Pet Therapy

Business Plan
For ACCT 3001
2016 Fall Semester
Table of Contents
Background................................................................................................................ 3
Reasons for pet therapy ........................................................................................... 4
Marketing.................................................................................................................... 5
Selling point ...................................................................................................................... 5
Target customers ............................................................................................................. 5
Pilot project ...................................................................................................................... 5
Promotion ......................................................................................................................... 6
Operations.................................................................................................................. 7
Selection of stray dogs ..................................................................................................... 7
Sterilization and Immunization ......................................................................................... 7
Training of dogs ............................................................................................................... 7
Location ............................................................................................................................ 8
Human Resource and Logistics ....................................................................................... 8
Operational Schedules ..................................................................................................... 9
Risk management measures ........................................................................................... 9
Activity Plans .................................................................................................................. 10
Evaluation ...................................................................................................................... 10
Expansion plan ............................................................................................................... 11
Projection of expansion plan .......................................................................................... 12
Financial Projections .............................................................................................. 13
Funding .......................................................................................................................... 13
Revenue ......................................................................................................................... 13
Costs .............................................................................................................................. 13
Income Statement .......................................................................................................... 14
Appendix .................................................................................................................. 15
References ............................................................................................................... 17

2
Background

With Hong Kong facing an ageing population(Graph 1) and a rise in the elderly
dependency ratio(Graph 2), the government has been setting aside an increasing portion
of its budget on the elderly, reaching HK$62 billion in 2015(Graph 3).
With more aged persons, comes higher demand for related goods and services.
Popular commodities among the elderly have traditionally been confined to
pharmaceuticals, mobility assistance products and perishable products (food, clothing
and newspapers). However, with Hong Kong enjoying high standards of modernity
and advancement, elderly fashion and tourism have sprung up (SBKH, 2016), spurring
new opportunities for the elderly to enjoy life, and for firms to open up a new range of
products and services.
However, the current state of the elderly population in Hong Kong isn’t so fine and
dandy as one would expect. The number of elderly in poverty has risen by 40,000 in
2015 to 320,000 (HKFP, 2015), which isn’t helped by the absence of a universal
pension (The Old Age Living Allowance and Comprehensive Social Security
Assistance somewhat alleviate this situation). Promisingly, this is figure only takes
income into account, and a portion of the elderly possess ample assets along with
family support. With the addition of rental/investment income and income from other
government policy (Disability Allowance, Old Age Allowance etc.), reports have put
the monthly income of the elderly at around HK$3,500(Graph 4). Even after factoring in
savings, the purchasing power of the elderly in Hong Kong is clearly low.
The elderly in Hong Kong are not only low in purchasing power, but in levels of
happiness as well. Increasing rates of depression and suicide rates of the elderly have
been attributed to loneliness, depression and the lack of financial means (IMHCPH,
2012). The government and various social organizations in Hong Kong such as the Po
Leung Kuk and the Hong Kong Society for the Aged (SAGE) have taken upon
themselves to promote the participation of elderly in society. SAGE released a report
establishing the linkage between participation and happiness among the elderly (Lam
& Lee, 2009). However, for the majority of elderly services launched by these social
organizations, participation is through invitation or membership only, and even so,
participation remains low.
The inability of the Hong Kong government to alleviate elderly depression can be
highlighted through the Government Public Transport Fare Concession Scheme for
the Elderly, a typical white elephant project launched by the government along with
several others after the handover meant to be an incentive for the elderly to participate
in more social activities. The SAGE report once again explains its inadequacy in
promoting participation (Lam & Lee, 2009). This view is echoed by Professor Jean
Woo, director of CUHK's Jockey Club Institute of Ageing, who says that the top-down
approach of policies introduced do not reflect the views of the elderly (Wang, 2015).
Therefore, our group believes that participation is key in benefitting the well-being of
the elderly, and we propose a business plan that takes our services to the elderly
themselves. Our business plan is explained in detail in the following pages of this
document.

3
Reasons for pet therapy
Kamioka et al. (2014) suggested that animal-assisted therapy may effectively cure
mental and behavioural disorders such as depression and schizophrenia. Moreover,
Bernabei et al. (2013) found that AAI has positive and favourable effects on social
interaction among elderly psychiatric patients and improves their mood disorders.
Richeson (2003) claimed the positive outcomes from AAI may not persist as AAI
discontinues. We believe that dog therapy can alleviate and prevent LLD and common
mental illnesses in the elderly.

