SIC075202-Doggy Day Care-How to Start a Profitable

SIC075202-Doggy Day Care-How to Start a Profitable
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CMStotheMAX

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Carolyn Young stepbystepbusiness.com
& then augmented

Step 01: Decide if the Business Is Right for You

Step 02: Hone Your Idea

Step 03: Brainstorm a Doggy Daycare Name

Step 04: Create a Doggy Daycare Business Plan

Step 05: Register Your Business

Step 06: Register for Taxes

Step 07: Fund your Business

Step 08: Apply for Doggy Daycare Licenses and Permits

Step 09: Open a Business Bank Account

Step 10: Get Business Insurance

Step 11: Prepare to Launch

Step 12: Build Your Team

Step 13: Run a Doggy Daycare – Start Making Money!

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More and more dog owners today consider their pets an integral part of their family, almost like their children, and refuse to leave them alone while they’re at work. This explains why the global pet sitting market is worth more than $2.5 billion and still growing.

If you’re a true dog lover, you can start your own doggy day-care and grab a share of that market while spending quality time with your furry friends. Demand for doggy day-care is massive, and it’s a simple business to start from home if you have a bit of space. You will, of course, run into challenges, so it’s a good idea to start with the right knowledge.

Thankfully, this step-by-step guide has all the information and insight you need to develop and launch your doggy day-care and put you on the path to puppy-filled prosperity.

Looking to register your business? A limited liability company (LLC)
is the best legal structure for new businesses because it is fast and simple.

Form your business immediately
using ZenBusiness LLC formation service or hire one of the Best LLC Services.

Step 1: Decide if the Business Is Right for You

Pros and cons

Every business has pros and cons that you should consider before deciding if a doggy day-care is right for you.

Pros

Playtime
– Dogs are able to interact and play with other dogs
Exercise Opportunity
– Provides physical and mental activities for dogs
Huge Market
– Over 70 million US households own a dog
Peace of Mind
– Gives dog owners peace of mind

Cons

Risk of Injuries
– Dogs might get into fights with each other and get hurt
Stressful environment
– Some dogs might find it overwhelming and stressful

Doggy day-care industry trends

Market analyst Grand View Research says the pet sitting market includes day-care services, dog walking, pet transportation, and more.

There’s also an opportunity for the savvy entrepreneur to make real money in the pet tech industry. Research firm Global Market Insights valued the pet tech industry at more than $5 billion in 2021 and expects it to grow a whopping 20% annually through 2028.^[1]

Industry size and growth

Industry size and past growth –
Grand View Research values the global pet sitting market at $2.6 billion, with the US contributing more than a third of the revenue.^[2]
Growth forecast –
The global market is expected to grow almost 9% annually through 2027.
Number of businesses – The US has the most doggy day-care facilities in the world at 374 as of October 2021.^[3]

Trends and challenges

Trends in doggy day-care industry include:

Pet humanization culture and return-to-work trend will drive demand for doggy day-care services
Pet tech, such as smart vests that monitor heart rate and collars with a geo-location device, are increasingly popular
Use of digital technologies in providing dog owners updates about their pets

Challenges faced by the doggy day-care industry are:

Risk of bullying, fights, and injuries
Maintaining the health and safety of dogs

Consumer spending

In 2021, US pet owners spent an incredible $126 billion caring for their animals, according to research firm Statista.^[4]

Average consumer spend –
Dog owners each spend an average of $228 a year on kennel boarding, according to the latest APPA survey.^[5]
Potential customer base – Nearly 70 million US households own a dog.
Average prices
– Doggy day-care in the US costs $25 per day and $15 per half-day.^[6]

What kind of people work in doggy day-care?

Gender –
94% of animal day-care providers in the US are female, while 6% are male.^[7]
Average level of education – 36% of animal day-care providers have a high school diploma and 25% hold an associate degree.^[8]
Average age – The average age of an employed animal day-care provider in the US is 32 years old.

How much does it cost to start a doggy day-care business?

The startup costs for a doggy day-care range from $3,000 to $15,000. The high end includes renting a facility, so if you start your day-care from home your costs will be much lower.

You’ll need a handful of items to successfully launch your doggy day-care business. Here’s a list to get you started:

Crates for holding dogs
Food and water bowls
Toys and treats

Startup Costs	Ballpark Range	Average
Setting up a business name and corporation	$150 – $200	$175
Licenses and permits	$100 – $300	$200
Insurance	$100 – $300	$200
Business cards and brochures	$200 – $300	$250
Website setup	$1,000 – $3,000	$2,000
Day-care equipment	$1,500 – $5,000	$3,250
Facility rental	$0 – $6,000	$3,000
Total	$3,050 – $15,100	$9,075

How much can you earn from a doggy day-care business?

The average price of doggy day-care in the US is $25 per day per dog. If you start your day-care from home, your profit margin should be around 90%.

