Whilst there amongst the cherry blossoms and hot springs, she discovered the very first Cat Caf. She had heard about these types of establishments, but had never seen one. She wandered inside, was asked to register, pay a fee of $7, and purchase a drink and snack of her choice. From there, she was allowed to roam the property and familiarize herself with all the cats on the premises. The place was scattered with toys and treats- people and cats alike were able to come and go as they pleased!

Katherine grew excited and envisioned opening a similar concept in Vancouver. While on the trip, she also received an email from a recruiter to move to Prince George and work at a training facility alongside university students to help give them the hands on experience they needed as a Practicum Instructor. The job in Prince George boasts an annual salary of $155,000. Katherine recalls reading reports that they were in dire need of veterinarians to assist with running the education program there. Based on quick research, Katherine believes a lower cost of living and would likely be able to cut living expenses by about 30%.

Katherine felt overwhelmed and knew she had to crunch some numbers. Her current role paid about $3,500 every two weeks after payroll deductions. She paid approximately $3,000 for rent every month living with her partner, had car payments of $130 per month and typical amounts for food, gas, a gym membership, and social outings. She made sure to donate a minimum of $12,000 to the animal shelter each year and would not want to change that. She also supported her partners education, which cost an additional $4,500 per semester, totaling $18,000 per year. Their cat, Steve, had a weekly cost of $30 in food and annual checkups and maintenance of $350.

As Katherine continued sitting in the caf petting a young cat named Niko, she couldnt help but get excited about starting a Cat Cafe in Canada. She estimates that renting the location in the city center would be around $2,500 to $6,000 a month depending on the location. The cats could likely be sourced from the SPCA, whom she has had a long-standing connection with. She is thinking of selling the idea as a creative way to boost adoption rates and potentially save cats from being housed at the shelter. Katherine plans to maintain a mark-up of 40% on all food and drinks served. To start the business, she would have to hire staff who can make artisanal coffee. She would also need a local source for quality baked goods.

Katherine is unsure of how many staff members she will need or appropriate wages. She lacks management expertise and needs an action plan for hiring and maintaining staff. Katherine is interested to learn more about specific accounting ethical principles and what she should look out for in hiring decisions, setting up well-designed processes/policies, etc.

To start, Katherine believes that 5 cats will be sufficient for the caf, as it will be open 5 days a week. She will close shop on Mondays and Tuesdays to continue her volunteering with the SPCA. Katherine doesnt want to deal with all the paperwork at the SPCA and wants to give these cats a better home as quickly as possible so she is considering just putting them in her car at the end of her shift without notifying her colleague or manager.

Katherine expects to invest all her savings into the cat caf. She is currently paying back her student loans- they charge an interest rate of 6.5%. She has diligently saved 20% of her salary since starting her career and keeps it in her chequing account- the account currently holds about $75,000. The bank recently sent her a letter about an investment opportunity that would provide 6.0% interest on a long- term savings account. Katherine was busy and used it to line the litter box.

To get the cat caf started, Katherine will need the to purchase the following (in addition to renting a store):

• $13,500 of furniture
• A $ 4,000 industrial coffee maker
• $1,400 for the point of sales systems
• $ 700 worth of cat toys and homes

After initial expenses, she expects to pay $500 per month for electricity and heating, plus another $300 monthly for cleaning. Admittedly, it will be tricky having so many cats, food, and drinks in the same space. Katherine estimates all the assets will last a total of 8 years before having to be tossed out and replaced.

Shell likely also consult a lawyer who charges a retainer of $2,000 and an hourly rate of $550. She wants to make sure that the liability issues wont be a problem.

Given all these expenses, Katherine is uncertain about pricing. She believes that there will be an average of 20 customers per day in the first year and expects this number to grow by 10% per year for 5 years and then plateau for the next 4 years.

Her partner in business school keeps talking about the importance of building a budget and doing variance analysis. Katherine just checks her bank balance once a month and as long as its still positive, she doesnt feel theres much to worry about. She doesnt understand why budgeting and variance analysis are so critical.

After calling her partner back home, Katherine realized she cannot address his inquiry about structuring the new business. Katherine just wants to run a successful business- she doesnt want to deal with decision making or bringing extra people into operations. She prefers spending her time with the cats rather than people, but maybe she can bring on her partner as an investor in the company. Katherine knows hes saving up to start his own tech start up, but she could use the $90,000 he has saved up to reduce her borrowing from the line of credit at 9.5%. Plus, he could put his degree to use and help with the numbers side of things.