4
Marketing

Selling point

With the support of various scientific and medical research about the effects of AAI on
elderly mental well-being and mental diseases, there should be a demand for intensive
interventions for loneliness (Galiana, 2016).

Pet Therapy has two selling points:

• Companionship
• Mental health

Target customers

Our service is provided to elderly living in care homes. We classify elderly homes into
high-end and low-end for private and public residential care homes for the elderly
(RCHEs) based on affordability and purchasing power of the residents.

Pilot project

A pilot project of the service would be held in Jolly Place and Cheerful Court. These
two homes are built under the Senior Citizen Residences Scheme of the Hong Kong
Housing Society (HKHS) with the aim of providing middle-income elderly residents
with holistic medical, recreational and housing services (Hong Kong Housing Society,
2014).

The reasons for initiating the pilot project in these two elderly homes are:
1. The residents dwelling in these two elderly homes are middle-income elderly
with relatively high purchasing power to patronize our services. Moreover, these
elderly residents usually have a relatively higher living standard and demand
for health as well as mental health. They are more likely to spend money on
extra services that can improve their health. This can also allow our business
to access and evaluate market potential and acceptance rates for the elderly.

2. They provide a wide range of personal health care services such as emotional
and psychological support. Regarding HKHS’s emphasis and concerns on the
elder residents’ health, we believe our services coincide with the purposes of
these premium elderly homes and they are more likely to cooperate with us.

In the first 4 months of our first operating year, we will find 50 customers from the two
premium elderly homes and promote our services to them.

5
Promotion

For continuous promotion, we will mainly promote our services through a Facebook
page. There will be videos filled with happy moments filmed during our services to
introduce it to audiences in Hong Kong. This promotional channel has high cost
effectiveness and wide coverage, mainly to the younger generation. The main purpose
of using this promotional channel is to draw attention and develop the culture of our
service.

Another promotional channel is directly advertising through leaflets, posters and pull-
up banners in different elderly homes. Elderly carers can introduce this new dog
therapy service to the elderly and their relatives. The elderly can thus enquire for
details in case they are interested in dog therapy and can be persuaded to patronize
our service. The promotions will be in the two premium elderly homes initially.

In the longer term, the press will be invited to interview our business. Dog therapy for
the elderly can be promoted in medical magazines, and the general public can be
informed of our business through interviews. We will also invite Radio Television Hong
Kong (RTHK) to film an episode of Hong Kong Connection (鏗鏘集) about “dog therapy
and late-life health”. Hong Kong Connection is a popular programme with a large
audience which discusses social issues. It can definitely have a large and positive
effect on promoting our service and its culture.

6
Operations

Selection of stray dogs

The SPCA humanely destroyed and homed 554 and 698 abandoned or stray dogs in
Hong Kong in 2015. Consequently, our business is established with the aim to retain
and assign meaningful missions to these dogs rather than abandoning them for animal
euthanasia. We plan to cooperate with the SPCA to adopt some potential dogs that
are eligible to participate in animal therapeutic services. Furthermore, it is a fulfilment
of corporate social responsibility (CSR) by advocating the animal rights and welfare
(SPCA, 2015).

For legal concerns, neither the SPCA’s adoption terms nor animal laws in Hong Kong
cover and mention whether the adopted dogs can participate in non-profit making
business services. In this case, we would like to present our full proposal to the SPCA
in order to seek their permission to employ adopted dogs as dog therapists.

The selection scheme:

1. Establish standards concerning qualities of service dogs
2. Shortlist dogs at around fourteen weeks of age
3. Observe and evaluate the traits and mental healthiness of dogs for a month
4. Select five dogs with the best performance

Sterilization and Immunization

Upon selection, selected dogs will receive a complete health check from veterinary
clinics. Shortlisted service dogs will receive vaccinations for rabies, DHPPIL, infectious
diseases and parasites (Hung Hom Veterinary Clinic, 2010).

