Open a Pet Food Store Whether you sell treats online or in a brick-and-mortar store

This article was excerpted from Pet Businesses, a startup guide available from SmallBizBooks.com.

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 bakers 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 the 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.

The pet-food industry has gone through many phases, from feeding pets scraps to the first processed dog food in 1860 to Purina revolutionizing the industry in the 1950s. In 1969, the pet-food industry did an about-face on the subject of all-meat diets when a researcher at the University of Pennsylvania School of Veterinary Medicine said that too much protein was harmful to dogs and recommended fortifying their diets with nutrients and carbohydrates. This ushered in the age of nutritionally complete diets, and since then, specialty diets for "patients" with kidney, heart and other diseases, as well as food for pets in various life stages, have become common.

In recent years, there has been a lot of controversy about pet-food ingredients, with accusations that these ingredients aren't wholesome and nutritious. For this reason, a number of companies now manufacture all-natural products, while others have duplicated the raw-food diets of yesteryear and market them as the ultimate in all-natural diets. In any event, pet food has come a long way, and you'll need to do some basic research to figure out exactly what your business niche should be.

For more information on starting your own pet food business, plus four other pet businesses, check out our guide on SmallBizBooks.com.