520: Finding Opportunities in a Changing Economy
Brought to you by: Pet Sitters Associates. Use ‘Confessional’ at checkout
Have you ever attended an economic outlook presentation? In this episode, we share insights from a recent local presentation that highlighted key economic trends affecting pet care businesses. We discuss how inflation is increasing price sensitivity among clients, making efficiency and added value services crucial. We also emphasize the importance of focusing on stable sectors like healthcare and education to maintain a consistent client base. Understanding and adapting to the local economy is essential for thriving, even in uncertain times.
Main topics:
Economic Adaptation Strategies
Impact of Inflation
Business Efficiency Tactics
Relationship Building
Targeting High-Income Clients
Main takeaway: Focus on stable sectors in your local economy, such as healthcare or education, to maintain consistent clients.
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A VERY ROUGH TRANSCRIPT OF THE EPISODE
Provided by otter.ai
SUMMARY KEYWORDS
people, business, pet sitter, pet, talking, local economy, clients, increase, income, year, industry, jobs, presentation, economy, hiring, investments, build, money, prices, spending
SPEAKERS
Collin, Meghan
Meghan 00:01
Hi, I'm Meghan, I'm Collin, and we are the host of pet sitter confessional, an open and honest discussion about life as a pet sitter. We are so glad you are joining us today. Thank you also to our Patreon people and pet sitters associates for sponsoring today's episode. There have now been over 500 episodes of this podcast, and we hope that at least some of them have resonated with you. If you enjoy the episodes and want to give back, you can go to pet sitter confessional.com/support, we recently attended an economic outlook presentation for our area, and a member of the regional Federal Bank came in and presented on the last two years of data and then looked ahead to 2025 it was, needless to say, a lot of amazing data and discussion around our local economy. Some of it was a little dry and boring, but it had a lot of broader context for running a business. And we wanted to talk about some of the things that we've been thinking about since that presentation.
Collin 00:53
And the first one is, if you have an opportunity to go to something like this, absolutely do it. It's an amazing way to get an in depth look into the economy of where you live and the broader context at a national level. Sure, you're going to be around bankers, you're going to be around people in stuffy suits, and you know, it's going to be kind of awkward, but you're going to have an amazing business to talk about, and they're going to love hearing about it, so that's totally fine. Again, you're going to gain a lot of information, a lot of insight into what's driving your local economy. What are the foundations? What are the bedrocks? What are the strengths? What are the risks facing that? Because then what you get to do is decide, how do you adapt that to your business? What does that mean for you? Do you have any insights that you can lend or take from that?
Meghan 01:35
Yeah, there is a lot of extrapolation, because as a pet care service based business. One, we are often very misunderstood. And two, you have to dig into the data and exactly how it applies to you, because they're
Collin 01:47
talking at a very high level here. They're talking about big investments. Some of the things that they talk about for our local area where multi, multi million dollar investments into these huge industrial projects, nothing that we would think directly relates to us, except for that's just more opportunities for people to have jobs. They're attracting people to the area. We need to be able to serve those people that they are attracting. So getting ahead of this, getting some knowledge of what's coming down the line, what big plans are being put into action, where development, where resources are being directed helps us know, oh, okay, look, that's a potential market that I can start talking about. Those are potential revenue generating streams that I can make a part of my business.
Meghan 02:30
We also learned about some risks facing our workforce, the people that we're hiring. Ever since covid, things have been super wonky in the economy and hiring, it's been all over the place, as in, they're seeing a lower participation rate of younger generations, and there are initiatives to work on that which will really help us.
