Beginning Dog Walking and the Nightmare that is VAT
We have had VAT looming for over two years now. For a small business that has very little VAT claimable expenses and a very high percentage of the income goes to pay the team and training the team, which is not VAT claimable, can be a killer. We also have the problem of people undercutting the Professional dog walkers. People who have very little overheads, very little experience and training and see dog walking as a temporary hobby until they find something else. For us it is a career, we have all done training and we ensure that all the dogs we take on get the best care and constant training. I have got a degree and many other qualifications in Animal care and dogs have been a huge labour of love all my life. We get the dogs that many other dog walkers have deemed too much work to walk as they are harder work than your average dog for various reasons and they cherry pick all the very easy dogs, but still generally give up after two years when they realise that it is not all fun and games and easy money, many giving up because a dog has had a major accident, they were uninsured, so the owner is left with a huge bill and no dog walker.
If they are insured, the insurance is high and in the early days, over 10 years ago, I frequently drove 50 miles a day to get round all my dogs. I went for 5 years without a holiday, being ill was out of the question and frequently worked 7 days a week. My phone went 24/7 I took 6 weeks maternity and then back to work with a baby strapped to me. I could have put her in childcare, but decided that she was best with me in a sling and the fresh air, and ended up with the easiest most contented baby ever who was walking at 8 months and demanding to walk most of the time instead of the sling and never ever used a pram. 18 months later, I was pregnant again. This time I realised that it was not as simple as before, two children and dogs would not work out, so I took on assistance from Mark and my children's father, Alex. After I had baby number two (lucky for me both were born around Christmas so I could take Christmas holiday) I took 3 months of maternity, unfortunately during this time, I had some major issues with Alex and we split up, leaving me with a one month old, a two year old, four dogs, two cats,ferrets, fish and rats to care for. On return to dog walking a month later, I got Elisabeth (who was now two) into nursery two days and grandparents care three days and again I was out walking with a baby, again a very happy, healthy baby who did not start walking until 15 months and this time did not want to walk anywhere, so when he got too heavy to carry at two years old, he too began nursery
By this time I employed a few dog walkers and TLC Dog Walking was growing. I had now developed a dog walkers handbook and a period of training to ensure all my team were the best. As we grew, I employed team leaders as I was stretching myself too thin. I then employed Zara to help with the admin, as we now have around 200 clients on our books at any one time and can walk upto 100 dogs a day.
All this hard work and then comes the kicker. 8 years of major graft to build a thriving business and I hit the VAT threshold. I phone the HMRC and explain that we have hit the VAT threshold, but we can not add 20% to our prices, as this will price us out of the market. Basically their answer was tough! So I have to cut some of my prices to get under the threshold, I still have all the outgoings, so the only way I can do this is by cutting my income, by the time we are back to the threshold again, the profit is much less, as 80% of it goes straight out for wages and costings (excluding me), but we have to cut some of our prices again, and this again is more of my income and now around 90% of the gross profit goes onto the wages and costings.
Living month by month I have been panicking that we will go over the VAT threshold, so I finally decided that in January we would add VAT, taking us back to the 2016 prices, unfortunately many people have left us due to the price increase and chosen to go with other walkers who are cheaper, so it looks like we may be under the threshold anyway, but I am leaving the prices as they are, to prevent having the worry of "when will it happen?" over my head every month.
Dog walking is a labour of love for all of us involved, but unfortunately as we do pay for insurance and a booking system that ensures we can check in and out and be GPS logged to avoid any confusion over walks, we have team leaders as support and constant training to ensure all our team are the best possible dog walkers, we have much higher overheads than the people who choose to walk uninsured and without any training or experience to call themselves professional, but the VAT is hitting me hard and I am on less than any of the other dog walkers out there.
I am just praying that now this massive horror of VAT has finally been reached, there will be no more nasty shocks and I can get the business I love growing again and back on track with TLC Dog Walking and the amazing team I have developed over the years, who have become the Professional :Dog Walkers you love.