The animal-grain factory benefits from a favorable context. More than 50% of households are domestic animals. The demand is therefore very strong for both the pet shop and for food and related products. Thus, despite the tense economic situation affecting household spending, this sector remains very buoyant. The sector has two very different sub-sectors in terms of both activities and organization, but these two segments are complementary. The first relates to the sale of animals. It is governed by strict provisions and requires specific skills. The second sector is the sale of food and accessories. Although focused on specialty products, it is not different from general retail. This segment is dominated by large retailers. A new trend is developing with food and pet supplies departments at specialized stores in other fields such as gardening. This trend demonstrates the dynamism of the animal-grain sector, which generated a turnover of 3.8 billion euros in 2010.
The market for grain mills in France
The market is organized more and more around specialized channels with more surface. Their offer, more varied both in volume and products, attracts more customers. The disappearance of the small independents is progressive. The sector has 4 segments:
- Breeders who produce the animals and also take care of the sale.
- Importers work for foreign animals, including exotic animals. They take care of customs and veterinary formalities.
- Independent pet shops. They are small and dedicated to retail sales. Their offer is small and often very specialized.
- Large specialty chains have larger areas. They offer a wide choice as well in pet food as in food and accessories.
No specific rules apply to the sale of feed and pet accessories. It is subject to the common law of the retail trade including the security of places receiving public.
On the other hand, the marketing of live animals is highly regulated. The certificate of capacity is mandatory for any animal sales activity. This document is issued by the prefecture. To obtain it, one must have 3 years of professional experience in the field, or produce a specialized degree. People who do not meet any of these conditions must pass an official evaluation, this procedure depends on the Regional Directorate Office of Agriculture. The establishment must be approved by the Ministry of Ecology and Sustainable Development. It must also be declared to the veterinary services of the prefecture. For the marketing of non-domestic animals, it is necessary to ask for an authorization of opening to the prefecture. A certificate of specific capacity for non-domestic animals is required.
Subsequently the professional is required to have 2 registers. One concerns the entry and exit of animals, the other their veterinary follow-up. These establishments are subject to controls by the veterinary services. A certificate of assignment must be given to every buyer of an animal. This document must be accompanied by an information notice on this animal. Dogs and cats under 8 weeks old can not be sold.
The status of pet food enterprises
As with most activities, it will be possible to practice as an individual entrepreneur or by creating a corporation. In the first case, taxation follows the regime of industrial and commercial profits. He is subject to corporation tax if he has created a company, or includes income from his business on his income tax return if he has opted for a self-employed business. Most establishments are operated in the form of a corporation.
VAT is 19.6%.
The characteristics of the operation of a grain factory
The professional must have a real personal interest in nature and animals. He must respond to customer requests with empathy. Creations by independents are rare and only concern particular types of sales, especially rare species. It may also be related activities such as grooming or boarding. As a result, the creations concern more the groups under banners with in particular the use of the franchise.
Investments are limited to developments. The reception of live animals implies hygiene and comfort. These points are subject to the controls of the veterinary services.
The management of a pet store
The sale of food products or accessories is a retail business. Its management does not offer specific specificity. For live animals, the main thing is to avoid losses or diseases. It is therefore essential to check their health status with breeders or importers. They must be housed in good hygiene and comfort conditions to prevent losses. Stock management must be strict both in terms of live animals and from the point of view of food and related products. Revenue is sales only.
In the case of animal marketing, the end of year holidays and the arrival of spring traditionally boost the market. However, this activity is not seasonal.
Expenses consist of the purchase of live animals and other products. Animal care is another important job. It includes all the costs of hygiene and food supplemented by veterinary care. For larger establishments, staff costs are very heavy, whereas they are particularly small in small structures where versatility is the rule.
In the end to get a good result will have to ensure a strict inventory control. The rotation of live animals must be fast. Ancillary costs, such as food or veterinary checks, increase the result. Given staff costs, it must be limited and extremely versatile. In this respect, the analysis of turnover per employee is an indicator to follow.
Cash requirements at start-up are 2 months of turnover for the marketing of live animals. For an activity limited to the sale of food or accessories, cash should not be a problem.
Valuation of the business of a pet store
The business valuation professionals apply a rate on the annual turnover of the last 3 years. The percentage applied is between 50 and 90% of the annual average turnover. Of course, these benchmark criteria on the CA are to be relativized according to the quality of the location, the profitability of the business.
The financing of a grain factory
The interest in pets is such that the market will continue to grow. Specialized groups are popular with the public. Under these conditions, affiliation to a chain is a guarantee of success.
As the sector is growing, funding is possible provided that it has a personal contribution (minimum 30%) and has significant experience in the business.
However, bank credit can not finance the stock, it is therefore appropriate to provide for the payment of this stock by the contribution.