Steven Torres' Four-Legged Growth
Steven Torres wanted to find a way to combine his business savvy with the joy he feels in pet parenthood. “I thought to myself, ‘how can I marry my passion for great businesses with my passion for pets?’” For Torres, that meant acquiring business falling within the realm of dog care spaces.
Dogtopia was a good fit for Torres, who now owns three Dogtopia locations—one in Woodbridge, Virginia, one in Wilmington, Delaware, and one in Raleigh, N.C. A fourth dog care location was acquired in Tampa, Florida, and will be converted to a Dogtopia location. Three of these locations were acquired with help from The Firm.
Dogtopia has high standards for dog care, which must be adopted by employees from acquired dog care spaces previously owned by someone else. “It can be a cultural shift for the employees to adopt the Dogtopia standards,” Torres says. “Any acquisition will require you to shift the way they did things and how you now want them done.”
“There will always be something that you need to change, and you should aim to increase the services offered by the business,” he says.
Luckily, the new standards Torres presented to existing employees was in line with what people in the dog care industry already strive to deliver to customers. “Our job is to enhance the experience of pet parenthood by providing a safe, healthy environment for the pets,” Torres says.
Though getting employees on board with a new way of doing things can prove challenging in any acquisition, Torres says he has the advantage of being in an industry where employees are usually passionate about their work. People come to work for dog care businesses because they love dogs and want to be around them. This helps with the transition to new ownership, especially when changes that are made are to the benefit of the pets.
“It’s starts with the first conversation,” Torres explains. “You have to communicate a consistent message to get that buy-in quickly.” An employee agreement that explains new standards and business operations will make the acquisition easier for everyone involved.
His advice to people considering acquiring any business is this: “Make sure you take the time to focus on culture and the people doing due diligence. Some people get too caught up on financials. Make sure any business you acquire aligns with the mission of your business.”
“Our mission is to enhance the joy of pet parenthood. It’s a purpose-driven business. It requires a lot of work and passion.” Torres adds that this passion was in “strong alignment” with what he and his business partner want to do. Together, they’re now the largest franchisee under the Dogtopia brand in the United States.
The Dogtopia brand is a leading dog care provider within the United States, with nearly 100 locations nationwide. Locations typically offer dog daycare, boarding services, grooming, and some merchandise. The company expects to have 400 Dogtopia locations by 2021. Torres bought the rights to 12 Dogtopias in Florida in addition to the other locations he already owns.
“We’ve talked to our clients, and what they want is a connection to the managers and people who take care of the dogs,” Torres says. “Pet parents want an emotional connection and they want employees to be excited and motivated.” Simply put, pet parents want to feel as though they’re leaving their dogs with people who will care for them in a safe, loving way. As a result, he strove to get employees on board with the new mission to keep people in place who the pet parents already knew and trusted.
Torres says there are distinct advantages to acquiring existing business as opposed to starting from scratch with a new business. “The advantage to a bolt-on business is you get cash flow on day one,” he says. “Economically, it makes sense. It puts you in a position where you’re not in the negative.”
Torres cautions that not every bolt-on business opportunity will be the right fit. “The key is to assess properly. There will be quite a few acquisition opportunities that aren’t good fits.” For this reason, investors and buyers shouldn’t scramble to acquire as many businesses in an attempt to grow. The businesses they acquire should align with their overall mission.
Torres expects to acquire more Dogtopia locations in the future, but also expects the dog care industry to grow rapidly. “This industry has a lot of momentum. There is a lot of opportunity to grow by deploying good business tactics.” The pet care industry is indeed experiencing rapid growth, with pet ownership increasing in the United States, particularly among millennials.
Torres welcomes the growth and has no fear of competition from newcomers to the industry. “I expect it will be a very competitive environment in the future, but I think that’s good.”