Dog Dynasty: Dogtopia is on the Cusp of Major Growth

Amy Nichols has always loved working with animals. In high school she worked in a pet store. In college she worked in a biopsychology lab with birds. But she always thought she would have to find a "real job" after graduating from college.

"Growing up and living in the Northern Virginia area put me right in the middle of the telecom industry," says the 39-year-old founder and CEO of Dogtopia. "It gave me great exposure to big business--both the good and bad sides--and really helped prepare me for founding Dogtopia." Despite her success in the telecom industry, she didn't find that life fulfilling. That's when she returned to her love of animals and the light bulb went on: there was a big need for dog daycare, and few were providing it.

She funded Dogtopia in June 2002 by selling her first home and taking out an SBA loan. "I knew there was a market for a business like this in the heavily populated D.C. area," she says.

The idea worked. In her second full year of business, Dogtopia generated more than $1 million in revenue. That's when Nichols knew she was on to something and had to figure out how to grow it. She attended an IFE event and was franchising her fledgling company by early 2005.

Growth was slow but steady for the next few years until the economic meltdown. She says the company hunkered down and focused on operations and support during this time. But she also began to recognize that the old ways of franchising development weren't really working any more.

"Growing our brand one unit at a time was not the most efficient way for us to expand," she says. So when she was approached by an equity partner, the timing, his experience, and the strategies he brought to the table were just what Nichols was looking for. Together, they created new strategies and approaches, most notably a new regional director expansion model.

"We now have three regional directors on the ground who are selling and supporting our brand in San Diego, Orange County, and Colorado," she says. This model gives the company a representative who can work a territory, earn a percentage of the royalties, and support the franchisees in that territory. Nichols says she would eventually like to have as many as 30 regional reps across the country.

For now she remains the majority owner and passionate brand leader. With four children (and innumerable canine customers), she manages to balance her business and personal lives--with some very important help. "My husband is my partner, and together we make it all work," she says.

Dogtopia recently launched an expansion initiative in Canada, and Nichols has set a goal of reaching 400 total units open or in development by 2020.

"It's a great time in our company's evolution," she says. "With our new equity partner and regional director strategy in place, I think we are going to experience significant growth."

Name: Amy Nichols
Title: Founder and CEO
Company: Dogtopia
Units: 27 stores, 4 in construction (Q2 openings), 4 in development, and 3 new Regional Directors representing 37 locations
Age: 39
Family: Married with 4 children, 2 boys and baby girl twins born last November
Years in franchising: 8
Years in current position: 8

Leadership

What is your role as CEO?
To guide the ship that is Dogtopia. First I have to figure out where we are going, but then I need to be aware of the many things affecting our ability to get there and regularly course-correct and adjust as we go.

Describe your leadership style.
Inspirational is what I aim to be. I want my team and our franchisees to do their best because they feel excited and motivated to grow and develop Dogtopia. Once you have a motivated and committed group of people, there are few things you can't accomplish!

What has inspired your leadership style?
I am a naturally passionate person and I try to harness that energy and use it in a positive manner to inspire others. I know I am personally at my most effective and productive when I am inspired, so I try to do the same for my team. Sometimes my inspiration comes from reading a great article in Inc. magazine, watching an amazing TED talk, or meeting fellow entrepreneurs.

What is your biggest leadership challenge?
We just began offering regional developer agreements and are entering a period of rapid growth. We can't predict the future, but with three regional developers already on board, we now have more stores in development than we have open. This is a big change for us, as our growth has been relatively slow and steady over the last couple of years. This is a terrific "problem" to have, and I am really excited to grow our home office team. We are adding positions and support that we have always wanted to provide, but were previously not large enough.

How do you transmit your culture from your office to front-line employees?
Our culture started on the front lines. When I first created our company values, they were based on my role at that time as CEO/store manager. I wanted a way to transmit to my employees not just what we do, but why we do it the way we do. When we decided to franchise the company, those same values applied in our relationships with our franchisees. To this day our company values of honesty and integrity, responsibility and accountability, exceptional customer service, active community service, passionate enthusiasm and unlimited potential are used to guide us in all company decisions.

Where is the best place to prepare for leadership: an MBA school or OTJ?
Learning from case studies is certainly valuable, but learning through experience is more meaningful and therefore more memorable. I often say that we all make mistakes; that is how we know we are pushing ourselves, but the goal should be to learn from it so that we don't repeat it.

Are tough decisions best taken by one person? How do you make tough decisions?
Ultimately someone has to be accountable for every decision made by the company. But you make better decisions when you gather information from a variety of sources first: team members, franchisees, and trusted advisors. You weigh it all out, make the decision, and be ready to defend it.

Do you want to be liked or respected?
Respected for sure. You are not going to make good business decisions if you are worried about being "liked." That being said, I set the tone of my company and our office, and being positive and supportive is an important part of my role.

Advice to CEO wannabes:
It can be lonely at the top, so surround yourself with advisors and mentors who can help you through the tough decisions that only the CEO can make. Having a peer group like the Women Presidents' Organization is invaluable--not to give you the answers, but to share experiences and provide perspective. I have also found the IFA and their annual conference to be an invaluable resource.

Management

Describe your management style.
Collaborative. I do some of my best thinking "out loud" so I have found that being able to verbalize my thoughts and bounce ideas off fellow team members is very effective.

What does your management team look like?
Eclectic. We have gathered a diverse group of people, but with the same core values. Diversity leads to creativity and a variety of ideas and solutions, and the core values provide the strong foundation to keep us focused on the big picture.

