Small Dog Hotel In Guangzhou China Tourism Essay

Small blackguard Hotel In Guangzhou China Tourism EssayGuangzhou is the largest urban center in south China. The wealth gap in the urban center is significant. Therefore, there is inexpensive labour on tap(predicate) while high-end customers argon willing to pay a profitable price for the services offered.The pet industry is booming. The get over population in the city has increased by 15% severally year1. This makes follow embarkment one of the most lucrative industries in the cityFinancially, it takes three months to reach positive net cash flow, and ROCE is negative in the source year, since the profit is negative, however, in the second year, the conjunction will have meaty increase in profits, the profit will reach 183,100.Description of Business returns ProvidedDog Overnight Boarding Providing overnight stay to franks a massive with a complimentary dinner in the evening.Dog Day Play Group Dogs are cared for during the day with play sessions in the morning and aftern oon.Dog appraisei Service Drivers pick-up dogs at 7 a.m., and brings them home in the evenings. This saves pet owners from the inconvenience of the hectic rush hour traffic. Special taxi booking is available at an excess fee.In-house shop offers dog products for long-term boarders. Owners can order dog treats over the phone using prepaid cards.Dogs will follow a structured free-and-easy schedule. Following each dogs stay, a complimentary report of the dog is provided to owners.Business OwnershipThe melody will be a Limited Liability Company, as this can reduce tax liability in the long term.Company locationGuangzhou city is in one of the wealthiest cities in south China. There is a increase number of middle-class residents, and it is also close to the manufacturing towns where kennel equipment can be manufactured at a low cost. pickaxe Hotel is located in the northwest suburb of Guangzhou, near G105 motorway with good transport links. G105 is also linked to tourist resorts in the province where people take their pets on holiday. So, the lodge can advertise along the motorway to attract probable customers.The northwest suburb is a mountainous region away from residential areas, as this minimises preventive from dogs barking. This particular location is surrounded by farmlands and allows for future expansion. The approximate commute time is 40 legal proceeding from the city centre.Facilities and StaffingThe maximum capacity is 100 dogs each kennel measures 2 x 4m. There is a large fenced, grassed outdoor exercise area. There is a small kitchen for preparing dog foods. There reception area sells dog products, and there is also a customer lounge.Staff to dog ratio is 110. There are 24 hour surveillance cameras operating(a) on-site to ensure the safety of dogs and rung. A burglar alarm will be installed to prevent dog thefts.Expansion Plan2nd category ontogeny kennel capacity by 50 Purchase agility equipment, a paddling pool and a sand pit for dogs to pla y in.3rd Year severalize the kennels by building luxury suites as well as offer budget stays. Provide dog grooming service.5th YearIntroduce dog training and socialisation classes. Franchise opportunities become available. Build more filling Hotels in other areas of the province. groceryingMarket NeedsThe number of dogs in the city is growing by 15% each year however, the pet service industry cannot keep up with the growth. People are unable to find all near pet boarding kennels at reasonable rates. More professionals have pets. However, most people dont have time to adequately care for their dogs for 365 days a year. Finally, dogs arent allowed on any public transport anywhere in China, which makes it difficult for people to travel with their pets.SWOT AnalysisStrengthWeaknessManagement team has expertise in starting a small business manoeuvreor has seen many successful pet boarding business overseasBeing the jump dog kennel can make the company the industry leaderThe idea of boarding kennel has not been tried and tested in the country group leaders have no previous experience in pet industryLack of skilled workersOpportunitiesThreatsThe pet industry is boomingThere is increasing demand for boarding kennelThe satisfaction rate for the service offered by competitors is lowCompetitors whitethorn enter this lucrative market in a some years, this may decrease the market share of the companyCompetitionAt the moment, there are very few direct competitors boarding kennels. The indirect competitors arePrivate Veterinary Surgery These surgeries are small and the housing is in poor people condition. As sick dogs are coming in to see the stager and boarders are placed in a cage along with sick dogs. The vet is not responsible if a healthy dog boarder move ill. The risk being the cost for treatment in case the pet contracts a virus is extremely high. The vet charges a high rate for boarding fees.Home boarding There are currently a small number of people offering home boarding. However, they are not regulated Customers do not know their