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How to Start a Pet Business

If you love all the creatures of the earth, starting one of these pet-related businesses might put you on the path to success.
February 1, 2008
URL: http://www.entrepreneur.com/article/190440

Editor's note: This article was excerpted from our Pet Businesses start-up guide, available from Entrepreneur Bookstore.

When you think back to your childhood, is there a warm and fuzzy memory of a four-footed or winged companion in whom you confided your deepest secrets? Do you gaze into pet-store windows and vicariously tickle the puppies under the chin? Or have you ever considered buying a sweater for your horse, some galoshes for your cat, or some Armor All for your armadillo? If so, then you understand what it means to be a pet lover-and that's probably why you're interested in starting a career in the pet-care industry.

As you no doubt know, we Americans are in love with our pets. In 2004, we spent $34.5 billion on our cats, dogs, birds, fish, horses and other pets, according to the American Pet Products Manufacturers Association (APPMA). In 2005, that figure is expected to jump by another $1.4 billion, continuing a decade-long trend of pet-spending increases.

This is good news for aspiring pet-care business owners like you. No matter whether you're interested in providing hands-on pet care or selling pet products like toys, food and treats, the prospects for success in a pet-care business are excellent.

"The strong growth in the [pet-care] industry demonstrates what an important role pets are playing in the lives of Americans," says Bob Vetere, APPMA COO and managing director. "They have become a part of the family. Spending across all sectors, from pet food and veterinarian care to toys and treats, reflects what lengths we are willing to go to for our pets."

It's not hard to figure out why pets are so pampered and integral to people's lives. They bring us joy, they love us unconditionally, and they even lower our blood pressure and give us a sense of well-being. They also fill the aching void left when children leave the nest or a spouse dies; for childless couples, a pet is "someone" on whom to lavish affection and gifts. Many people consider their pets their "kids," and even relate to them better than they do to people!

This love of pets is also often the reason why people decide to start pet-care businesses. "We started our business with the intent to help animals and to point people in the right direction to help animals," says John Zambelli, owner of NaturesPet.com, an online pet-food business in Elmwood Park, New Jersey, that specializes in all-natural pet food. "By feeding pets properly, you give them a good shot at a healthful life. This type of business was the right thing to do for us, and we knew the money would follow."

In the Pet Businesses start-up guide, you'll find the advice you need to start one of five different types of pet-products and pet-service businesses that are in demand today: pet sitting/dog walking, dog training, pet grooming, pet-food sales and upscale pet products. Each of these businesses can be started as homebased enterprises with a fairly low financial investment. Two can be started as strictly internet businesses to really keep costs low. And all of them can be launched and run successfully by the owner, without any assistance from employees-at least until the time comes when you want to grow and expand the business beyond what you can personally handle.

Read on for a look at the five types of pet-care businesses discussed.

Pet Sitting/Dog Walking
If you are charmed by all things furred, feathered and finned, this is the profession for you. As a professional pet sitter, you will care for people's pets while they're away, either for the day or for longer periods of time like during vacations or business trips. Pet sitters play with their charges, feed them, brush them, and possibly give them medication or injections. They often offer other services to make life easier for their customers, like cleaning up accidents and changing cat litter boxes, bringing in newspapers and mail, watering plants and taking out trash.

Dog walkers take pooches out for their daily constitutional one or more times a day, either individually or in small groups. In some cities across the United States, like New York, dog walking alone can be a booming business. But it's actually more common for dog walkers to offer additional services, including playing with and feeding pets, bringing in newspapers and mail, and turning lights on and off.

Both pet sitting and dog walking are still in their infancy as recognized professions. According to an industry expert, only 3 percent of households nationally use a pet sitter or dog walker. Even so, that adds up to 50 million to 60 million visits annually, according to the same source-and that number is on the rise. In fact, the outlook for pet sitters and dog walkers has never been better. Some estimates put the number of bonded and insured pet-sitter businesses nationwide at 10,000 (regrettably, there are no stats on the number of dog walkers).

The field is wide open, so now is a great time to jump in with both paws.uh, feet!

