For Sale – A Pet Care Facility Near YouMay 16, 2019
No, not Pet Camp, but it’s happening all over the San Francisco Bay Area.
Last year one facility closed and another sold. Right now we know of two facilities in San Francisco that are actively being marketed (as opposed to those what will passively accept an offer), and a facility in Oakland recently announced they are closing.
What is happening?
We suspect there are a few things driving this phenomenon.
The first, frankly, is that running a pet care facility is hard. There’s the normal stress associated with running any small business. You know, things like, even after being in business for a while, every time you need a loan you need to put your house up as collateral.
There’s also the endless paperwork associated with stuff that you’re not sure really matters (in fact you’re all but certain it doesn’t matter at all but you don’t want to piss off the government, the bank, the insurance broker, or the accountant so you just do it), balancing cash flow, profits, employee benefits, and of course the endless hours it takes to run a small business.
Add to the list that pet care facilities, at least those such as Pet Camp, operate around the clock every day of the year AND that we are caring for living creatures that are part of someone’s family. Add it all up and it results in a lot of stress, plenty of caffeine, and probably too much alcohol and not enough time at the gym (or maybe that’s just my life).
The second thing is the enormous value of the property upon which some of these companies operate. For a company that has been in business for over 20 years and owns its property, the value of that large piece of property in the San Francisco Bay Area is absurdly high. The property is often worth way more than the business and some developer is always looking for a decent sized parcel to build housing or, at least near Pet Camp, to grow marijuana. Turns out you can make way more money growing weed then taking care of dogs and cats!
Thirdly, is the massive amount of money that private equity companies and investors are willing to spend to acquire pet care facilities. I must admit I’m a bit surprised by this level of interest. I get that a well-run pet care facility is “cash flow positive” (at least in a good year) and this generates some interest, but I don’t really see the economies of scale in consolidating these facilities that these equity firms see.
Sure, there are some “back of the house” savings that could be generated by consolidating payroll, marketing, reservation departments, etc., but these costs are not the major expenses of running a pet care facility (in case you wondered, that cost is actually the folks who take care of the pets). Perhaps these folks also think that they can just run our businesses better and thus make more money; this could be true as well. But in any event, these money folks are pretty smart and there must be something there for all of them to be jumping in with this much cash.
But what about Pet Camp?
We remain committed to staying family owned and operated for as long as possible. Do we feel the pressure to sell? Yes. Do we have a joke that between solar panels and a retractable roof we could grow artisanal organic pot? Yes, too. But none of that can trump the amazingly great feeling of taking care of your dog or cat. It sounds hokey, but really, we love what we do, and we want to just keep on doing it.
Thanks for reading