backgrounds therefore difficult to establish reliability.It is predicted there will be an increase in the number of both domestic and overseas competitors in the future which will invest in this lucrative market.Differential advantage selection house is aimed toward middle class dog owners, since positioning the company in the middle class makes it easier to move up or down the market. The industry is new demand from each segment of the consumer market is unknown. In the expansion plan, the company will introduce luxury and budget stays to accommodate customers needs.Promotional PlanA lot will be invested in advertising during the first year, includingSign posts along the motorways G105.Leaflet distribution either by hiring commissioned people wearing company tee-shirts to distribute the leaflets in streets,Discounts offered during low seasonsAdvertising in partnerships with pet shops, with free taster board ing vouchers availableThe van transporting dogs with the company logo on will be self-marketing when driving in the cityMarket ResearchThe director has conducted desk research on www.goumin.com , a usual ne iirking site for dog owners. The main issues facing them include lack of boarding kennel in the city no transport which allows pets on hence restricts their movement, and expensive vet fees. The demand for boarding kennel is very high, yet there isnt any available at the moment.Since response rate on forums is high. The director has posted a view on the website (see appendix), in order to find out the monthly disbursement by dog owners and decide the pricing structure of Woof Hotel. Also, Woof Hotel will also use questionnaire to get feedbacks from owners after their dogs have stayed in the hotel, in return they are given discount towards their next stay.Customers and PricingWoof Hotel is targeted toward middle income people the rate is set to be low at 50 per stay in the fir st year in order to attract customers. However, the vets charge the same rate 50 at a monopolized price with poor service standards dogs in cages all day with no exercises at all. The consumer is predicted to be price insensitive, they can accept price increase if it matches the service provided. Moreover Woof Hotels rates are at a reasonable level.Service OperationsPremises and VehiclesThe cost of purchasing land is high, and some land isnt available for grease ones palms by the government. Therefore, Woof Hotel will rent the site. Since the company is located in the suburbs and rural areas, the cost of renting land for agricultural purposes is low the rent per m2 is estimated to be 95% less than in the city centre.ITThe Woof Hotels personalised webpage needs to be set-up there is a cost to purchase the domain. The Internet is increasingly popular today. It also serves as an advertisement of Woof Hotel. The receptionist will be trained to answer all the queries regarding to stayi ng in Woof hotel.InsuranceCurrently, there is few policy providers for pets in China. The insurance cover for business start-up is expensive Therefore, Woof Hotel will not purchase any insurance during its first two years. However it may decide to do so in the future, depending on the circumstances.Local RegulationsCurrently there are no laws aimed specifically at dogs. Although a compulsory Dog ID tag was introduced in 20092, many dogs still remain unregistered. Some unregistered dogs dont have vaccination certificate even they have been vaccinated. This is the main issue facing Woof Hotel, there is a risk of other dogs contracting the virus, however these owners represent a large proportion of potential clients.Management and organisationteam LeadersLin ZhangFinancial DirectorA Mathematics graduate at University of Warwick, also pursuing a MSc in FinanceA life- long dog lover, having raised puppies and have first-hand experience with caring for dogs, good knowledge on basic dog ca reVery business- minded and passionate close starting a pet care businessMultilingual, able to travel abroad to visit and study from other partner boarding establishments.David ZhangManaging Director experience as the facility manager at a multinational company for over 10 yearsSeveral years of experience starting and zip small businessesHave excellent local knowledge and business networks in the area.Team MembersStaff AReceptionistCustomer Service answering customers enquiriesStaff B and CDog CarerResponsible for looking after dogs and supervising their playsStaff DDriverResponsible for transporting dogs to and from Woof HotelResponsible for transporting dog foods and other necessities for Woof HotelStaff EGardener and CleanerMaintaining the landscape and garden of the Woof hotelClean dog kennels dailyRemunerationIn the beginning, Woof Hotel will lead low cost labour workers. The market price for an unskilled worker is approximately 2000 per month. In the future, Woof Hotel may recruit skilled workers such as graduates from the local veterinary college. The wage cost will increase to approximately 3000 per month, but Woof Hotel hope to retain these skilled workers