Boutique Pet Grooming and Daycare Business

This acquisition opportunity focuses on a boutique pet grooming and daycare facility operating in an affluent suburban market with high pet ownership rates and premium consumer spending. The business offers dog grooming, overnight boarding, full-day and half-day daycare, teeth cleaning, coat treatments, flea baths, and limited pet retail items such as food, toys, and accessories.

Founded over a decade ago, the company occupies a 4,500 sq ft leased facility with five grooming stations, a secure indoor play area, outdoor turf, and a separate quiet boarding wing. The business has built a loyal client base of over 900 active pet owners and operates with six full-time groomers, three kennel techs, two customer service reps, and a manager.

With annual revenue of $2.1 million and adjusted EBITDA of $412,000, the business maintains high repeat usage, particularly through its prepaid grooming packages and recurring daycare clients. Upside exists through facility capacity optimization, ecommerce expansion, and wellness service layering.

This type of operation is well-suited to SBA 7(a) financing given its strong cash flow, service-based recurring revenue, and asset-light operations. However, success depends on labor retention, grooming service quality, and effective cross-selling of ancillary offerings. Buyer diligence and post-close growth execution are key.

Proposed SBA 7(a) Deal Structure

This acquisition could be structured with maximum financing leverage and a seller-aligned earn-out component:

• Purchase Price: $1.65 million (4.0x EBITDA)

• SBA Loan: $1,237,500 (75%)

• Buyer Equity Injection: $165,000 (10%)

• Seller Note (Subordinated): $247,500 (15%) with 6-year amortization and 12-month interest-only period

Protective deal terms should include:

1. 20% clawback on seller note if monthly grooming volume drops by more than 15% in the first 120 days

2. Bonus tied to cross-sell revenue expansion (retail and spa treatments exceeding $200K in 12 months)

3. Reduction in purchase price if more than 2 lead groomers depart within 6 months

Seller to remain as a brand ambassador or operational advisor for 6 months post-close, particularly to support customer retention and transition of vendor relationships.

Revenue Breakdown and Recurring Services

Revenue composition over the trailing 12 months:

• Grooming services: $1.1M (52%)

• Daycare and boarding: $700K (33%)

• Retail sales (food, toys, accessories): $160K (8%)

• Add-on services (nail polish, spa, teeth cleaning): $140K (7%)

Grooming is primarily prepaid through packages of 5–10 sessions, with clients booking on a biweekly or monthly basis. Average grooming ticket: $98.

Daycare/boarding is on a package or subscription basis:

• Full-day: $42

• Half-day: $28

• Overnight: $68 (includes full-day play and crate/room stay)

Clients are auto-billed via membership software for recurring daycare packages.

Post-close growth levers include:

1. Adding mobile grooming unit for overflow or VIP customers

2. Launching “paw club” subscription for monthly bundled grooming, treats, and spa

3. Introducing multi-pet household discounts

4. Cross-selling toys, food, and accessories during service pickup

Staffing and Labor Model

The company employs:

• 6 groomers (W-2 and 1099 mix)

• 3 kennel/daycare techs

• 2 front desk reps handling bookings and retail sales

• 1 general manager

• 1 part-time bookkeeper (remote)

Groomers are compensated via commission or hourly rate + tips. Some 1099 groomers have client followings and may require retention bonuses or transition packages.

The buyer should plan to:

1. Convert all key staff to W-2 for SBA compliance and team integration

2. Implement retention bonuses at 3 and 12 months

3. Offer spa service training (e.g., paw balm, blueberry facials) to expand groomer ticket size

4. Introduce a performance dashboard for upsells and rebooking efficiency

Facility Overview and CapEx

Facility: 4,500 sq ft leased unit in a retail plaza near high-income zip codes

• 5 grooming tables with electric lifts

• 2 bathing stations

• Retail front with POS system

• Indoor dog play area (split into large/small breeds)

• Gated outdoor turf run with drainage

• 10 boarding kennels with washable bedding and ventilation

Lease: $5,750/month NNN with 2 years remaining + one 5-year renewal option. Space utilization is only at 70% capacity, offering meaningful upside.

CapEx forecast:

• Equipment refresh (grooming tubs, dryers): $20K

• Turf replacement (planned in next 18 months): $12K

• POS upgrade or ecommerce platform add-on: $8K

Customer Base and Marketing

Active customers: 900+ over the past 12 months

Top 100 customers account for 41% of revenue. Pet ownership in the area is 2.1 pets per household, with high discretionary spending and strong Yelp and Google review presence (4.9 average, 430+ reviews).

Marketing mix:

• Google Ads + LSA: $1,500/month

• Email/SMS to active customers: biweekly

• Instagram and Facebook: organic and boosted posts

• Referral rewards: $15 credit for referring new client

Post-close expansion strategy:

1. Launch membership plan with monthly billing for repeat grooming and retail credits

2. Expand email campaigns with seasonal promotions and themed photo days

3. Implement ecommerce for food and toys with local delivery

4. Partner with vet clinics for mutual referrals

Financial Summary

• Revenue: $2.1M

• COGS (labor, supplies, retail inventory): $1.05M

• Gross Profit: $1.05M

• SG&A: $638K

• Adjusted EBITDA: $412K (19.6%)

Retail sales have the highest margins (45–55%), but grooming drives customer acquisition and loyalty. Boarding margins fluctuate based on occupancy and labor scheduling.

AR is minimal—90% of customers prepay or pay at time of service. Limited debt and no unusual liabilities.

Legal and Compliance

• No open complaints, wage claims, or licensing issues

• Business operates under county grooming and animal boarding license

• GL insurance: $1M

• Workers comp and pet injury liability policy in place

• Independent contractor grooming agreements are signed and compliant

Buyers should review:

• All contracts for commission-based groomers

• Booking software terms and client database ownership

• Sales tax collection processes on retail and grooming

Working Capital Requirements

• Payroll float: $40K–$50K

• Initial inventory and supply restocking: $15K–$20K

• Software and marketing upgrade: $8K–$12K

• Seller consulting: $15K–$25K

Ideal Buyer Profiles

• Experienced pet groomers looking to own a larger facility

• Veterinary or pet retail operators expanding into grooming and daycare

• Investors targeting affluent-consumer recurring services with strong brand equity

• Franchise developers exploring multi-location boutique pet care models

Post-Close Execution Plan

1. Retain all key groomers and implement client communication about continuity

2. Roll out membership and spa upcharges to increase ARPU

3. Audit pricing model and align it with local upper-quartile rates

4. Launch ecommerce and delivery pilot for top retail SKUs

5. Optimize scheduling to fill unused weekday slots with promotions or partial day rates

Conclusion

This pet grooming and daycare business represents an attractive acquisition for buyers seeking recession-resistant, service-based recurring revenue with strong brand presence. The mix of prepaid grooming, daycare packages, and discretionary pet spending creates multiple monetization layers. SBA 7(a) financing enables efficient buyer entry, and with proper staff retention and service expansion, this asset can scale to multi-location or franchise potential within 24-36 months.