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How to Start a Doggie Daycare

Overview

How to Start a Doggie Daycare

Do you love all dogs? Well, you are not alone. In 2021, approximately 48 million households in the US owned a dog – the pet industry is big business. So if you enjoy caring for your furry friends, starting a Doggie Day Care might be paw-fect for you.

Keep reading if you want to learn everything you need to know about this industry, some facts, figures, and recommendations, before starting your own doggie daycare. 

Business Description

Every dog owner and their dogs have different needs. 

A dog daycare business may offer a variety of pet services such as dog walking and exercise, grooming and pampering, feeding,  or behavior training. It may be set up to look after dogs overnight, during holidays, or it may simply be a place where dogs can socialize, run around and play for the day. 

Some larger facilities also offer an onsite veterinarian. 

Frequently, services include the lifestreaming of activities, or pooch photos, to give dog owners peace of mind that their pet is well cared for, safe, and happy. 

Industry Summary

A doggie daycare business sits within the pet care industry, an expanding industry.  According to the American Pet Products Association, that industry was worth $9.5 billion in 2021 (including boarding, grooming, insurance, training, pet sitting, and walking). 

On average, Americans forked out almost $228 annually for basic boarding, $47 for dog grooming, and $56 for toys per dog. The most significant piece of the revenue pie is pet boarding, with $38%.

Industry Trends

Doggy daycare services have become increasingly popular in the US and globally, especially since the return of the workforce to the workplace. This popularity has given rise to dog franchise businesses, especially in urban centers. 

According to Cision, the growth of the pet care industry in 2022 alone is expected to be 4.52% and is forecast to expand by almost $59 million by 2026. This is partly due to higher pet ownership in previous years and dog owners increasingly splurging on their furry family members, particularly on pet socializing, grooming, and pet fashion and accessories. 

Target Market

According to the American Pet Products Association, Millennials are the largest generation of pet owners in the US with 32%, closely followed by GenX with 24%.

Apart from the age group, your target market will likely be busy dog owners who don’t want their pets to be home alone all day and may be time-poor or traveling extensively.

You may also cater to pet parents who live in apartments and seek to give their pets an environment to play and run around with other dogs. 

Checklist for Starting a Doggie Daycare Business

If you’re thinking about starting your own doggie daycare business, there are a few things you should keep in mind. Here is a checklist of the essentials to get started.

Step 1: Write a Business Plan

Starting a business is a huge undertaking, and there are a lot of moving parts to keep track of. One of the most important pieces of the puzzle is your business plan. Your business plan is your roadmap to success, and it outlines everything from your business model to your marketing strategy.

If you’re thinking about starting a doggie daycare, you might be wondering if you really need a business plan. The short answer is yes! A business plan is essential for any new business, and that includes a doggie daycare.

Related: How to write a business plan

Step 2: Name the Business

Finding the perfect name for a business can be challenging. Not only does the name have to resonate with your customers, but it also has to be available to use.

Related: Tips on naming a business

Step 3: Form a Business Entity

A business entity (also referred to as a business structure) refers to how a business is legally organized to operate. There are four primary business structures to choose from, which include the 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.

When deciding on which business entity is best for a doggie daycare business, it normally comes down to the sole proprietorship and Limited Liability Company.

A partnership opens the owners up to unnecessary personal liability because if a partner does something to get the business sued, or runs off with cash from the business, the other partners are personally liable to repay.
 
The corporation can be a good choice to minimize liability risk because it separates the business assets from the owner’s assets. If the corporation is sued or certain business debts can’t be paid back, the owners aren’t personally responsible to repay them. The downside to the corporation is that it is more complicated than all the other entities and requires more administration than the LLC. If you plan on raising a lot of investment though, the corporation is usually the better choice.

That leaves the sole proprietorship and LLC.

The sole proprietorship is the least expensive and easiest entity to start which is appealing. The downside is that the owner is personally liable should anything happen to the business, which is an important consideration. The LLC offers the ability to operate as a sole proprietorship with the liability protection of a corporation. Depending on the state, the cost to form an LLC runs from $40 – $500, which is pretty inexpensive for protecting the owners from business-related lawsuits and certain debts.

Related: Guide to forming your LLC
 

Forming an LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.


Some popular LLC formation services include:


IncFile - $0 plus state fees & free registered agent for 1 year!

IncAuthority - $0 plus state fees & free registered agent the first year!

ZenBusiness - $49 plus state fees & free registered agent for 1 year!

Step 4: Select Your Location

A successful doggie daycare business will need to carefully select a location. Here are some tips to help you find the perfect spot for your new business:

1. Look for a location that’s easily accessible to your target market. If you’re targeting busy dog owners, for example, you’ll want to choose a location that’s close to where they live or work.

2. Make sure the location you choose is safe for both dogs and humans. You’ll need to have a fenced-in area for the dogs to play in, and the property should be free of any hazards that could harm either the dogs or the people who will be visiting your business.

3. Consider the size of the property you’ll need. A doggie daycare business will require a fair amount of space, so make sure the location you’re considering has enough room to accommodate your needs.

4. Make sure the location you choose is zoned for commercial use. This is important, as you don’t want to run into any legal problems down the road.