If you care for five dogs a day, five days a week you’ll bring in over $32,000 in annual revenue. This would mean almost $30,000 in profit, assuming that 90% margin. As your brand gains recognition, you might rent a commercial space and hire staff, reducing your margin to around 40%. If you care for 25 dogs a day, 5 days a week, you’ll have annual revenue of over $160,000 and profit of $65,000.

What barriers to entry are there?

There are a few barriers to entry for a doggy day-care. Your biggest challenges will be:

You need enough space, including outdoor space, to host at your home
You’ll face competition from established area day-cares

Related Business Ideas

If you’re still not sure whether this business idea is the right choice for you, here are some related business opportunities to help you on your path to entrepreneurial success.

Step 2: Hone Your Idea

Now that you know what’s involved in starting a doggy day-care, it’s a good idea to hone your concept in preparation to enter a competitive market.

Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.

Why? Identify an opportunity

Research doggy day-cares in your area to examine their products and services, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the local market is missing a doggy day-care that watches dogs on evenings, weekends, holidays, or a day-care that offers special grooming services.

You might consider targeting a niche market by specializing in a certain aspect of your industry.

This could jumpstart your word-of-mouth marketing and attract clients right away.

What? Determine your products or services

You may decide to offer other products or services to increase revenue. You could offer:

Bathing and grooming
Dog training
Overnight boarding

How much should you charge for doggy day-care?

Prices for doggy day-care range from $12 to $38 per day. Once you open a facility outside your home you’ll have costs for rent, overhead, and labor. At that point you should target a profit margin of around 40%.

Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

Who? Identify your target market

Your target market will be dog owners, most likely professionals who need day-care during work hours. You can probably find these people on Facebook or LinkedIn.

Where? Choose your business premises

In the early stages, you may want to run your business from home to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles and may need to rent out a facility. You can find commercial space to rent in your area on Craigslist, Crexi, and Commercial Cafe.

When choosing a commercial space, you may want to follow these rules of thumb:

Central location accessible via public transport
Ventilated and spacious, with good natural light
Flexible lease that can be extended as your business grows
Ready-to-use space with no major renovations or repairs needed

Step 3: Brainstorm a Doggy Day-care Name

Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.

Here are some ideas for brainstorming your business name:

Short, unique, and catchy names tend to stand out
Names that are easy to say and spell tend to do better
The name should be relevant to your product or service offerings
Ask around — family, friends, colleagues, social media — for suggestions
Including keywords, such as “pet day-care” or “doggy day-care”, boosts SEO
Choose a name that allows for expansion: “Doggy Daydreams Co.” over “Small Dog Day-care Services”
Avoid location-based names that might hinder future expansion
Use online tools like the Step by Step business name generator. Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these.

Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that set your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Step 4: Create a Doggy Day-care Business Plan

Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:

Executive Summary:
A concise summary outlining the core aspects of the doggy day-care business plan, including its objectives, mission, and key highlights.
Business Overview:
An overview of the doggy day-care business, providing information on its structure, location, and the specific needs it aims to address in the market.
Product and Services:
Detailed descriptions of the services offered, such as dog day-care, grooming, and training, emphasizing the unique selling points that set the business apart.
Market Analysis:
A thorough examination of the target market, including demographics, trends, and potential growth, to inform strategic decisions and ensure alignment with customer needs.
Competitive Analysis:
Evaluation of competitors in the doggy day-care industry, identifying strengths, weaknesses, opportunities, and threats to help the business differentiate and position itself effectively.
Sales and Marketing:
A comprehensive plan outlining how the business will attract and retain customers, encompassing advertising, promotions, and customer relationship strategies.
Management Team:
Introductions and brief bios of the key individuals who will be managing and leading the doggy day-care business, highlighting their relevant experience and skills.
Operations Plan:
A detailed plan describing the day-to-day operations of the doggy day-care, covering staffing, facility management, and processes to ensure smooth and efficient business functioning.
Financial Plan:
A projection of the doggy day-care’s financial performance, including startup costs, revenue forecasts, and profit margins, providing a roadmap for financial sustainability and growth.
Appendix:
Supplementary materials, such as additional research, legal documents, and any other relevant information supporting the components outlined in the business plan.

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business!

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to doggy day-care centres.

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state.

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your doggy day-care will shape your taxes, personal liability, and business registration requirements, so choose wisely.

Here are the main options:

Sole Proprietorship
– The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
General Partnership
– Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
Limited Liability Company (LLC)
– Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
C Corp
– Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
S Corp
– An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just needs to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.

Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN.

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

Bank loans: This is the most common method, but getting approved requires a rock-solid business plan and strong credit history.
SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
Friends and Family:
Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowd funding sites like Fundable and WeFunder enable multiple investors to fund your business.
Personal:
Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best options, other than friends and family, for funding a doggy day-care business. You might also try crowd funding if you have an innovative concept.