How to Start a Dog Treat Bakery Business

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Quick Reference

We all love our dogs and want them to be healthy, so they are with us for a long time.  If you have ever made your dog home-baked healthy treats or food, maybe you want to share your recipes with others. Starting your own dog bakery business is a great way to do just that.

Business Overview

A dog bakery business creates homemade treats for dogs, typically with healthy and natural ingredients like fresh meat, fruits, and vegetables.  They make everyday treats and/or specialty treats like birthday cakes or holiday-themed treats.  The business sells these treats in its own store, online, or both.  Often a dog bakery business will sell their treats at third-party businesses such as pet stores, veterinarian’s offices, or pet boarding facilities.

A pet treat business can be run full-time or part-time to make some extra money, making this a very flexible and fun business to run.

Industry Summary

According to Pet Food Processing, in 2019, pet owners spent over $34 billion on pet food and treats, and $6 billion was for treats alone.  That number is expected to grow by about 4% through 2025.  Of the $34 billion, $4.9 billion was spent on pet food and treats online.  43% of dog owners buy premium pet food products.

Industry Trends

Dog bakeries are growing more and more popular, and nutrition continues to be a major factor in choosing dog treats. Some dog bakery offerings are made for specific health purposes, such as teeth health or fresh breath. Consumers also like fun and aesthetically pleasing treats for special occasions.

Target Market

The target market for a dog bakery business is anyone who has a dog and is interested in healthy or fun snacks for their dog, or a pet-related business like a veterinarian, pet groomers, dog trainers, dog show, boarding kennel, or doggie daycare.

Skills, Experience, and Education Useful in Running a Dog Bakery Business

There are several specific skills that you will need to open a dog bakery business.

  • A knowledge of baking. Some knowledge of baking will be a huge advantage even if you’ve never made dog treats. You can find recipes and make them your own. Your dog will love the taste testing!
  • Knowledge of trends. You need to keep up with what customers are looking for at any given time.
  • Business knowledge and experience.  You will need to have some basic knowledge of marketing and finance/accounting,
  • Customer service. You’ll need to be able to build rapport with your customers so that you retain them as customers and gain repeat business and referrals.

Costs to Start a Dog Bakery Business

Here are the typical costs you will face when you start a dog bakery business. If you choose to sell online and to third-party stores only, your costs will be minimal.

  • Setting up a business name and corporation costs approximately $200
  • Business cards, brochures, flyers, and postcards for marketing $200 – $300
  • Website setup $100 –$200 for a basic, do-it-yourself website, $1,000 – $2,000 for a professional site.
  • Initial inventory of ingredients $100 – $500
  • Packaging and shipping supplies $100 – $250
  • Licensing your home kitchen or your shop kitchen $100 – $200
  • Shop rental (if operating from a retail location) $500 – $2,500 per month
  • Shop setup for fixtures, shelving, signage, etc. $5,000 +
  • Insurance $100 – $200

Steps to Opening a Dog Bakery Business

Step 1: Write your Business Plan

After coming up with the idea, the next step in starting your dog bakery business should be to write a business plan.  The business plan will make you focus on some important aspects of the business, such as who your customers are, how you plan to reach them, projecting sales and expenses, your value proposition to use for marketing, and more. You’ll also need to do some research to calculate exactly what your startup expenses will be and what your ongoing expenses will be.

Not only will a bank require you to have a business plan if you need financing, but multiple studies have shown that having a good business plan increases the odds of starting a successful business. Writing the plan helps you to think through all the aspects of the business and then serves as a guide as you begin.

How to write a business plan
Free sample business plans

Step 2: Name the Business

Finding the perfect dog bakery business name can be challenging. Not only does the name have to reflect what you do and be appealing to customers, but it also has to be available to use. You can check your state’s website to see if the name is available and register your name.  Your name should make you stand out, reflect your brand, and tell potential customers exactly what you do.

Step 3: Form a Business Entity

A business entity refers to how a business is legally organized to operate. There are four primary business entities to choose from, which include a sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.

RelatedComparison of business entities

Step 4: Select your Location

Many dog bakery businesses operate out of their home and sell directly to consumers on their website or to dog-related businesses such as kennels, vets, etc. Others will open a retail storefront, which comes with higher rent costs as a location with high foot traffic is beneficial.