Dog Training
Part instruction, part psychology, the field of dog training requires great people skills as well as a love of canines. Dog trainers will tell you that you're not just training the pooches-you're also training the folks who live with them. So you have to be able to talk to them kindly, deal with them patiently and reinforce their behavior-then do the same with their furry friends. While a background in psychology can be helpful, a true love of both people and pets and a desire to help them goes a long way to ensure success in this career.

While there are no statistics on the number of dog trainers in the country because the profession is not licensed, the Association of Pet Dog Trainers has about 5,000 members. And with an estimated 74 million dogs in America, there's lots of room for good trainers to enter the field.

Pet Grooming
From bathing and clipping to tying bows and cleaning ears, the nation's approximately 50,000 to 70,000 pet groomers do more than just change pets' appearance-they also make them feel better both physically and psychologically. The loving touch of a groomer can calm a skittish pet, reassure a frightened pet, and make a well-adjusted pet wriggle with pleasure. In addition, groomers are often the first to notice that a pet has a skin condition, ear mites or other medical issues that should be brought to the attention of a veterinarian.

In addition to having a true love of animals and enough physical strength to lift big boys and girls onto grooming tables and into tubs, groomers must be behaviorists who know how to handle biters and scratchers. They also need the same kind of patience and good humor when relating to pet owners, so a general love of humankind is a necessary trait for a groomer.

Demand for pet groomers is expected to rise 12 percent by 2010, according to the U.S. Bureau of Labor Statistics. Petgroomer.com, the industry's largest internet resource, reports that career opportunities are nearly endless because there are more than 4,000 dogs and cats for every U.S. grooming business-making this a great time to be considering this field.

Pet Food/Treats
Whether it's brick-and-mortar or virtual, a pet store that specializes solely in pet food and treats can be a great moneymaker. Many pet owners today are willing to spend top dollar to buy the best of everything for their "fur children," including food and treats. Your challenge, then, is to find a niche, such as all-natural food products, and offer a wide assortment so you can position yourself as a leading provider of these items.

And you'll have plenty of products to choose from. There are all-natural (that is, human-grade) foods, specialty foods for diabetic pets or pets with kidney problems, and raw-food diets, as well as food for pet birds, livestock and exotic animals like snakes. There are even bakeries that specialize in making dog biscuits and other tasty treats. In addition, some pet-food stores choose to stock other pet-related products, like collars and leashes. Whether you should do so, too, depends on how much you can afford to sink into your inventory and how much room you have to stash the products until they're purchased or shipped out.

According to statistics from the U.S. Census Bureau, there were 15,890 pet and supply establishments in 2001 (the latest year for which data is available), with sole proprietorships numbering 7,945. The Census Bureau doesn't capture information about how many of these establishments are internet-based, but you can be sure that no matter how many there were then, the number is growing now because an online store is such a cost-effective way to start a pet-food business. There's virtually no building overhead if you work out of your home, and it's possible to make arrangements with manufacturers to drop-ship product (that is, arrange shipping directly from the manufacturer to your customer) so you don't even have to store and ship the product yourself. All you need is a merchant account to accept credit card payments or a PayPal account, and you can ship products all over the world.

The cost to establish a site-based store obviously is higher, but it may be the right choice for some. By specializing in one type of product, you can keep the store fairly simple (basically, four walls with shelves). The key will be to find a good location and the right product mix, as well as a great staff to assist you when it comes to keeping the business running.

Upscale Pet Products
The urge to splurge on pet clothes, toys and other goodies has been around for a while now. But ever since Hollywood starlets started carrying their pooches around in designer bags and tucking them in to sleep under silk comforters on custom-made beds (and getting press for doing so), the upscale pet-products industry has exploded. Doting owners can now adorn their pets with rhinestone tiaras, pearl collars and cashmere coats. They can wheel them around in luxury strollers or tuck them into glove-soft leather totes.