Collin 02:49
Yeah, as we see people participating more in the workforce, we'll be able to attract them. We'll be able to know how to market to them and talk to them specifically, because
Meghan 02:58
it is important to know how you are going to attract the new and younger people into a career of dog walking and pet sitting with you. Our
Collin 03:05
second big takeaway was that there's just a lot going on, and there's a whole lot of information here. Some of this data was very localized to us. Again, it was, it was a regional presentation on the economic outlook and forecasting for us, but they also included a lot of national data. Again, this is hyper specific data to the United States. So if you are outside, if you're across the globe, this doesn't really help you that much, but hopefully you have similar data, similar numbers, that you can get your hands on and start digging into today. So some big picture stuff, people are still suffering from inflation. There's an increasing gap between people's income and their spending, which has to reconcile. Eventually, people are going to have to tighten down their wallets to make those two lines meet. So from a business perspective, especially in a service based industry, and particularly in a luxury service, because that's what we are. We are a luxury to people's lives as they dedicate more income to their pets. Do not be surprised when some of your clients pull back or maybe cut you out entirely. I know something that we've already seen is clients looking for less costly alternatives, or looking to cut back to just a few times each week, as opposed to multiple times a week, or
Meghan 04:18
even job sharing with neighbors, friends and family, we've seen that we'll come over two visits today, which is our minimum, and then the neighbor will come over the third visit. And then
Collin 04:26
consumers are really becoming extremely price sensitive, through this cost of inflation, through this gap of spending and income. And the problem here is that businesses are no longer able to easily pass on their price increases to their customers. So what businesses are doing is that they are either eating their costs, which is, I know a lot of pet care businesses are just taking the increase of inflation, taking the increase in gas prices without raising their costs. Other businesses are actually trying to increase efficiencies in their business to make it so that they can make more money. With the same input,
Meghan 05:01
this can mean reducing your service area so you're not having to drive and use as much gas and miles on your car, or focusing on offering smaller add on services that add a bunch of value but won't necessarily increase the price a bunch. So while clients may balk at a $3 increase on your dog walk, they may pay $3 extra for a Kong treat or a dog massage at the end of the walk. It may seem like a bargain to them. Oh, $3 for an F for a massage, and my dog would love that, versus $3 more for the same service that I've just been getting for three months. From the business perspective, you get more money without really increasing your effort, but there is increased efficiency you're already at the visit, so why not spend an extra 510, minutes doing a massage and get more money out of it?
Collin 05:46
He particularly pointed out about how these service based industries were continuing to drive high inflation, and this was purely because of the increase in wages. So whether you are solo or that you have a team, the amount that you take home each day is is very top of mind to you. So yes, what things can you add to a particular service that will make a value add to that client? That will, they will, they will see that as important to them, whereas you keep the baseline the same, but you have addition, additional things that you can build into them.
Meghan 06:17
The guys presenting also talked about that they're seeing much more within industry competition, and we've been talking about this lately on the podcast, with the smaller and medium sized businesses seeing an increased competition from big box alternatives. Now in our area, specifically, we don't have any dog walking and pet sitting franchises or multi million dollar dog walking companies, but there still are a lot more people who are have gotten into the industry in the past year or two, a lot more people doing this as a side gig from their normal nine to five job. So it's more important now than ever to lean into the relationships that you've already built. Are there trainers? Are there vets offices? Are there realtors or coffee shops or other small business owners that you've made connections with over the years, lean into that and help foster those relationships, not saying that we need to be disingenuous and use people for the sake of trying to get more business, but that those relationships are going to help you in the long run.
