Alright – so today we’ve got the honor of introducing you to Cindy Pennington. We think you’ll enjoy our conversation, we’ve shared it below.
Cindy, appreciate you joining us today. Has Covid resulted in any major changes to your business model?
This might not necessarily be what you would expect to hear as an answer to this question. No we did not develop up a new service of delivering curbside kitty snuggles (though it was a brief thought for a minute there), but we did make a change I don’t think we would have been brave enough to do (or thought to do) without the pandemic.
We are a very small business that has always run in the red but our mission to help save homeless cats’ lives and find them loving forever homes while also being a place of happiness and relaxation for the public is what has kept us going. When Covid hit we were terrified this would mean the end of our operations. However, surprisingly it actually gave us a chance to re-think and make some positive changes to our business model to allow for growth and sustainability. We had a mandatory closure for about 2 months, after which we opened by private appointment only for another month. Our main source of income is our entry fee to our cat lounge. We had to figure out how to bring in enough money from entry fees while also maintaining a safe environment for our staff and guests. We quickly switched to a reservation model that would allow us to control capacity and the flow of customers per hour. While we used to offer discounted tickets for students, seniors, and military, 0ur new reservation system did not allow for the various rates and capacity limits to work in tandem, at least not at the subscription level we could afford. So as soon as we opened back up we had a reservation system in place and one streamlined entry fee for all guests. When I was originally creating a business plan all my financial projections were made on this single entry rate and did not take into account permanent discounts. However, after a slow start I implemented these discounts as a way to bring in more business. I later did an analysis and realized with the discount criteria being so broad, it was actually covering about two-thirds of our customers. That’s two-thirds of our customers not paying the rate from my initial financial projections. I love a discount as much as the next person and liked being able to offer lower prices to my customers, however, it was at the cost of the viability of the whole operation. I couldn’t keep pouring more personal money in each year to just to make rent and payroll.
This change in pricing structure (along with government pandemic funding) kept us afloat through 2020, and made 2021 our highest grossing revenue year to date! Our new price structure is really what was the appropriate fee for our business model from the start, I was just too shy to set it as such. The imposed capacity limits also make for a more enjoyable atmosphere for customers. Covid forced me to learn a lesson on setting appropriate prices for the success of your business. All that said, we still ended 2021 slightly in the red but we also flourished in that we were able to invest in needed updates, new tools to better the lives of our onsite cats, and increase staff wages and the number of staff onsite. As of the start of 2022, we are on track for a successful year and I hope to continue to be able to increase our staff wages and better the lives of the cats while at the café.
Awesome – so before we get into the rest of our questions, can you briefly introduce yourself to our readers.
I’ve always grown up around animals and knew as soon as I got my first place after graduating college I was going to have a pet or two. The plan was to start with a cat as they are easier when it comes to travel and at the time I was still traveling every other weekend to visit my boyfriend still in college. Later I was going to get a dog and our pet family would be complete with 1 cat and 1 dog…..well, several year and several hundred cats later….we still don’t have that dog! I decided so that my cat would get used to other animals that I would foster for a dog rescue. However, I had trouble connecting with somewhere that had small dogs needing foster but 1 rescue offered me a cat. Then I fostered another cat, and another, and another….and before long I was knee deep in cat rescue. It opened my eyes to the plight of homeless pets. After about 8 years of cat rescue/fostering I started wanting to do more. I saw a real need for cats that are super shy or nervous at adoption events but total lovebugs at home where they are more comfortable. I wasn’t sure how to pull that off but then I was introduced to the world of Cat Cafes and knew that’s how I wanted to make my positive mark on the world!
As a cat cafe, we partner with rescues, shelters, and even individual cat rescuers who are looking for a home for their rescued cats. They supply the cats, we supply a comfortable home-like setting the cats live in 24/7. This makes them much more comfortable and helps their personalities shine. Customers pay an entry fee necessary for rent. payroll, and supplies and can either just have a fun time hanging out with the cats for a bit or if they find one they bond with, they can adopt them into their own family! We love that we not only have a positive impact on cat’s lives but that we also provide a happy place for people to enjoy.
