Boarding Kennels Valuation
One of the principle difficulties in assessing the value of a boarding kennels business is that there is always some sort of property associated with it. The purchase combines a residence with its land and a business. This can make valuation difficult - the local valuers have little understanding of the value of a boarding kennels as a business with its potential for growth, whilst the kennels specialist is not totally in tune with the local property values and land development value.
The kennels specialist is well aware what sort of price properties with similar qualities nationwide have been selling for, combining the qualities of the residence and kennels and kennel income. The specialist, therefore is best equipped to determine a price relative to the value of other kennel businesses with similar attributes.
Sell as a Going Concern or Demolish the Kennels?
In areas of expensive residential property private purchasers may be willing to pay more than the market price of the kennels as a business with the intention of demolishing the kennel buildings and replacing them with a stable block or tennis court and swimming pool.
In situations like this the kennel business may well become over-priced if there is a price war between purchasers.
Boarding Kennels Agencies
There are a number of agents who specialise in this field; some have been selling kennel and cattery businesses for many years and have a very good feeling for the market and what is reasonable. They advertise in the dog papers, where they may also list properties available.
Calculating a Boarding Kennel Income
The first thing to do in approaching this task is that you should always err on the side of caution.
A calculation must be made on the turnover of the kennels; at this stage you will only be able to estimate potential occupancy figures - 50% is probably a safe figure to start with - multiplied by the average boarding fee.
This will give you a gross income figure, from which you will need to deduct 25% to cover food, bedding and utilities. Obviously these will vary a good deal according to the build of the kennels and their insulation, but you only need a rough figure to work with.
Property details should give you the Business Rate. Your last deduction is wages, which can only be a guesstimate made using the minimum wage and an approximation of staff hours worked, not forgetting statutory holiday pay and national insurance. Leave the owners out of the staff calculation as they will be paid out of profits.
Funding the Purchase
To acquire the funding necessary to buy a kennels you will need to be able to present a good business plan to the company you hope to borrow from. Because the larger part of the cost will almost always be the residence a substantial deposit is necessary.
Again, there are companies who deal with business mortgages who will be familiar with the peculiarities of the mixed hereditament where a purchase is part business, part domestic. Banks and Building Societies, even at the best of times tend to shy away from this kind of mortgage.