Standards for sterilization will be established in accordance with the requirements from
relevant animal ordinances [Public health (animals and Birds) Ordinance, Cap 139 &
Rabies regulation, Cap. 421A]. There will be applications for animal health certificates
and dog licenses from the Agriculture, Fisheries and Conservation Department (AFCD)
under the aforementioned ordinances. This guarantees our dogs’ health conditions
are up to governmental standards, safeguarding customer hygiene concerns as well
as service dogs’ health.

Training of dogs

At about 18 weeks of age, the selected dogs will be eligible and capable to start basic
level training (SPCA, 2015).

The training will last for 4 months. A training consultant will be hired to implement
training plans and design the task-training courses. All training sessions will be held in
SPCA training centres by the private trainer. 7 hours of training is conducted per week.

According to Assistance Dogs International (2016), a minimum of 120 hours of training

is required for a service dog. Dogs, therefore, will receive courses in the four fields

7
below based on the trainer’s evaluation and their individual characteristics. It is to
ensure the service dogs are up to an international standard.

Figure 1
Overview of training courses
Source: (SPCA, 2015; Hong Kong Canine, 2016)

Location

The SPCA provides both pet boarding services and training services. For training, we
will have both the SPCA provided courses and private courses at the SPCA training
centre. Dogs will stay in rented SPCA dog boarding kennels (SPCA, 2015). A physical
office is not necessary for our business.

Human Resource and Logistics

One volunteer staff is hired to monitor the transfer of dogs by truck and one trained
volunteer staff is employed to take charge of operations in each specific elderly centre.
Our company adopts a home-based working system in which all the staff have clerical
and administrative work through an online database showing operational details and
working schedules. A video conference is held every two weeks to evaluate the
working progress. This system allows flexible working hours for the volunteer staff and
eliminates the rental expense needed for a physical office, which helps in minimizing
operational costs.

The Go-go van service is responsible for all the transfer of dogs.

Figure 2
Logistics flowchart

8
Operational Schedules

• Health check and vaccination schedule:

For puppies under 1 year of age, they are taken to the clinic every three to four
weeks for health checks. For older dogs, there are bi-annual check-up sessions.

Vaccination sessions follow the schedule below (Figure 3) for dogs in various
age groups

Figure 3
Schedule for dog vaccinations
Source: (SPCA, 2015)

• Dog training schedule:

(Refer to above section: Training of dogs)

• Elderly home service session schedule:

Two service sessions are proposed for each elderly home per week. In each
service session, there are a total of 2 hours of dog therapy, which is divided into
two sections with breaks in between for the dogs to rest. We aim to provide
around 17 service hours for each elderly home every month.

Risk management measures

• Preventing dog bites: The service dogs are required to observe the highest
quality of obedience training. This is to make sure the dogs’ temperament and
actions are under control during the elderly home service. Additional trained
staff will be stationed at target elderly homes to give advice on suitable methods
to interact with dogs. They always stay alert in case of emergencies. For
example, the staff must intervene when the dogs are acting abnormally, or
when the elders are not treating the dogs with appropriate manners.

• Health and hygiene: Volunteer staff will be monitoring the services performed
by the SPCA boarding section. These include a bath for each dog every month
to ensure their skin and fur are free of parasites, serving of healthy dog food
every day to maintain the health of the dogs, and regular sanitation services
performed by cleaning staff to avoid the spread of diseases. Service dogs are

9
 taken to veterinary clinics for regular health check-ups as scheduled. This can
provide timely cures for animal diseases and adopt suitable preventive
healthcare measures.

Activity Plans

Prior to the first service session in each elderly home, forms are distributed to the
elderly to identify possible cases of dog allergies or cynophobia. Staff are responsible
for inquiring the nurses to see if the elderly suffer from any hidden illnesses by double-
checking illness records. We remove elderly with relevant illnesses from the dog
therapy service.

Considering the mobility and agility of the elderly, the elderly is expected to play a
passive role in the service. The dogs are mainly trained to socialize with the elderly
proactively. Throughout the event, the dog trainers will be following the dogs for safety
purposes and to motivate the service dogs.