Can you tell us about a time you’ve had to pivot?
This isn’t really a full “pivot” but early on in our business we did have to make a decision on adding on an additional revenue stream un-related to the cat café and nothing I ever considered getting into when first opening my business.
The property we operate out of has 3 separate business suites. We opened our cat café out of the main portion of the largest building which is a 1960’s house. The old garage area of the house was separated into a separate small business suite which was rented to a home health company when we leased. There is also an unattached building in the back which has always been different businesses. About 8 months after opening, the business with the suite attached to our building ended their lease. They were never there and we had definitely grown accustomed to not sharing the parking lot! We were also severally struggling to stay afloat and I was pouring thousands of personal dollars into the business each quarter to make rent and payroll. It was a risk but the thought occurred to me that we might be able to rent that suite ourselves and create a new revenue stream with the space. I thought of using it to build out a real café, coffee shop, or even ice cream parlor, but #1 we did not have near enough funds that would be required for build out of any true food service business and #2 I was leaning towards an ice cream shop but there was already a place next door selling cupcakes and ice cream.
I thought of lines of business complimentary to cat care and started noticing there was a real need in the market for luxury cat boarding services. Boarding place after boarding place I looked at, even if they had nice big areas for their dogs…the cats were always kept in small little cages. I did find one place on the outskirts of DFW with large rooms for the cats but I still couldn’t find a single place offering 24/7 access to a camera to check in on and monitor your cat. For me that is what I would worry about most if boarding my cat, is are they doing well and receiving the best care or are any disgruntled workers not treating them kindly. So with that I started renting out that extra suite and had an amazing local wood worker (check out @braidedsweetgrass) custom build us large 4ft x 6ft x 6.5ft kennels for boarding. Each kennel has its own full size cat tree and a petcube camera so customers can check in on their furry family members anytime they want. Our boarding business started out a bit slow but we did break even our first year and in 2021 it accounted for close to 20% of our total revenue. Our customers also really value our service we offer, the large space for their cats, all the cuddle time their cats get with staff and our daily informational postcards we send with photos to keep them updated. However, our boarding space is small with only 3 main kennels and one overflow kennel and we are starting to book out early during peak times; we’ll need to think about trying to add additional kennels soon.
How did you put together the initial capital you needed to start your business?
Well this is a short answer, I practically funded the whole thing myself because I’m not good at fundraising!
A slightly more detailed answer is that the only way I really knew how to raise funds is through Kickstarter and I had seen several other cat cafés run successful campaigns (and also saw several failures). I knew I needed to try and build some hype so I first launched my Facebook and YouTube to get a very small amount of traction. I also manned a booth at a local vendor fair as a way to announce my anticipated opening to the public (I still had not nailed down a location). I tried my absolute best at filming a compelling Kickstarter video and launched my campaign with something like a $20k goal. That campaign fell very short but it did gain some supporters and garnered around $3k in donations (but the way Kickstarter works is if you don’t meet your goal, you don’t get any of the pledges). I had originally wanted to open as a full service café, but with the failed Kickstarter I changed plans to the cat café model offering pre-packaged drinks and snacks which requires much less investment in buildout as you no longer need to comply with food service rules. One thing I really wanted to make sure I had the funds for was a full security system so I could keep an eye on the cats during closed hours. After shopping around I realized to get the kind of set-up I wanted I would need about $3k. So with that I relaunched my Kickstarter, focused it on the need for a security system and set the goal to the much lower $3k I was hoping we could raise again. I still remember the café I was eating lunch at when I learned we met our kickstarter goal!!! It was such a great feeling. Other than the $3k we raised on kickstarter, the rest was up to us. We were around $25k in on opening day and by the end of that first year with some additional items we needed to purchase after opening plus needing to float the business during slow months we were about $40k in and our personal savings depleted. However, it is a great feeling knowing we were able to do this ourselves without large bank loans or 3rd parties we might not always see eye to eye with.
Contact Info:
- Website: www.thecasualcatcafe.com
- Facebook: www.facebook.com/thecasualcatcafe