How to Start a Pet Store Business | SkillsAndTech

Americans love their pets so much they spend more than $100 billion on them each year. Pet stores alone are a $22 billion industry, so if you’re a pet lover, you could open your own pet store and help people spoil their animals while making a good living.

A love of pets, though, is not enough to build a successful pet store. You’ll need some business know-how, and this step-by-step guide is full of all the insight you need to begin your animal-loving entrepreneurial journey.

Table of Contents

Decide if the Business Is Right for You

Pros and cons

Starting a pet store has pros and cons to consider before deciding if it’s right for you.

Pros

Share Your Passion – Show your love of animals with quality products
Growing Industry – Pet ownership and spending are on the rise
Good Money – Profit margins on pet products are high

Cons

High Startup Costs – Shop rent and inventory aren’t cheap
Competitive Market – Market is saturated with pet stores

Pet Store Industry trends

Overall spending on pets in the US is nearly $110 billion annually, more than double what it was a decade ago.

Industry size and growth

Industry size and past growth – The pet store industry is now worth over $22 billion, after growing 2% annually over the past five years.
Growth forecast – The $222 billion global pet care market is projected to grow more than 5% annually and reach $325 billion by 2028.
Number of businesses – The US is home to over 13,000 pet stores.
Number of people employed – The industry employs around 135,000 people.

Trends and challenges

Trends in the pet store industry include:

Pet supplements are growing in demand, particularly those containing cannabidiol (CBD) which is used to treat anxiety in dogs. Pet wipes and pet toothpaste are also increasingly popular.
Pet foods with all-natural ingredients are gaining ground.

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Challenges also exist in the pet store industry, including:

Pet stores face increasing competition from online pet businesses such as Chewy. This could create an opportunity for an entrepreneur to open a more niche online store, rather than a physical store since the ecommerce market is exploding.
Pet owners are seeking a variety of pet product options, which can be a difficult demand for small pet store owners to meet.

Consumer spending

Average consumer spend – An average dog or cat owner spends $200-$300 annually on pet food.
Potential customer base – Around 115 million US households have pet dogs and cats.

What kind of people work in pet stores?

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Gender – Three in four pet care associates are female.
Average level of education – 38% of pet care associates hold a bachelor’s degree while 34% have a high school diploma.
Average age – The average age of an employed pet care associate is 32 years old.

How much does it cost to start a pet store business?

Startup costs for a pet store range from $16,000 to about $20,000. The main costs are for space rental, preparation of the space, and inventory.

Let’s dive into an example.

Start-up Costs	Ballpark Range	Average
Setting up a business name and corporation	$150 – $200	$175
Business licenses and permits	$100 – $300	$200
Insurance	$100 – $300	$200
Business cards and brochures	$200 – $300	$250
Initial inventory and supplies	$6,000 – $8,000	$7,000
Rent	$1,000 – $2,000	1500
Fit-out cost	$5,000 – $6,000	$5,500
Website	$1,000 – $3,000	2000
Total	$13,550 – $20,100	$16,825

How much can you earn from a pet store business?

Prices for pet products vary. Your profit margins on products will be about 40% and after rent and overhead, your overall profit margin should be about 20%.

In your first year or two, your average daily sales could be $500, bringing in a healthy $182,000 in annual revenue. This would mean $36,000 in profit, assuming that 20% margin. As your store gains recognition, sales could climb to $2,000 per day. With expected annual revenue of nearly $730,000, you’d make more than $145,000 in profit.

What barriers to entry are there?

There are a few barriers to entry for a pet store business. Your biggest challenges will be:

High startup costs
Stiff competition

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.

Hone Your Idea

Now that you know what’s involved in starting a pet store business, it’s a good idea to hone your concept in preparation to enter a competitive market.

Why? Identify an opportunity

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Research pet stores in your area to examine their products, price points, and customer reviews, as well as what sells best. You’re looking for a market gap to fill. For instance, maybe the local market is missing an organic pet food store.

You might consider targeting a niche market by specializing in a certain aspect of your industry, such as specialty pet toys and treats.

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

What? Determine your products or services

You should choose the most in-demand products to stock in your store, and as wide a variety as you can fit. You might also consider adding additional services such as pet grooming.

How much should you charge for pet products?

You’ll need to research the market to see what various products are selling for but expect to markup products by between 30% and 40% from wholesale prices. Overall, after rent and overhead, you should aim for a profit margin of about 20%.

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

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Who? Identify your target market

Your target market is pet owners, which is obviously a very broad market. You’ll need to spread out your marketing efforts to include sites like Instagram, Facebook, and LinkedIn. You’re also mainly targeting people in your local area, so you can do local promotions.

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 storefront. You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.