The activity plan comprises of two sessions:

Figure 4
Activity plan

Evaluation

Feedback is collected from the on-site monitoring team to see if there are necessary
adjustments to service content and logistics arrangements. The review system boosts
the effectiveness and efficiency of our elderly home services. Opinion cards are given
to the elderly after the service to assess whether the service has achieved its goals.
For example, elders are asked to rate the quality of the activities and write how they
feel throughout the event (process may be assisted by elderly home nurses). This
allows us to reflect on possible room for improvement. It also helps us align with
expected targets and outcomes of dog therapy:

• Mental benefits: Lower stress and tension, secure and friendly feelings through
intimate human-animal interactions.
• Physical benefits: Foster an optimistic and well-balanced elderly lifestyle with
integrated social connections and reasonable amount of vitality.

10
Expansion plan

Figure 5
Expansion plan
The expansion plan is mainly based on four rationales.

Figure 6
Overview of expansion rationales

11
Projection of expansion plan

Assuming that the responses for the service of the first year are positive and reveal a
larger market potential, we will expand our service to cover 4 elderly homes in total,
with each elderly home contributing 50 customers in the second year. For the third
year, we projected to have 75 customers from each elderly home as the service
develops its culture and popularity. For the fourth year, we anticipated our service
covering up to 6 elderly homes with each elderly home contributing 100 customers.

Number of elderly homes covered by our service:

Figure 7
Projected elderly home coverage for expansion plan

12
Financial Projections

Funding
Our business has a total of HK$1M internal capital for our first two years of operations.
However, as the start-up cost is quite high, external funding like online donations and
government subsidies are essential in order to sustain our business by getting more
capital. GoGetFunding is a typical example of an online donation platform for
individuals and non-profit making organizations to share their ideas and receive
funding. With regards to government subsidies, we found that the idea of our business
model is quite similar to two funding targets and objectives, namely the SME
Development Fund and Impact Incubator Funding. Therefore, to play it safe, we
assume that we successfully apply for one of the two. According to the amount of
funded projects shown on the SME Development Fund’s website and the history of
campaigns posted on GoGetFunding, we estimate that we would be able to get around
HK$800K in government subsidies and HK$200K from online donations. To conclude,
we will have about HK$2M for our first year operations.

Revenue
Our revenue mainly comes from monthly tickets sold to the elderly. In terms of monthly
fees, we will charge HK$200 for elderly living in premium housing and HK$100 for
elderly living in public housing.

Costs

Figure 8: Cost structure of business

Significant costs to our business are detailed above. We will be using SPCA’s boarding
pet service, negating the need to hire professionals to take care of our dogs. It will cost
HK$200 per day for one dog. We also decided to form a business partnership with
GoGoVan, paying HK$250 per round trip for transporting five dogs. For the
consultation cost, we will invite a professional dog trainer to design a unique blueprint
for our tailor-made elderly service training program. It will be a one-off HK$30,000 cost
to be used in the early stage. We will also employ professional trainers, working
project-based, to train our dogs. It will cost around HK$200,000 for the whole training
process on salaries. Moreover, we will pay HK$40 per hour to part-time workers for
taking care of our dogs when they are on service. Regarding marketing costs, we

13
market to the elderly directly by filming videos which promote our business culture, as
well as printing handouts. We will spend HK$10,000 on it each year. There are also
some minor costs like health checking, dog food, administrative costs, insurance etc.

Income Statement

Figure 9: Projected Income statements

Referring to the income statement, we will experience over HK$500K in loss in the first
year because of the high training cost and the fact that we will only serve fifty elderly
per year as a trial run. Subsequently, we will target two hundred elderly in the second
year and expect to generate HK$200K in revenue. In the third year, as our business
is becoming more mature, we would be able to provide better service in order to
maintain our existing customers as well as attract potential customers, and we may be
able to break even through fully utilizing our capacity. It is critical that we estimate
future market demand through conducting market research, as our findings would
determine whether we should adopt more dogs to increase our capacity in the fourth
year. If we adopt five more dogs, the pet boarding service costs, logistics costs and
salary of workers will be doubled, along with additional HK$200K in training costs, but
we would still achieve breakeven if we fully utilize our new 10-dog capacity in the long
term. However, if expected future demand is not promising, we would consolidate and
optimize our services in order to maintain the sustainability of our business.