Collin 07:13
You know that you have a relationship with your clients. Have you told them that recently? Have you told them how much you appreciate them for supporting your small business. As more money pours into our industry, specifically, let's just be very honest, a lot more investment arms, a lot more banks are looking to buy up businesses, to purchase them and run them as pure investments. This means that there's a lot more money in the industry which there's a lot more oversight now, or there's becoming that. I know it's starting in the vet world of Senator Warren is looking to see how these corporate owned, these investment owned vet offices are being run with it's just a matter of time before that eye gets just gets directed at the pet sitting, at the dog walking industry, as that is becoming more and more commonplace, but again, when we think about running our small or medium sized businesses, again, especially in the context of what that looks like at a national level, those relationships that you have with your clients are more important than ever. Sure, it can feel like a lot of times it's just a business transaction, but if you genuinely appreciate people and the support that they are giving you and your business, you need to let them know how much that means to you and what they are helping with their local economy. Lean into that aspect of what you're doing, because only you can do that, the big box alternatives. They can't they're at a national level, but you have those relationships and those connections that they don't
Meghan 08:38
even just checking in with people and saying, How are you doing? How is your business doing? And maybe, how can we help each other? That's going to go a long way. That's going to foster that goodwill in the community, something that's good in any economy is pet business insurance. As pet care professionals, your clients trust you to care for their furry family members, and that's why pet sitters Associates is here to help. For over 20 years, they've provided 1000s of members with quality pet care insurance because you work in the pet care industry, you can take your career to the next level, flexible coverage options, client connections and complete freedom in running your business. Learn why pet sitters Associates is the perfect fit for you, and get a free quote at petsit llc.com you can get a discount when you join by clicking membership Pet Sitter confessional, and use the discount code confessional when you go to check out, check out the benefits of membership and insurance, once again at petsit llc.com Looking ahead to the next year or two, because of the differential in spending to income, people are expecting to see a slowdown in growth for the rest of the year of 2024 and into 2025 so basically, people are cutting back on their spending to rein in their budgets. This makes total sense. Prices, everything's going up, so I'm gonna clamp down on my wallet and not spend as much. But the good news is that apparently inflation has cooled.
Collin 09:51
Yeah, it's still on the rise, but it's just not rising as fast as it used to be. So the big takeaway from us for this was the fact that if you. Are not targeting high net worth, high income individuals. You need to start now, because the real crunch here of spending to income is really impacting the lower to middle income families. That's not to say we don't want to serve them. That's not to say that we don't need to allow them to have pet care or give them that option, but it does mean that as a business, you have to still pay your bills, you have to find ways to continue to serve your community, and that does mean getting connected with revenue streams, with client avatars, they're going to be able to provide you with much more consistent bookings and a consistent income,
Meghan 10:38
because our service is a luxury. Sometimes we have to work our way upstreamed to find the clients that are still wanting and able to use us with their discretionary income. The presentation then shifted to housing. Apartments built in 2022 are just now coming online, and they are hoping that it's going to ease the housing market a little bit. They're finally seeing a drop in rent prices, but new single family home starts are up as builders are switching away from apartments because interest rates are falling, so now they're getting back into the single family homes. I
Collin 11:11
thought this was a fascinating part of the discussion when they were talking about the housing market and housing trends, because this is a huge part of people's budgets, and they just haven't had the housing requirements to meet people's needs or the demands. And if you look around in your area, if you are talking to good realtors and good bankers and mortgage lenders, you will see that there is an actual, an absolute boom going on in a lot of these places, as just a building spree is taking place because people are finally able to get access to the building materials and the labor required to put these up. However, in the initial stages of covid and the lockdown, this is really globally, almost all construction halted, and so when they first started building back, they built apartments, but those have a really long lead time before people can move in. So these 18 months, these 24 months of building, are finally coming to an end, and people are moving into these so there, if you are not doing this, you really have an opportunity to build partnerships with brand new apartment complexes. And why is this beneficial to them? Well, we just mentioned a lot are coming online right now. So those apartment complexes actually need ways to stand out in a crowded market of other apartment complexes, very
Meghan 12:29
similar to what we're experiencing here in the pet care industry, right? So
Collin 12:33
it becomes mutually beneficial, where you can find ways to get connected with people, and they can now tout the relationship that they have with you, so drop off flyers, offer those first time discounts, build out that efficient route to help control your costs. We just talked about about needing to be more efficient with our time. We as a business, average about one and a half visits per hour for our 30 minute services, if we could get that closer to 1.8 or maybe 1.9 it would really, really help, and we'd actually make more money without ever increasing our prices, just for the sheer fact that we have helped control our costs as a business and become more efficient. And
Meghan 13:17
also think about employee retention, because employees don't particularly like driving all over the city sometimes, so if we can decrease that drive time between visits, that's going to be a win win for everybody. If you are hiring, the labor market is coming back into balance, meaning supply and demand for labor are equaling each other, which is good news for everybody. It means that some control has come back into the employer's hands again, and people's expectations for super high wages are coming down now, obviously, as a business, we need to pay people well, but the super high wages that people were expecting are starting to level off a little bit. You may find that more people are willing to work for pricing that you can afford than you could a year ago.
