Get the Paying for Your Facility Upgrade Cheat Sheet
Okay, so now that we know investing in facilities is the goal, how might we invest in facilities in a responsible way? I remember talking with a couple who had purchased a large piece of land and had a nice facility on it. The problem was nearly the entire thing was mortgaged and they had a ridiculously high mortgage payment, one that would cost the full price of four puppies a month to cover. It was very stressful because they had to produce 48 puppies per year just to cover their mortgage payment. I don’t want you to upgrade facilities and end up backing yourself into a financial corner. That’s extremely stressful. There’s a better way!
First off, if you’re super new and you’re playing with less than $10,000 or so with what you need to upgrade facilities, then chances are you are purchasing lots of little things. That might be a new whelping box or two, some modular kennels, maybe putting down some gravel in the yard to reduce the dust. With these sorts of improvements, I recommend paying for them fully. I wouldn’t put them on a credit card to pay over time; rather I’d put them on a credit card, get my points, and then I would pay the card off within 30 days. These are probably best done right after a litter goes home.
If you can build your project step-by-step and use it in the process–for example, build the pen and use it, then get the puppy pen stuff and use it–then pay as you go. However, sometimes you’ll have the money for part of the project; but if you purchase just the one part, you won’t be able to use it.
For example, what comes to mind is a wooden shed. I’m not a super big fan of wooden sheds for dog stuff because they don’t like water, but there are ways they can be used. For example, you could reinforce the floor with cement board and do tile. You can put FRP (fiber-reinforced panels) for the walls—those white, textured panels you see in public bathrooms—and then make the wooden shed more water tolerant. HOWEVER, you won’t be able to use this during the build process. Therefore, if the shed is unable to be used, then you have two options: you can buy the things as you go or wait until you have all the money and then start. Sometimes it’s helpful to buy the shed when you have the money, knowing it’ll sit there until you have more money to make improvements. Other times, it’s good to get the shed early because it might be a special deal or on sale and you don’t want to lose the savings. And, sometimes, simply seeing the unfinished shed out there will serve as motivation to get you going. Yet, there is also the chance that you might need that money for something else and now it’s sitting in your backyard, useless until you put more money into it, well that might drive you crazy.
If you have a tendency to spend the money that’s in your account and not save it, then it might be smart to buy things as the money comes in. This way, that money doesn’t disappear, as can happen sometimes.
It’s important to know yourself and what will help you accomplish things. I had an eye-opening conversation with ChatGPT about my money habits the other day and I said, “You know what I’m doing, what can I do better?” Let me tell you, he had some good insights! He recommended changing a few ways I’m organizing kid and family expenses on my credit cards and I really liked the change!
Get the Paying for Your Facility Upgrade Cheat Sheet
PLANNING A LARGER FACILITY
If you’re looking at building a larger facility, then I recommend planning out the whole thing, nearly every detail. I want you to know the structure, the roof, the flooring, where the windows will go and what size, the doors, and what material, as well as the plumbing and electric. Do you need gas for heating? Run all the scenarios in your head: how it will be cleaned, where you’ll run into issues, what happens if you have three litters at once? What happens if you get a returned dog who is still intact? Can you guarantee? How will you clean it? What does the permit cost?
Don’t skimp this planning; it will save you thousands of dollars and lots of frustration. Once you know what you want, talk with contractors. In fact, if you are fairly certain of what you want, but are finalizing details, it doesn’t hurt to run them by a contractor. I know that we were able to save our construction customers lots of money because they asked us about what we thought or what we might do with certain situations. Since contractors know the availability of materials, and the type of contractors who can do them, it’s worth it to at least ask if they have suggestions on where things might be problematic. If you live out in the boonies, like many of you do, subcontractors can be limited. You might find that you love the epoxy floor idea, but that means a specialist coming three hours just to do your floor—that’s going to be expensive. While it might seem more expensive to do tile, you might have a local tile guy who does fantastic work, and ultimately you’ll get a better price for a similar flooring. The difference can be a lot, thousands of dollars. We looked at roofing for a family the other day, same steel, heavy gauge, strong enough for 2” hail. But while the steel was the same, they were different designs and required different installs. The difference in the roofing prices was not much for materials, but the installation cost was three times the price for the second style. Pricing shopping helps.
I will make one caution: as a contractor, it was always nicer when the client wanted to go with something I was familiar with. It makes it easier to do estimates, ordering, and the whole job. However, sometimes what’s good for the contractor isn’t good for you. So bear in mind they will often steer you toward what they like to work with, and this can be better or worse for you. Take their advice with a grain of salt, do your own research, and get what you want.
If you ever need help with some facility stuff, I’m more than happy to jump on a coaching call with you. Given my construction background, especially Bill’s, and my experience with dogs, I can run ideas through with you to help you think through the whole thing.