As with a pet-food business, it's possible to sell products to the public entirely through a website. But you could also sell exclusively to retail outlets like pet boutiques or pet stores. Or you can open your own retail location. If you establish a store and your product mix is truly exclusive and expensive, you'll probably be more successful if you open in a resort area, in or near an upscale neighborhood (can you say, "Rodeo Drive?"), or in an exclusive mall. The rent in the locations may be very pricey, but it will be worth it when you reach people with a lot of discretionary income and the desire to lavish it on their best friend(s). Some of these business owners choose to manufacture the products they sell, which you'll find out later isn't as difficult as it might seem. "Manufacturing gives you more control," says Exton, Pennsylvania, pet-product manufacturer Joyce Reavey. "I know I won't run out of inventory, and I always know what the quality is like. That's important to me."

 

How to Start a Pet Business

Target Market

According to Pet Age magazine, more than 6 out of 10 U.S. households, or 64.2 million, own at least one pet. Not all these households have designer pet strollers on the driveway or marabou-trimmed beds in the master bedroom, but enough people were buying products to pamper their pooches and kitties to make the pet-supplies industry a $5.86 billion market in 2003. Market research company Business Communications Co. predicts that by 2008, pet supplies will be a $7.05 billion industry, with an average annual growth rate of 3.8 percent. And while there are no statistics available specifically on the upscale pet-products industry, it's safe to say that the people who are selling these products are taking a big bite out of that prosperous market.

Upscale pet products run the gamut from the sublime to the sometimes ridiculous. There are ferret hammocks, faux mink dog blankets and cashmere sweaters, Halloween costumes and Santa suits, and plush beds shaped like Faberg eggs (the latter is the charming creation of one of the entrepreneurs interviewed for the Pet Businesses start-up guide). Other upscale pet products now in demand include jewelry (both barrettes and necklaces), wedding dresses and tuxedos, fashion eyewear, elaborate cat condos, stairs and ramps for elderly pets, pet toys and massagers, apparel (sweaters, dresses and T-shirts), collars and leashes.

Despite the proliferation of upscale pet products, this really is an industry in its infancy. While there have always been a lot of companies that sold pet products, as recently as 2001 there were very few companies offering upscale pet fare. Since then, there has been an explosion in the number of companies that sell these pricey products, which has made the industry much more competitive. But if you're a committed pet lover who believes there's a need for what some may consider fripperies, this is an industry in which you can make a good living.

Making Your Mark
There are several ways you can tap into the upscale pet-products industry:

A Day in the Life
Of course, running an upscale products business involves more than just picking out or manufacturing cool toys and market-testing them (with the able assistance of your own precious pets, most likely). There are a number of tasks you'll have to undertake on a daily basis to keep the business running smoothly and efficiently:

Setting Prices
If you're manufacturing your own products, you'll have some control over the prices you charge. These prices should be based on an equation that takes into account all your expenses, from materials costs to packaging. But if you're purchasing products to resell, your retail prices will be based on the cost set by the wholesaler or supplier, plus a markup that covers your business costs and profit margin. Benesh, who started her Columbia, South Carolina, company in 2002, suggests looking at your costs, seeing what other companies are charging for similar prices, and splitting the difference. She says, "If you have a superior product, can bring it to the market faster than anyone else, and offer excellent customer service, you're in."

Earnings Potential
It's not uncommon for a startup upscale pet-products business to have gross revenues as high as six figures in the first full year of business. However, after ponying up for product, fulfillment, office management, insurance, and the myriad other expenses required to run a business, the net revenue will be considerably lower-and maybe even minuscule. This is why it's not unusual for startup entrepreneurs who have working spouses or significant others with health-care benefits simply to plow all this revenue back into the business for the first couple of years, which gives the business the best chance of success.

Benesh, for example, takes just a small salary because her company is still in a growth curve. "If you want to take a salary immediately, the amount you take has a direct relationship to how much you want the business to grow," she says. Others, like Diane Burchard, the owner of Paws-Worthy Emporium & Deli in Santa Fe, New Mexico, depend on other income to make ends meet. When she started her business, she was a working mixed-media artist who had artwork in galleries around the country. The sales of that artwork helped to pay her monthly bills so she could sink everything else into the retail business.

