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Creature Comforts

Pamper pets for profit
July 1, 1999
URL: http://www.entrepreneur.com/article/17904

When Jodi Jaunich's dog, Kasey, got sick from a food allergy, the 29-year-old Chicago pet owner spent months researching nutrition and holistic treatments for animals. Convinced health foods and alternative treatments could benefit four-legged creatures as much as the two-legged variety, she quit her job as a business consultant, took $50,000 of her own money and opened Galloping Gourmutts, a combination bakery and health-food store for animals and their health-conscious owners.

In addition to offering a variety of all-natural supplements and remedies for common ailments like kennel cough and ringworm, Galloping Gourmutts sells bakery treats Jaunich makes (and taste-tests) herself--goodies like canine cannolis, drumsticks, pretzels and bagels loaded with ingredients like cheese, peanut butter, veggies and apples. Opened in late 1997, the store rang up close to $150,000 in sales its first year, and Jaunich projects sales of $200,000 by the end of 1999.

In the $21 billion-a-year pet industry, there seems to be no limit to how much people will spend on their animals and no end to their quest for new and different products or services to make Fuzzy or Fifi happy. There are businesses that will throw pets birthday parties, take studio-quality portraits of them and even make Fido a star: One Chicago-area entrepreneur runs a modeling agency just for animals. And when all the fun is over, professional pooper scoopers will step in, so to speak, to clean up what's, er, left over.

"People are addicted to their pets," says C.C. Risenhoover, publisher of Pet Life, a magazine in Fort Worth, Texas, "and they'll make sacrifices, even in a difficult economy, to care for them,"

Pet Plethora

For purveyors of pet paraphernalia, there doesn't seem to be any saturation point in sight. With 66 million American households owning two or more pets--or "companion animals," as those in the industry call them--the demand for cool products for pets will continue well into the new millennium.

That's excellent news for entrepreneurs like 31-year-old Kristi Kirsch, owner of Cool Pet Stuff.com, an online pet products business she runs from her home in Newport Beach, California. Started in May 1998 with $20,000, Cool Pet Stuff.com has already racked up more than $50,000 in sales selling 150 unusual items not typically found in pet stores, such as cat drinking fountains, backpacks for people to carry their dogs in, luggage to carry cats, bathrobes for dogs, toothbrushes for dogs and cats--even an original watercolor portrait of your pet for $425.

Kirsch and her husband, Steven, were initially looking for a business that would bring in some extra income but would allow her to stay home and raise their young daughter. As animal lovers and the owners of a beloved terrier named Pablo, they latched on to the pet industry because of their personal interest and the industry's seemingly huge growth potential, which appears impervious to economic conditions.

A cyber-business was a perfect choice because it has allowed Kristi to work from home and, at the same time, reach potential customers around the world. Steven still works full time as a dentist but helps her fill orders and update the Web site on the side. Within the first seven months of operation, Cool Pet Stuff.com had filled orders from customers across the United States and in Japan, Brazil, Puerto Rico, Argentina and Canada.

As long as a pet product is new, different and serves a function, it will sell, according to Funda Alp of the American Pet Products Manufacturers Association. Popular items at the association's huge annual trade show include tennis balls with a built-in minty breath freshener for your dog, cat hammocks, and organic veggie burgers for reptiles with discerning palates. "There are a lot of unusual products out there, but when you boil it down, they all [have a common goal]: to make pets happy and comfortable in a human environment," Alp says. In addition to novelty and function, she adds, pet owners are looking for products that are well-designed, colorful and aesthetically pleasing.

Furry Friends

Successful entrepreneurs in the industry are usually pet owners, and their ideas for businesses are as varied as the animals themselves. Some pet businesses, especially those that offer a service, can be started on a shoestring budget. That's how Cindy Kaminsky, fed up with her job in the advertising industry, started For Dog's Sake, a dog-sitting service with a twist: She takes her charges on "field trips" to the mountains and beaches around Los Angeles.

To get started, the Marina del Rey, California, entrepreneur traded in her sports car for a Chevy van, hung magnetic signs on it, bought some business cards and began marketing her service through groomers, veterinarians and pet stores. Kaminsky screens canine clients ahead of time to make sure they'll obey commands. She charges $20 per dog for a one- to two-hour outing, including pickup and drop-off; two dogs cost $30.

"I knew I didn't want to do standard pet-sitting," explains Kaminsky, 35. "I loved the idea of taking groups outdoors and all of us [including her dogs, Bear and Daisy] getting some exercise. In a year, I'd like to buy a piece of land, get a pool and start a day camp for dogs."

Jay Bloom, 31, conceived of a business that focuses on pet services, particularly health care, after his dog, Lucky, underwent a $3,000 surgery for hip dysplasia, and Bloom made the unhappy discovery that pet insurance would not cover the procedure.

Anxious to get off the "merry-go-round" at the bank where he worked as a financial officer, in 1996, Bloom started Pet Assure, a Dover, New Jersey, company that sells memberships offering direct savings on veterinary care and pet products and services, including groomers, walkers and sitters. The cost of an annual membership is $99 for the first pet and $79 for each additional pet; unlike standard pet insurance companies, Pet Assure requires no deductibles and doesn't exclude any animal because of a preexisting condition.

So far, more than 1,500 vets in 40 states participate in the program. "The biggest challenge," Bloom says, "has been to get vets to understand how they benefit from giving discounts on their services. The upside for them is that [participating] helps build their client base, and they become part of our company's profit-sharing plan."

Last year, Pet Assure logged sales of $1 million; with a new, more aggressive marketing plan in place, Bloom hopes to reach $4 million and have 6,000 vets on board by the end of this year. An endorsement from the ASPCA has helped the company grow, and Bloom has convinced a number of corporations, unions and associations to offer Pet Assure as a perk for employees or members. Users of the Pet Assure credit card get membership benefits for free, and issuing banks benefit because people will use the card more often, Bloom says.

Bloom, who is considering going public, says he has no serious competitors at the moment and isn't concerned about potential copycats. "It doesn't hurt Met Life that Prudential is out there," he says. "Competitors would just create more awareness of the industry."

Reigning Cats and Dogs

Americans are pet-crazy; 59 percent of all U.S. households have some kind of pet. How many furry friends, you may ask? Here's the breakdown:

Source: American Veterinary Medical Association

Pet Projects

How do you know if there's a market for your pet business? One of the best sources for industry information is the American Pet Products Manufacturers Association. The association's most recent survey of pet owners nationwide numbers 300 pages and gives details about buying habits and preferences, with information broken down by region. Cost: $200. To order or for more information about the association, call (800) 452-1225 or visit http://www.appma.org

Contact Sources

Cool Pet Stuff.com, (800) 686-6599, http://www.coolpetstuff.com

For Dog's Sake, (310) 821-5342

Galloping Gourmutts, (773) 477-5959, fax: (773) 477-6393

Pet Assure, (888) 789-7387, http://www.petassure.com

Pet Life, (817) 215-9132

Pamela Rohland (prohla@aol.com) relies on four felines to help her run her Bernville, Pennsylvania, homebased writing business.