Related: Choosing a business location

Step 5: Apply for Business Licenses and Permits

There are specific regulations when making homemade dog treats. At the federal level, the Federal Drug Administration (FDA) requires that all animal foods, like human foods, be safe to eat, produced under sanitary conditions, contain no harmful substances, and be truthfully labeled. Learn more about the FDA’s pet food regulations. Additionally, many states require a business selling pet foods to register with the state’s Department of Agriculture, while other states may require that your company be licensed to sell in that state. Last, your local health department may have local regulations and rules to follow as well.

The Association of American Feed Control Officials (AAFCO) has more information and a checklist for Model Pet Food Regulations and the Pet Food Labeling Checklist.

You may need to obtain certain business licenses and permits. These permits and licenses can vary based on the state and town where the business is located. Some common local, state, and federal registrations a dog bakery business may need include a  sales tax permit and an Employer Identification Number if you plan to have employees.  You will also need to have your kitchen licensed with your state.

Related: Common business licenses, permits, and registrations by state

Step 6: Find Financing

Many home-based dog treat bakery businesses won’t need funding since the startup costs are low, however, if you are opening a retail storefront, a loan or investment may be necessary.

In order to get a loan, the borrower(s) will need to have good credit and be able to invest 15-25% of their money towards the total start-up costs.  Some entrepreneurs use their own funds, a home equity loan, or credit cards, but you are putting your funds at risk and will have payments that may or may not be more than those of a business loan.

Related: Finding the money to start a business

Step 7: Open a Business Bank Account

Keeping your business and personal finances in separate business bank and credit card accounts makes it easier to track the income and expenses of the business.

Step 8: Get your Marketing Plan in Place

A dog bakery business will need to set aside a budget to cover marketing costs on a continuous basis. Common marketing techniques for a dog bakery business include social media marketing or flyers at the local dog parks.  Signage and window displays will be important if you have a brick-and-mortar store.

Related: Low-cost ideas to market a new business

Step 9: Get Insurance

A dog bakery business needs several types of insurance for full coverage:

General liability insurance can help protect you from third-party claims of bodily injury and property damage.

Professional liability insurance protects you from claims of professional errors or negligence that result in a financial loss.

Worker’s compensation insurance covers expenses like medical bills and legal fees that a business might face if an employee were ever hurt while working.

Property and casualty insurance protects you if your equipment is damaged.

Insurance policies will vary. To get the most accurate idea of what to budget for insurance, request quotes from multiple providers. When comparing the quotes, consider not only the premiums but also how the plan exclusions, coverage limitations, and deductibles compare.

Related: Common types of insurance a business may need

Step 10: Hiring Employees

You may need employees to help run your dog bakery business.

In addition to salary costs, your budget will also need to include other employee-related expenses. Workman’s comp insurance, unemployment insurance, and paid time off are common expenses that a business will need to cover when hiring staff.

Related: Hiring your first employee

Step 11: Set up an Accounting System

Setting up an accounting system for your dog bakery business is critical to the long-term success of your business.

Staying on top of taxes not only keeps the business out of trouble with the government but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.

Related: Setting up accounting for your business

How Much Can You Potentially Make Owning a PetBakery Business

Many small pet bakery businesses have become very successful quickly, making $500,000 – $1,000,000 in revenue in the first year.   Your revenue will be highly dependent on your location if you have one or your marketing and sales strategy if you sell online or to third-party stores.

Things to Consider Before Starting a Dog Bakery Business

Running a dog bakery business or any small business will have its challenges.  You need to be prepared and make sure that you know what you’re getting into.

Acquiring customers and keeping those customers is key.  You need to create awareness of your business by spending time and money on marketing and make your customers feel comfortable and welcome to keep them coming back.

If you sell online, you’re going to have to spend money to make your site visible so that you get traffic and sales.  A professional website with professional marketing will be necessary to get a large volume of customers.

It’s not easy to make a dog bakery business successful, so you will be risking the money that you put in if you don’t meet your sales goals.

Talk to other business owners for tips on starting a business and do your homework to determine costs.  Research other dog bakery businesses to see what they offer and their pricing.

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