upscale centers like inner city San Francisco, Washington, D.C., and New York City where clients are willing to pay $80-plus a night to board their animals. And if you're the client, and you're paying that much money, you expect to a premium experience.

Many upscale pet resorts include a pool for exercise and hydrotherapy. Besides looking great, pools are highly marketable as physical therapy and rehabilitation services are starting to take off.

At Hôpital Vétérinaire Rive-Sud in Québec, Canada, an effective way to push retail sales was to move toward a pet boutique concept. This can work for you, too. This way you're not competing directly with the PetSmarts of the world. You're also capturing the impulse shopper.

To create an effective pet boutique, you need to have enough inventory, good presentation, and a talented buyer that can scope out products to stock.

Another direction you can take in the pet resort market is a more edgy, colorful, urban facility, like Play and Stay More in Brighton, Colo. These “waiting cubes” are adjacent to the reception desk. Besides the waiting cubes being a good place to park dogs while clients are checking out, they're colorful, fun, and engaging.

This picture is from a facility we built years ago in Ohio. It was leading edge at the time. And it's still a functional, straightforward solution, but it's not necessarily sexy. With the stainless steel gates and runs, this is the baseline for what's acceptable for a boarding facility. There's a lot of chain link-fenced runs that exist in some facilities, but these are not facilities that sell well to clients.

Another way to do an upscale run as part of a pet resort is to use a conventional aluminum storefront door and system, essentially the same door and window assembly that is used on the front of a typical retail storefront. These doors and the hardware are made to withstand a lot of use and abuse, and because they're aluminum, they're resistant to water and most cleaning products.

Have fun with the kennels you're building. I'm not sure if dogs appreciate décor, but the client certainly does. I'm a big fan of having windows in runs. It makes for a nicer feeling space, and clients like it.

Based on research in human healthcare, there's a correlation between lower stress, happier patients, and faster patient recuperation when patient rooms have access to natural daylight. This applies to pets, too.

These upscale runs are built with drywall partitions with ceramic tile wainscot. But in this case, the gates to the runs are a combination of stainless steel grating and glass. There are a variety of combinations of stainless steel or even aluminum and glass gates available from manufacturers.

There are real economic returns in building a doggy day care center. All you need is a big room and a bunch of dogs.

In this picture from Olde Towne, you can see a simple room with lots of skylights, windows and even a glass roll-up garage door. We built a covered, open-air play area, too. While we've seen a number of hospitals use an artificial turf solution for the outdoor exercise areas, all you really need is a six-inch layer of pea gravel. It's not as fancy as the artificial turf, but it stays nicer longer.

Create an outdoor play yard that is inviting. It can be as simple as an upscale fence in lieu of chain link, like using glass, panelized swimming pool enclosures to fence your yard.

Cat condos are almost the norm for boarding. We made things better by adding in an aquarium for the cats' amusement.

Don't forget a play structure for cats. The structure we designed here is open to the rest of the room and gives the free roaming cats a place to play and perch.