to increase customer satisfaction.enlistingThe recruitment will be advertised. As there are many migrant workers in the city, unskilled labours are easy to recruit. Unfortunately, there is a loophole in Chinas laws. People with a history of animal malignment do not have criminal records. There is a risk that staff recruited may abuse animals. In such cases, the person will be dismissed immediately. The presence of surveillance cameras ensures the welfare of all our dogs.Financial ReportsPROFIT AND LOSS ACCOUNT for Woof HotelUnit (1 = 0.1 )Year 1Price per Dog per day50Average No. of Dogs35 bring in Sales Daily1750gross Sales Annually (365 Days)638,750Sales Tax (6%)38325Gross Profit600,425OVERHEADSWages200,000Rents60,000Utility Bills70,000Insurances0Dog food150,000Staff Vaccination and expenses1, 500Telephone2,400 victor fees and recruitment24,000Transport60,000Advertising200,000Gardening and Cleaning25,000Sundries50,000TOTAL OVERHEADS842,900Net Profit(Loss) Before Tax-242,475Corporation Tax (20%)0Profit for the year-242,475 spread head CASH FLOW STATEMENT HEREBALANCE SHEETUnit (1 = 0.1 )Year 1ASSETSFixed AssetsProperty-kennels and exercise area100,000Property- office staff accommodation80,000EM50,000Equipment50,000Vehicle120,000TOTAL FIXED ASSETS400,000Current AssetsCash843,100Debtors0TOTAL CURRENT ASSETS843,100TOTAL ASSETS1,243,100LIABILITIESLoans0Current Liabilities0Tax Payable0Overdraft0Creditors0TOTAL LIABILITIES0CAPITAL ACCOUNTCapital1,485,575Reserves (PL from Yr 1)-242,475TOTAL CAPITAL1,243,100AnalysisGross Profit Margin = Gross Profit / Revenue x100Year 1 600,425/638,750 = 94.4%Year 2 1,441,020/1,533,000 = 94%Break Even Units = Total Overheads / (Price of Product Direct Cost of Product)Year 1 842,900 / 50 = 16,858 unitsYear 2 1,212,000 / 60 = 20,200 unitsBreak E ven Sales = Total Overheads /Gross Profit Margin x 100Year 1 842,900/94.5 = 891,957Year 2 1,212,000/94 = 12,893ROCE = Profit before tax/(Capital Reserve+ long term loans) x 100Year 1 -242,475/1,243,100 = -19.5%Year 2 183,216/ 6,700,037= 2.7%AssumptionsThe utility bill and rents are paid every monthThere is no depreciation in the first two yearsDog pays on arrival the company has no borrowings. Therefore no debtors or creditors.Utility bill air-conditioner is used in summer no heater is needed in winterCommentaryThe number of holidays each month is likely to coincide with the income (see appendix for more details). Since this industry is relative new, the fiscal reports cannot give a reliable estimate, how people will respond to the business is uncertain, the actual number of dogs may vary. This will affect many figures in the fiscal reports.It takes approximately three weeks to reach positive cash flow. There is no gearing ratio since the company doesnt have any loans. ROCE is nega tive in the first year since the company is making a loss however, the company has substantial increase in profit in the second year.AppendicesCurrencyIn the business plan, the local currency Chinese Yuan is used, its exchange rate to British Pound is31 = 0.096 or 1 = 10.4Proposed location of Woof Hotel on Google officeIndicated by the arrow is the proposed location of Woof Hotel, it is close to motorways G105 The label A is the city centre., Woof Hotel has good transport links, the driving time is 30 minutes to city centre.Dog self-command Statistics in Guangzhou CityThe number of pet dogs in Guangzhou has increased rapidly since 1995 by official statistics4 it is going to increase by 15% each year, which coincides with the economy boom, as peoples income increases, they are more willing to invest in their pets.Monthly Spending by Dog ownersA survey was conducted on http//bbs.goumin.com/forum-24-1.html, 32 people have responded, their average using up is calculated to be 1,159 w ith a standard deviation of 563. However, this sample is biased also the spending is likely to double or even triple if the animal needs to veterinary attention, which has not been taken into account.Statistics of Holidays in China5The chart shows the statistics of the number of brink holidays per month in China, which is likely to coincide with the profitability of Woof Hotel, however, school holidays in February, July and September which are also high seasons have not been include when families are most likely to travel. Thus the high season will be from January to February and from May to August. The low seasons will be March, April and from September to December.What the paper says aspirate from financial express http//www.financialexpress.com/news/pet-industry-has-never-had-it-so-good-in-china/201045/, titled pet industry has never had it so good in ChinaIn some parts of the country, ownership is seen as a must-have accessory for the well-offThe country has 100 million dogs i n 2007 and is expected to reach 150 million by 2010.The market potential is expected to reach $5 billion by 2010.The recent pet-boom has given birth to a new economics sector in its own right the pet economy sector.In pet food industry alone, the compounded growth rate is averaging 30% per year.