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

Brainstorm a Business Name

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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
Name should be relevant to your product or service offerings
Ask around — family, friends, colleagues, social media — for suggestions
Including keywords, such as “pet store” or “pet supplies”, boosts SEO
Name should allow for expansion, for ex: “Jim’s Bakery” over “Jim’s Cookies”
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.

Create a 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: Brief overview of the entire business plan; should be written after the plan is complete.
Business Overview: Overview of the company, vision, mission, ownership, and corporate goals.
Product and Services: Describe your offerings in detail.
Market Analysis: Assess market trends such as variations in demand and prospects for growth, and do a SWOT analysis.
Competitive Analysis: Analyze main competitors, assessing their strengths and weaknesses, and create a list of the advantages of your services.
Sales and Marketing: Examine your companies’ unique selling propositions (USPs) and develop sales, marketing, and promotional strategies.
Management Team: Overview of management team, detailing their roles and professional background, along with a corporate hierarchy.
Operations Plan: Your company’s operational plan includes procurement, office location, key assets and equipment, and other logistical details.
Financial Plan: Three years of financial planning, including startup costs, break-even analysis, profit and loss estimates, cash flow, and balance sheet.
Appendix: Include any additional financial or business-related documents.

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

Register Your Business

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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 pet stores.

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 pet store 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.
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 ZenBusiness’s 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.

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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.

The IRS website also offers a tax-payers checklist, and taxes can be filed online.

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

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 crowdfunding 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 pet store business.

Apply for Licenses/Permits

Starting a pet store business requires obtaining a number of licenses and permits from local, state, and federal governments.

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits.

You may also need state-level and local county or city-based licenses and permits. Some states require pet stores to have a pet store license. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more.

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your pet store business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account.

Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
Business Property: Provides coverage for your equipment and supplies.
Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
Worker’s compensation: Provides compensation to employees injured on the job.
Property: Covers your physical space, whether it is a cart, storefront, or office.
Commercial auto: Protection for your company-owned vehicle.
Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.

Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business.

Essential software and tools

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Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.

You may want to use industry-specific software, such as LS Retail, PetShop360, or Korona, to manage your purchasing, inventory, sales, and invoices.

Accounting

Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero.
If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.

Marketing

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Some of your business will come from the casual passerby or online visitors, but still, you should invest in digital marketing! Getting the word out is especially important for new businesses, as it’ll boost customer and brand awareness.

Once your website is up and running, link it to your social media accounts and vice versa. Social media is a great tool for promoting your business because you can create engaging posts that advertise your products:

Facebook: Great platform for paid advertising, allows you to target specific demographics, like men under age 50 in the Cleveland area.
Instagram: Same benefits as Facebook but with different target audiences.
Website: SEO will help your website appear closer to the top in relevant search results, a crucial element for increasing sales. Make sure that you optimize calls to action on your website. Experiment with text, color, size, and position of calls to action such as “Visit Us Now.” This can sharply increase the number of clients..
Google and Yelp: For businesses that rely on local clientele, getting listed on Yelp and Google My Business can be crucial to generating awareness and customers.

Kickstart Marketing

Take advantage of your website, social media presence, and real-life activities to increase awareness of your offerings and build your brand. Some suggestions include:

Signage – Put up eye-catching signage at your store and website.
Flyering – Distribute flyers in your neighborhood and at industry events.
Post a video – Post a video about your pet store. Use humor and maybe it will go viral!
Email marketing/newsletter – Send regular emails to customers and prospects. Make them personal.
Start a blog – Start a blog and post regularly. Change up your content and share on multiple sites.
Seek out referrals – Offer incentives to generate customer referrals to new clients.
Paid ads on social media – Choose sites that will reach your target market and do targeted ads.
Pay–per-click marketing – Use Google AdWords to perform better in searches. Research your keywords first.

Develop your website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism. They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google.

You can create your own website using services like WordPress, Wix, or Squarespace. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that set it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your pet store meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire.

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your pet store business could be:

Organic pet food to keep your babies healthy
Buy local for your furry friends
Bring your pets and let them do the shopping

Networking

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a pet store, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in pet stores for years and can offer invaluable insight and industry connections.

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in pet stores. You’ll probably generate new customers or find companies with which you could establish a partnership. Online businesses might also consider affiliate marketing as a way to build relationships with potential partners and boost business.

Build Your Team

If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a pet store business would include:

Store Clerks – make sales, customer service
General Manager – scheduling, staff management, accounting
Marketing Lead – SEO strategies, social media, other marketing

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need.

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.

Start Making Money!

Americans spent over $100 billion on their pets in 2021, and $22 billion of that was in pet stores. You can capitalize on that spending by opening your own pet store. It takes a bit of an investment, but you’ll get a great return on that money.

You’ll be providing quality products to pets in your community and making them smile. It’s important to keep up with the trends so you’ll know which pet products are popular. Now that you know the nitty-gritty of the business, you’re ready to jump in and get your new pet store off the ground!