Collin 14:00
So again, if you are hiring, expect to see more people applying. Because one, they are needing a little bit of extra income because of those high inflation rates, and that income to spending ratio that is kind of wide, and so they are looking to make some extra money, and they're looking to do that in new and different ways, or that are flexible around their existing schedule. Additionally, people are trying to find new opportunities in their life as they continue to make these changes. So there are a lot of job seekers out there. So as a business, if you're hiring, you have a much bigger pool of people to choose from, so be picky and make sure you're focusing on culture. When you're hiring, people are still looking to get connected with places that mean something to them, that they can invest in, that has a larger purpose than themselves that gives meaning to their lives, and they can find meaning in we as a service industry can do that when people can connect with us as helping people, serving other people, and contributing to high quality of life for not just the pets, but for the owners as well. That's something that no other business or industry can really do. So
Meghan 15:00
ultimately, the presentation gave us great insight into our businesses. The first one being, we aren't alone. We had seen a slowdown in our personal business the beginning of this year. Q1 January, February and March were just really terrible. Oh my gosh. They were they were not good. Turns out there were a lot of other businesses in our local area that experienced the same thing, and
Collin 15:26
so to see that reflected on a chart made us feel like we weren't crazy. Made us feel that we were okay, right? Those broader economic impacts of weather events and slowing economy and other sicknesses going around and a bunch of other things that they threw out there was like that really helps us feel again, like we weren't doing something wrong, like we actually do know what we're doing. But sometimes even when you're doing the best thing possible, things are going to happen outside of your control, and it's our job to weather that storm as best we can and steer that ship to safer waters. And in that we have to look another takeaway from us is we have to look for efficiencies to build into our business. We have opportunities now before us that we can pursue and that we need to be pursuing heavily again, reaching out, reaching out to those new apartment complexes so that we can drive up that, that visit per hour ratio and keep our employees happy, and drive up those, those revenue per hour as a business is going to help us weather those storms better. As we build partnerships in our community and help more people,
Meghan 16:26
we also need to focus more on certain sectors for our local economy. And I know we've Collin and I personally have been talking about this lately for our own business, but think about in your local area, exactly where the stable jobs are. Is it in education? Is it in manufacturing? Is it in healthcare? There are bedrocks of our local economy that we can tap into. And maybe that's going trying to get connected with the CEO and going, hey, I can offer this to your employees when they have long days away at work, if we can get those partnerships, and if we can get inroads with the right people who have stable jobs that don't fluctuate a lot, it's going to improve that consistency in our business that not only saves us time and headaches, but also our employees as well.
Collin 17:10
So again, think about what your local economy is built up of. Maybe it is government, maybe it is manufacturing or healthcare. That means that those people's jobs are going to be fairly consistent come big storms in the economy, low points or whatever in between. If you can have a business that is riding on those and is serving those people really, really well, your business will be more smooth in those waters and will actually help weather those storms as they come.
Meghan 17:39
We would love to know if you have been to a similar presentation, or have any thoughts on what we've said, what are you seeing in your local area as far as the economy, you can email us at petsitter confessional@gmail.com or look us up on Facebook and Instagram at Pet Sitter confessional. We hope it was helpful. We want to also thank pet sitters associates for sponsoring today's episode. We will talk with you next time bye, bye.
