Swimming Upstream for Profits

It sucks when you invest loads of money in becoming NYC's only doggie swim center, and then your landlord jacks up your rent 64%. The owner was forced to shut down two days before Christmas and layoff 15 staffers.

According to the Jan 14 New York magazine article by Andrew Adam Newman (Newman!), there currently are no canine swim centers in the 5 boroughs, and the Big Apple pet scene appears to be shaking out other pet businesses too.

"I think everyone thinks, 'Boy this dog business will be a lot of fun to be in,' but the economics are really tough," said one Manhattan-based dog walking service owner.

Lesson here? Make sure when you make large investments into infrastructure (like a pool and special filtration systems) that you lock your landlord into a rent-increase structure that limits the annual increases. Even better? Set the term of your lease to equal the payback period for the cost of the infrastructure investment. Example: If it is going to take 3 years of profits to pay off the equipment costs, then set your lease for 4 yrs. This will ensure you make back your money from the equipment, with a little profit left over in case you are forced to move out at the end of the lease.