Not to say that you can't depend on your business for a salary. According to Bob Vetere of the American Pet Products Manufacturers Association, the average weekly sales per employee in a retail pet-products business are $2,600, or $135,200 per year. Of that amount, an average of 19 percent usually goes to payroll and benefits, while 44.5 percent goes to inventory. The rest goes to taxes, licenses, fee, rent and/or leases. Of course, if you're drop-shipping, you won't actually have money tied up in inventory; rather, you'll get a percentage of the amount of the sale. That all becomes pure profit. And if you're working out of your home rather than a brick-and-mortar facility, you pocket the rent money as well. Or more likely, you'll put that money back into the business until it's on stable ground.

Obviously, you won't spring right from the box earning that average $2,600 per week. It takes time to develop your market and get the word out. So until then, it's really important to have a nest egg equivalent to six to 12 months of living expenses available to carry you through those lean early months. This can be money from personal savings, from a home equity loan, or from a business startup loan.

Startup Costs
As you can see, there are a lot of varied costs involved in starting an upscale pet-products business. A homebased business owner will have the lowest outlay of cash since his or her overhead costs will be much lower than those of a site-based merchant. Benesh, for instance, shelled out just a few thousand dollars for a "juiced-up laptop," as she calls it, and basic office supplies and equipment (including a color printer/scanner/fax machine).

But no matter where you do business, your most substantial cost will be for the inventory you purchase or manufacture. If you're buying product to resell, you probably will need $15,000 to $30,000 in inventory to get started, although if you're homebased, you could start for less. If you're going the manufacturing route, your startup inventory costs could be at least $30,000-or considerably more, depending on what you're producing. One of the entrepreneurs interviewed for this book says her startup inventory costs were $500,000, which included manufacturing, etc. Today, she's shipping 60 to 100 orders a day, so the initial outlay definitely paid off. Another entrepreneur launched her business with a loan from the SBA for $45,000, fortified by $5,000 of her own savings and $5,000 from her brother and sister-in-law-and she could have used more, she says.

How to Start a Pet Business

Marketing

According to Pet Age magazine, more than 6 out of 10 U.S. households, or 64.2 million, own at least one pet. Not all these households have designer pet strollers on the driveway or marabou-trimmed beds in the master bedroom, but enough people were buying products to pamper their pooches and kitties to make the pet-supplies industry a $5.86 billion market in 2003. Market research company Business Communications Co. predicts that by 2008, pet supplies will be a $7.05 billion industry, with an average annual growth rate of 3.8 percent. And while there are no statistics available specifically on the upscale pet-products industry, it's safe to say that the people who are selling these products are taking a big bite out of that prosperous market.

Upscale pet products run the gamut from the sublime to the sometimes ridiculous. There are ferret hammocks, faux mink dog blankets and cashmere sweaters, Halloween costumes and Santa suits, and plush beds shaped like Faberg eggs (the latter is the charming creation of one of the entrepreneurs interviewed for the Pet Businesses start-up guide). Other upscale pet products now in demand include jewelry (both barrettes and necklaces), wedding dresses and tuxedos, fashion eyewear, elaborate cat condos, stairs and ramps for elderly pets, pet toys and massagers, apparel (sweaters, dresses and T-shirts), collars and leashes.

Despite the proliferation of upscale pet products, this really is an industry in its infancy. While there have always been a lot of companies that sold pet products, as recently as 2001 there were very few companies offering upscale pet fare. Since then, there has been an explosion in the number of companies that sell these pricey products, which has made the industry much more competitive. But if you're a committed pet lover who believes there's a need for what some may consider fripperies, this is an industry in which you can make a good living.

Making Your Mark
There are several ways you can tap into the upscale pet-products industry:

A Day in the Life
Of course, running an upscale products business involves more than just picking out or manufacturing cool toys and market-testing them (with the able assistance of your own precious pets, most likely). There are a number of tasks you'll have to undertake on a daily basis to keep the business running smoothly and efficiently:

Setting Prices
If you're manufacturing your own products, you'll have some control over the prices you charge. These prices should be based on an equation that takes into account all your expenses, from materials costs to packaging. But if you're purchasing products to resell, your retail prices will be based on the cost set by the wholesaler or supplier, plus a markup that covers your business costs and profit margin. Benesh, who started her Columbia, South Carolina, company in 2002, suggests looking at your costs, seeing what other companies are charging for similar prices, and splitting the difference. She says, "If you have a superior product, can bring it to the market faster than anyone else, and offer excellent customer service, you're in."