14
Appendix

Graph 1:

Graph 2:

Graph 3:

Information contributing to graphs 1-3 are from

http://www.gov.hk/en/about/abouthk/factsheets/docs/population.pdf

15
Graph 4:

(Retrieved from: http://www.oxfam.org.hk/content/98/content_8814en.pdf )

16
References

Assistance Dogs International. (2016). Training programs. Retrieved 18th November,

2016 from http://www.assistancedogsinternational.org/standards/training-
programs/

Bernabei, V., Ronchi, D. D., Ferla, T. L., Moretti, F., Tonelli, L., Ferrari, B. Forlani, M.
Atti, A. R. (2013). Animal-assited interventions for elderly patients affected by
dementia or psychiatric disorders: A review. Journal of Psychiatric Research,
47(6) 762-773.
http://dx.doi.org/10.1016/j.jpsychires.2012.12.014

Kamioka, H., Okada, S., Tsutani, K., Park, H., Okuizumi, H., Handa, S., Oshio, T.,
Park, S. J., Kitayuguchi, J., Abe, T., Honda, T., Mutoh, Y. (2014). Effectiveness
of animal-assisted therapy: A systematic review of randomized controlled trials.
Complementary Therapies in Medicine, 22(2), 371-390.
http://dx.doi.org/10.1016/j.ctim.2013.12.016

Lam, K & Lee, T. (2009). Elderly participation and empowerment: experiences of

SAGE. Retrieved 17th November, 2016 from
http://commons.ln.edu.hk/apiasmp/21/

Lee, S. (2016). The Silver Hair Market: A Golden Opportunity for Business.
Retrieved 17th November, 2016 from http://sustainablebusiness.org.hk/silver-
hair-market-golden-opportunity/

Richeson N. E. (2003). Effects of animal-assisted therapy on agitated behaviours

and social interactions of older adults with dementia. American Journal of
Alzheimer’s Diseases and other Dementias, 18(6), 353-358. Retrieved 18th
November, 2016 from http://aja.sagepub.com/content/18/6/353

Society for the Prevention of Cruelty to Animals. (2015). SPCA Annual Review 2015,
4. Retrieved 18th November, 2016 from https://www.spca.org.hk/en/about-
us/annual-review

Society for the Prevention of Cruelty to Animals. (2015). What is animal welfare?
Retrieved 18th November, 2016 from https://www.spca.org.hk/en/animal-
welfare/what-is-animal-welfare/five-freedoms

17
Society for the Prevent of Cruelty to Animals. (2015). B & T training course details.
Retrieved 18th November, 2016 from https://www.spca.org.hk/en/services/dog-
behaviour-and-training/course-details

Society for the Prevent of Cruelty to Animals. (2015). Pet boarding service. Retrieved
18th November, 2016 from https://www.spca.org.hk/en/services/pet-boarding-
service

Society for the Prevent of Cruelty to Animals. (2015). Essential vaccinations.

Retrieved 18th November, 2016 from
https://www.spca.org.hk/en/veterinary/preventative-pet-health/essential-
vaccinations

Tsang, E. (2016). Over 10 per cent of Hong Kong elderly persons show signs of
depression, survey finds financial pressure and relationships cited as main
sources of stress. Retrieved 18th November, 2016 from
http://www.scmp.com/news/hong-kong/health-
environment/article/1907974/over-10-cent-hong-kong-elderly-persons-show-
signs

Hong Kong Canine. (2016). Services. Retrieved 18th November, 2016 from
http://www.dogtraininghongkong.com/services/

Hong Kong housing Society. (Dec, 2014). Senior Citizen Residences Scheme.
Retrieved 18th November, 2016 from
http://www.hkhs.com/eng/business/senior_pm.asp

Hung Hom Veterinary Clinic. (2010). Dog vaccination. Retrieved 18th November,
2016 from
http://www.hhvc.com.hk/en/pet/main.do?mappingName=Dogs&method=detail&
id=4028e48624d70d760124e7ad73160066

Wang, J. (2015). How to redesign Hong Kong for its growing elderly population.
Retrieved 17th November, 2016 from
http://www.scmp.com/lifestyle/health/article/1886427/how-hong-kong-jockey-
club-helping-citys-ageing-population

18
Wong, M. (2012). Elderly Depression. Retrieved 17th November, 2016 from
http://www3.ha.org.hk/cph/imh/mhi/article_02_02_03.asp

Zeng, V. (2015). Poverty population among seniors on the rise. Retrieved 17th
November, 2016 from https://www.hongkongfp.com/2015/09/08/poverty-
population-among-seniors-on-the-rise/

19