How does your management team help you lead?
I couldn't do my job without them. For me to be effective in my role, I have to work through my management team. We agree on collective goals, and I leave it to them to decide how to best achieve them. They then take those goals to their teams and guide them to meeting them at the store level. I have also found it important that my whole team understand the FDD and franchise legal compliance. Our franchise agreements govern our relationship, so it is really important that everyone knows and understands it. To that end, my two vice presidents and I received our CFE designation at the recent IFA conference.

Favorite management gurus: Do you read management books?
As much as I can, often while I am traveling. Right now I am reading Great by Choice by Jim Collins. I am a big fan of Good to Great and have often found myself using some of his vernacular: getting the right people on the bus, and having BHAGs (big hairy audacious goals) to train yourself to think bigger. I am also a big fan of Seth Godin. He provides very interesting and thoughtful insight into the future of marketing, customer service, and entrepreneurship. I enjoy reading his daily blog posts in the morning as another way to get my head in the game and prepared for the day ahead. Last, I find perspective to be one of the most important things in business (and life), so I enjoy reading books that are thought-provoking such as The Alchemist and Manual of the Warrior of Light by Paulo Coelho. You can read his books many times and get something new or different each time.

What makes you say, "Yes, now that's why I do what I do!"
There are two things that get me pretty pumped up. To this day I love seeing morning drop-off and evening pick-up--our lobbies are very happy places. Dogs can't help but do everything with enthusiasm. They are thrilled to come in for daycare in the morning and they are thrilled to see their "parents" at night. You can't help but feel good when you see that kind of pure joy. The other thing that gets me pumped is seeing a franchisee at their grand opening. Looking at a beautiful new location with a very proud owner is really fulfilling and makes me very proud of Dogtopia.

Personal

What time do you like to be at your desk?
I don't usually arrive at my office until about 10 a.m., but I start checking emails and planning my day from the time I wake up. I have twin baby girls, so I like to spend some time with them in the morning before heading into the office. By the time I arrive, I have already answered numerous emails and queued up phone calls and meetings for the day.

Exercise in the morning?
Does climbing 12 flights of stairs count? We recently created the "No Elevator Challenge" in my office in an effort to get in better shape. I am on day four. So far, so good!

Wine with lunch?
Nope, Diet Coke or water for me.

Do you socialize with your team after work or outside the office?
No, I think they need and deserve downtime. I try really hard to respect their personal time and contact them in the evening or on the weekends only if it is absolutely urgent. We have an understanding that if it is urgent I will call or text them; if I email, it can be answered the next business day.

Last two books read:
Peter Thomas, Dogtopia's new business partner, has written several books. Most recently I read his book, Be Great: The Five Foundations of an Extraordinary Life; and The Power of Habit by Charles Duhigg.

What technology do you take on the road?
My iPhone and my iPad for short trips. I also take my MacBook if it is more than a day or two.

How do you relax/balance life and work?
I believe that balance should be the goal in all things, but when you are a CEO and/or the owner of the company, it is all just "life." Still, I try hard to have my evenings and weekends be family time and only "work" after the kids are in bed. I don't want my kids' memories to be of Mommy on her laptop. I want them to know that when I am with them I am there both mentally and physically.

Favorite vacation destination:
We go to the beach every summer for a week and it has become a family tradition. We also try to take one big family trip each year and are hoping to go on more international trips as our kids get older.

Favorite occasions to send employees notes:
I like sending thank-you cards--not for big things, but for just being awesome at their job. I have room for improvement on this. I think about how thankful I am for my team all the time, but I could be doing a better job of sharing that with them. Could you do me a favor and print the following? "Thank you Dogtopia home office team for making my job so rewarding and for making me look good!"

Favorite company product/service:
It has to be daycare. That is our core business and it is really what we are all about--open play that promotes socialization, exercise, and fun!

Bottom Line

What are your long-term goals for the company?
To have 400 stores open or in development by 2020. We are just starting to hit our stride, and I really look forward to continuing to grow the company and finding more ways to maximize efficiencies and economies of scale.

How has the economy changed your goals for your company?
In 2009 franchise sales slowed and then disappeared. At that point we chose to focus all our time and money on operational support for our franchisees and put sales on the back burner. We made great strides, and the processes and structure we put into place prepared us for the equity partner we took on last year to grow more quickly using regional developers.

Where can capital be found these days?
Dogtopia is on the SBA Registry, and while that is still a resource to assist with obtaining a business loan, we are seeing a lot more alternative approaches now. Many more franchisees are using their 401(k), bringing on investors, or having family members go into the business with them. I believe confidence has been restored in small-business ownership as a smart investment. Now the financial markets just have to get the message!

How do you measure success?
In business, it is easy to measure the dollars; it is harder to measure the relationships. But at the end of the day that is what it is all about--relationships. When I started Dogtopia, one of the things I was most excited about was that I would get to choose who I worked with. When we franchised Dogtopia, we got to choose who would be our franchisees. To be able to spend my days working with and supporting people who are committed, engaged, and motivated to make Dogtopia the best it can be, that is success to me.

What has been your greatest success?
Creating a sustainable business model that others have been able to successfully replicate and use to create wealth makes me very proud. On the personal side, I cannot imagine my life without my family, and I look forward to my children becoming my greatest success.

Any regrets?
It has been a wild ride, but I wouldn't change a thing because it all added up to where I am today.

What can we expect from your company in the next 12 to 18 months?
Very exciting times at Dogtopia! With our new equity partner we have been able to strengthen our support ahead of our growth, including creating an Online University, conducting a thorough study of our customer base to evaluate potential markets and regions, and add key members to our home office team. We are ready to take Dogtopia to the next level!