Economic viability of an expansion of a pet shop to offer hotel stays for pets

Authors
DOI:
https://doi.org/10.47456/bjpe.v9i4.42112
Keywords:
feasibility analysis, pet shop, economic and financial, capital budgeting
Abstract

Even in the face of the uncertainties that have affected the world, the pet market has shown growth, growing 27% in 2022 compared to 2021. Given this promising scenario, this article presented an economic and financial feasibility analysis of expanding a business that provides grooming services, transforming it into a pet boarding hotel capable of accommodating dogs and cats. This analysis aimed to quantify the viability of replacing an existing business with one that offers a more cozy and attractive space for animals and their owners. For this purpose, a case study of an applied nature with a qualitative-quantitative approach was conducted. The results showed that the investment, evaluated with a useful life of 5 years, was feasible, providing a Net Present Value (NPV) of R$ 22.774,77 a 29,71% Internal Rate of Return (IRR), and a discounted payback period of 3.4 years. This study serves as a benchmark for other businesses in the same industry by empirically elucidating the expansion structure of a pet-oriented venture.

Author Biographies
  1. Aline Dias Mendes, Instituto Federal de Minas Gerais, Campus Congonhas

    Undergraduate in production engineering.

  2. Clárison Gonçalves Gamarano, Instituto Federal de Minas Gerais, Campus Congonhas

    Master's in Business Administration from the Graduate Research Center in Business Administration at the Federal University of Minas Gerais (CEPEAD/UFMG), in the "Strategy, Marketing and Innovation" line of research (2020). Graduated in Production Engineering from the Federal Institute of Education, Science and Technology of Minas Gerais (2017). Researcher at the Center for Statistics and Behavioral Sciences (NECC). He is currently coordinator of item production for large-scale assessments at the Avaliar Institute. In 2018, he worked as a researcher in the CNPq research group "Operations Management, Logistics and Operational Research", at the Federal Institute of Minas Gerais. In 2017, he worked on the research project entitled "Analysis of logistics cost trade-offs"; and from 2015 to 2017 on the applied research project entitled "Evaluation of Logistics Costs in the Small Mining Segment", which was funded by IFMG with support from Fapemig. His research interests include Strategy, Marketing and Innovation, Consumer Behavior, Cost Management, Investment Analysis, Financial Management and Educational Tools.

  3. Luiza Bernardes Real, Instituto Federal de Minas Gerais, Campus Congonhas

    She holds a PhD (2020) and a Master's (2015) in Optimization of Logistics and Large-Scale Systems and is a production engineer from the Federal University of Minas Gerais. She is currently a professor at the Federal Institute of Minas Gerais Congonhas Campus.

  4. Francis Marcean Resende Barros, Universidade Federal de Minas Gerais, UFMG, Brasil

    Graduated in Business Administration from the Federal Institute of Education, Science and Technology of Minas Gerais - Ouro Branco Campus (2018). Master's in Business Administration from the Federal University of Minas Gerais (UFMG) and PhD student in Business Administration at the same institution. Fellow of the Coordination for the Improvement of Higher Education Personnel (CAPES). Researcher at the Center for Statistics and Behavioral Science (NECC). His research interests are Services Marketing, Digital Marketing and Consumption in Online Games.

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Published
2023-11-22
Issue
Vol. 9 No. 4 (2023): Regular Issue (October - December)
Section
ECONOMIC ENGINEERING
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How to Cite

Mendes, A. D., Gamarano, C. G., Real, L. B., & Barros, F. M. R. (2023). Economic viability of an expansion of a pet shop to offer hotel stays for pets. Brazilian Journal of Production Engineering, 9(4), 264-277. https://doi.org/10.47456/bjpe.v9i4.42112