Always remember, planning on paper is free, but undoing what has been built, well, that’s quite expensive. It’s also not worth skimping on the right product to save a little money when the product will not do what you need it to do. I don’t care how pretty or how cheap you got wood floors, that’s not the right product for your kennel floor. 😉
FINANCIAL PLANNING
Now, the money part regarding large facilities. I know, it’s a little annoying, but very important. First off, as you know, I’m not a financial advisor. Do what makes sense for you and what feels right. I’m just reflecting on what I’ve seen work, and considerations that play into it.
If you are doing the big build–the outdoor building for your entire kennel program–it can get pretty expensive. Where we live, to buy and erect a 30’ x 40’ metal building on a concrete slab will run around $60,000. This isn’t because the building is super expensive; often that’s the cheap part! More so, it’s because concrete is expensive, you need engineering for the slab, the cost to put them up isn’t cheap, there’s lots of equipment involved; and, of course, you’ll probably have a permit fee. This isn’t for any electric or water, nor any interior structure to assemble what you need inside. It wouldn’t be too hard to turn a 30’ x 40’ building that you can order online for $15,000 into a $100,000 project. I know it sounds crazy, but I want you to be prepared. I would hate for you to not have planned the whole thing out, get it started, but not usable. Nothing is worse than having a project sitting there, and you can’t do anything with it.
Once you have what you’d like to build figured out, it’s time to get some pricing. You can get rough estimates online, but I’ve found them to be wildly lower or higher than what we’d charge, so it’s still helpful to get an estimate. It’s not always easy to get an estimate, which is why it’s good to have a relative price online that you can sort of plan for. For example if you figure that the project will be somewhere between $80-$100K, you could call a contractor, briefly explain your project, and see if that’s about the price range they’d estimate for that. Let them know you won’t hold them to it, it’s just a rough guess.
I recommend finding an actual contractor–feel free to talk to a few–when you are ready to get started with the project. One thing I’ve seen many times with breeders is breeders who get in over their heads with the cost of their facility. They generally didn’t know how expensive things have gotten, and so they underestimated. They take out a large loan and, while they have a nice facility for their dogs, they also have a large bill to pay. It puts you back in that loop of having to consistently breed and sell dogs in order to keep things afloat, and that’s very stressful.
It’s because of what I’ve seen with so many breeders that I’m going to make this recommendation: I recommend that you have half of the money you’ll need for your project in the bank before you start. This means, if you have a $100,000 build, I recommend you have $50,000 in the bank from litters before you hire the contractor. And I’m going to recommend you have the ability to pay off the rest of the build within 24 months from the start of the build–ideally 12 months.
I recommend this for two reasons: the first is it prevents you from the trap of needing so many dogs just to break even; but second, I don’t want you to wait forever to put the facility up. If your facility allows you to have 4 more litters per year, and potentially sell your dogs for more money, you are leaving a lot of money on the table by delaying your build. If you made $10,000 on each litter, those four litters alone would cover the cost of the build. We want to strike the balance.
Take this and use it how you like. If you feel uneasy with any type of loan, that’s okay. Save the money first, then do it; or consider your ability to cash flow the project as litters come home. This is riskier, so it is good to have a back-up plan, which may be borrowing from your personal savings.
Oh, and one more thing to share from my experience with construction. Rarely does it come in at or below budget. When doing builds like this with clients, they tend to be more conservative in the beginning, watching their pennies. But when you’re looking at materials, and this tile is so much prettier and only $.50 more per square foot, it’s hard to say no. You want something you like if you’re going to spend the money, right?
In our experience, these types of builds–ones that are complex with a new structure, electric, plumbing, and interior build outs–it’s commonplace for the budget to come in about 20% over the original price. We actually tell our custom home customers to design their home with the understanding that it’ll probably come in over. This isn’t the contractor necessarily taking advantage, but things get missed in planning. You’ll want to add a little something here, upgrade materials there. It happens. Do it when you’re building. It’s worth it. But know that it happens. So if you plan for $100,000, know that it might be $120,000 when you’re done. I don’t think you need $60,000 to start, $50,000 will do; but you’ll know that the extra will need to be cash-flowed as the build is going on, or soon after.
So, in summary, do the best you can to get the most accurate pricing that you can for your full project. Set aside about 50% of the cost of the estimate before you sign up with a contractor to do the build, and then anticipate going about 20% over budget.
If you liked these simple formulas and want them for reference in planning, you can download the cheat sheet I made for you. You can get it below. This way you can reference everything while you make your plan.
If you need help, I’m always available to help. Coaching sessions are available, but sometimes we can answer your questions in just a 30-minute strategy session!
Thank you for joining me for another episode of the Honest Dog Breeder Podcast, with me, your host, Julie Swan. Thank you for coming along on this journey of finances. I know it can be a little boring, sometimes overwhelming, but it’s worth it and your business will be so much better off because of it! Thank you again, and I can’t wait to see you in the next episode!