Earnings Potential
It's not uncommon for a startup upscale pet-products business to have gross revenues as high as six figures in the first full year of business. However, after ponying up for product, fulfillment, office management, insurance, and the myriad other expenses required to run a business, the net revenue will be considerably lower-and maybe even minuscule. This is why it's not unusual for startup entrepreneurs who have working spouses or significant others with health-care benefits simply to plow all this revenue back into the business for the first couple of years, which gives the business the best chance of success.

Benesh, for example, takes just a small salary because her company is still in a growth curve. "If you want to take a salary immediately, the amount you take has a direct relationship to how much you want the business to grow," she says. Others, like Diane Burchard, the owner of Paws-Worthy Emporium & Deli in Santa Fe, New Mexico, depend on other income to make ends meet. When she started her business, she was a working mixed-media artist who had artwork in galleries around the country. The sales of that artwork helped to pay her monthly bills so she could sink everything else into the retail business.

Not to say that you can't depend on your business for a salary. According to Bob Vetere of the American Pet Products Manufacturers Association, the average weekly sales per employee in a retail pet-products business are $2,600, or $135,200 per year. Of that amount, an average of 19 percent usually goes to payroll and benefits, while 44.5 percent goes to inventory. The rest goes to taxes, licenses, fee, rent and/or leases. Of course, if you're drop-shipping, you won't actually have money tied up in inventory; rather, you'll get a percentage of the amount of the sale. That all becomes pure profit. And if you're working out of your home rather than a brick-and-mortar facility, you pocket the rent money as well. Or more likely, you'll put that money back into the business until it's on stable ground.

Obviously, you won't spring right from the box earning that average $2,600 per week. It takes time to develop your market and get the word out. So until then, it's really important to have a nest egg equivalent to six to 12 months of living expenses available to carry you through those lean early months. This can be money from personal savings, from a home equity loan, or from a business startup loan.

Startup Costs
As you can see, there are a lot of varied costs involved in starting an upscale pet-products business. A homebased business owner will have the lowest outlay of cash since his or her overhead costs will be much lower than those of a site-based merchant. Benesh, for instance, shelled out just a few thousand dollars for a "juiced-up laptop," as she calls it, and basic office supplies and equipment (including a color printer/scanner/fax machine).

But no matter where you do business, your most substantial cost will be for the inventory you purchase or manufacture. If you're buying product to resell, you probably will need $15,000 to $30,000 in inventory to get started, although if you're homebased, you could start for less. If you're going the manufacturing route, your startup inventory costs could be at least $30,000-or considerably more, depending on what you're producing. One of the entrepreneurs interviewed for this book says her startup inventory costs were $500,000, which included manufacturing, etc. Today, she's shipping 60 to 100 orders a day, so the initial outlay definitely paid off. Another entrepreneur launched her business with a loan from the SBA for $45,000, fortified by $5,000 of her own savings and $5,000 from her brother and sister-in-law-and she could have used more, she says.

How to Start a Pet Business

Sales

A good promotion strategy is all about the mix-you need to get your message into as many publicity channels as possible to get the best results. Here's how to collar some valuable publicity at low or no cost:

Good Stock
Now that you're on the way to selecting a suitable location for your pet-products business-either brick-and-mortar or virtual-it's time to give some thought to the products you'll be ordering to stock the shelves. And you don't have to be a budding retail magnate to need this information: All you dog trainers and pet groomers also may be interested in this information if you would like to sell retail products from your mobile "field office" or a retail area in your grooming salon or training facility.

All the Right Places
Among the places you can find merchandise for your site-based or virtual business are:

How to Start a Pet Business

Resources

Certification

Professional Organizations

Publications

Trade Shows

For more information starting five pet businesses-including pet sitting/dog walking, dog training, pet grooming, pet food/treats and upscale pet products-visit our Pet Businesses start-up guide, available from Entrepreneur Bookstore.

How to Start a Pet Business