I have always been a Design/Builder. Turnkey, Inc. is a multigenerational company, founded in 1960 by my dad. We’ve built both residential and commercial, including office buildings, custom homes, pet resorts, veterinary clinics and even exhibits at the Houston Zoo.
In 1991, my wife purchased an existing run-down kennel, and our life took a sudden turn to the dogs. Frankly, I thought her desire to get into the dog business was a bit odd. She had a passion to provide for them like they were at home, but that level of care seemed a bit over the top compared to most existing kennels that I knew of. Little did I know, that the demand for higher-quality care was growing exponentially.
In the mid-1990s, there was very little professional help for start-up facilities in the pet care market, and even less for their financing opportunities. There were a few design professionals around; however, their focus catered to the more lucrative market of humane societies, shelters and veterinary practices. The newer companion pet care facilities, or “well” animal care businesses, were scarce. It was only after building our own facility that I got started with this industry. Since then, I have helped more than a hundred facility owners with their projects, including site selection, business plans, demographics, design, etc., to build their new businesses.
As I’m sure you’re aware, over the last decade, there has been tremendous growth in pet care. It’s estimated that the U.S. pet industry reached $120 billion in 2021—there’s no doubt we’ve definitely taken off! Now, unlike before, a new pet care facility is not likely to be the first pet-centric business to enter a market; however, there still may be room for growth. We just have to do a little more homework before jumping in and committing to either a new business, an expansion, a remodel or multiple locations.
When we have great dreams, it is natural for us to want to jump to the fun stuff, like anticipating future revenues, designing logos and picking out colors. But with the new competitive nature of our industry, demographics should be the first thing tackled. Thorough demographic studies will provide valuable information to use for project feasibility, competitor analysis, project sizing, market saturation and marketing—the bones of a good business plan!
There are two preferred ways to look at demographics for an individual site: radius and drive time. They both provide important, but possibly different, information. Most clients study generic demographics that encompass a specific town or city in full, but we need to break this down to provide meaningful data for our specific area—especially in large markets.
Think of the city of Houston, for example, where there is a population of 2.4 million in a 665-square-mile area. The demographics on the west side of town may drastically differ from those on the east, so I recommend a one-, three-, five- and 10-mile-radius report, as well as a five-, 10- and 15-minute drive time, depending on the city, terrain and location.
For instance, what if the perfectly priced and zoned piece of property is just across the river? Even though new subdivision neighbors can see it from their backyards and the radius may only be one mile, they will need to drive over the bridge to get to the property. This makes it an undesirable 20-minute drive. These type of demographics will pin down who is exactly where and whether it’s realistic to think that the target market will travel to the location.
Population numbers are easy to find, but what do they really tell us? Do we know how many people share one house or how many live alone? Population by itself can inflate stats that we use to evaluate demand. A household is defined as a person or group of persons who live and eat together. We want to gather this data because the “big dogs” (AVMA (American Veterinary Medical Association) and APPA (American Pet Products Association)) collect all of their data concerning pet ownership by household, not by individuals in the household.
As a household, we would say we have two dogs and a cat, not that our son John has a dog, daughter Sally also has a dog and that the wife has a cat. (Or maybe the husband wants to make sure people know it’s not his cat!)
During this study, we also need to know the target market’s median household income, household age, projected growth and the mosaics by radius. The mosaic is a consumer classification which segments the population into 15 key groups and then segments those 15 groups into 66 specific types. This helps you to understand an individual’s likely customer behaviors. Plainly, will they do business with you, and how do you design your marketing message to make the largest impact.
These mosaics tell you who is where, taking the guesswork out of your marketing plan. For example, one mosaic is deemed “American Royalty.” These are the affluent, influential, and successful couples and families living in prestigious suburbs. They hold high levels of education, senior positions professionally and are proud of their success. They enjoy donating to high-profile causes and kicking up their heels at fundraisers. Facebook memes are not going to be the best way to capture this highly sought-after consumer. This mosaic group is attracted to messages that make them feel connected to their future, creating authentic, new experiences and have a true, deep-rooted foundation in quality products and service.
Does it Make Sense?
In the past, we could more easily say “build, build, build” and feel confident that we would have success, even with only anecdotal information. However, we have turned the page into a new phase in our industry, where projects cost more and the competition is greater. Therefore, we need to make sure the target market is not yet overly saturated. This homework is necessary to set ourselves up for success. It may be better to find a different location than to fight for the business in a limited market.
As a designer, you might think I wouldn’t care if a client did their research; after all, a job is a job, right? Wrong! An old architect once told me, “It is the architect’s job to protect the owner from themselves.” In other words, provide them with the information they need to make wise choices. So, an architect or designer’s job is to fully understand the project, including operations and budget. Without that, they can’t properly design spaces and work flow.
Part of understanding the project is sizing. To know what size facility and what profit centers are best for a location, we need the demographics. You don’t want to build a 200-run luxury pet resort in an area that will only support 50 runs and where there are already 100 available.
The other key item an architect or designer needs to know is the profit centers, and therefore, the operations. However, that subject will take another article and more unusual advice!