5. Once you’ve found a few potential locations, take some time to visit each one and get a feel for the area. This will help you narrow down your choices and choose the best spot for your new business.

Step 5: Apply for Business Licenses and Permits

Most states have regulations for boarding and dog daycare facilities under the Department of Agriculture. Additionally, some counties and cities will have additional local laws, regulations, and inspections to operate.

There are some general business registrations that may be needed, such as a local business license, sales tax permit, Employer Identification Number, and Occupancy Permit, among others.

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

Step 6: Find Financing

There are several ways to finance a doggie daycare business. Of the options, the most common include using your personal savings, taking out a loan, or looking for investors.

If you have the money, you can start a doggie daycare business with your personal savings. This is the most straightforward way to finance your business. However, you should only use this method if you have enough money saved up.

Another option is to take out a loan. You can get a loan from a bank or a private lender. The advantage of taking out a loan is that you don’t have to give up equity in your business. Banks are typically going to want the borrower to have good credit and be able to invest 15-25% of their money towards the total start-up costs.

The most difficult way would be to find investors who are interested in investing in your business. You can offer them a percentage of the profits in exchange for their investment. This is a good option if you don’t have the money to finance your business yourself.

No matter which method you choose, you should make sure that you have a solid business plan. This will help you convince potential investors that your business is worth their money.

Related: Finding the money to start a business

Step 7: Open a Business Bank Account

Keeping your small business and personal finances in separate bank accounts is important to track the income and expenses of your business and identify trends.
 
Many banks offer free business checking accounts, so be sure to find a cost-effective option for your business.

Step 8: Get your Marketing Plan in Place

Having a great business is just a start. You also have to let people know that your service is available. While there isn’t one way to do it, here are some ways to promote your doggie daycare business:

1. Create a professional looking website and keep it up-to-date. Your website is often the first impression potential clients will have of your business, so make sure it is professional and up-to-date. Include information about your services, rates, and policies.

2. Get involved in the community. Dogs are a great way to meet new people and get involved in the community. Attend local events, such as dog parks and dog-friendly businesses. You can also volunteer at local shelters or rescue organizations.

3. Use social media. A social media presence is a great way to promote your business and connect with potential clients. Create a Facebook page, Instagram, and Twitter account for your business. Post photos and updates about your business, and offer discounts and promotions.

4. Advertise in local publications. Many local publications, such as newspapers and magazines, offer advertising discounts to businesses that serve the local community. Contact the sales department of your local publications to inquire about rates and discounts.

5. Distribute promotional materials. Flyers and business cards are an inexpensive way to promote your business. Distribute them at local businesses, dog parks, and events. You can also leave them at your local veterinarian’s office.

6. Referrals. Encourage current customers to refer new customers your way by providing an incentive like a free stay or grooming for every new customer they send.

Related: Low-cost ideas to market a new business

Every business is going to need a logo. Make a professional logo in no time with the free Canvaa logo maker!

Step 9: Get Business Insurance

A doggie daycare, like most businesses, should get insurance. Here’s a look at the common types of insurance your business may need.

Liability insurance: This type of insurance protects you if your business is sued for something like property damage or personal injury. Make sure you have enough coverage to protect your business in case of a lawsuit.

Property insurance: This type of insurance protects your business property, like your building, equipment, and inventory. If your property is damaged or destroyed, this insurance can help you pay to repair or replace it.

Worker’s Compensation insurance: If you have employees, most states require worker’s comp insurance in case they are injured while on the job.

There are likely other types of insurance you to consider, so be sure to talk to your insurance agent to make sure you have the coverage you need.

Related: Types of insurance your business may need

Step 10: Hire Employees

When starting out, you may be the only employee until you can bring in enough clients. At some point, though, you may not want to be the only employee, so you can take a day off or have employees handle certain aspects of the business.

There are a few things to keep in mind as a business owner when deciding when to hire employees for your doggie daycare business. First, you need to make sure that you have the financial resources to support additional employees. Hiring employees will add to your overhead costs, so you need to make sure that you can afford to pay their salaries and benefits.

Second, you need to consider the impact that additional employees will have on your business. If you are a small business, hiring additional employees may mean that you have to make some changes to the way you operate. For example, you may need to increase the size of your facility or the number of dogs you can care for at one time.

Hiring the right employees is essential to the success of your doggie daycare business.

Related: Hiring your first employee

Step 11: Set up an Accounting System

When it comes to starting a new business, there are a lot of important details to take care of. One of the most important things to do is to set up your accounting software correctly from the start. This will help you stay organized and on top of your finances as your business grows.

Here are a few tips on how to set up your accounting software to help you get started on the right paw.

1. Choose the right software for your business There are a lot of different accounting software options, from doggie daycare specific to general software like Quickbooks or Freshbooks. It’s important to choose the one that’s right for your business.

2. Set up your chart of accounts One of the first things you’ll need to do when setting up your accounting software is to create a chart of accounts. This will help you keep track of all the different aspects of your business finances.

3. Enter your income and expenses Once you have your chart of accounts set up, you can start entering your income and expenses. This will help you keep track of how much money is coming in and going out of your business.

4. Stay organized One of the key things to remember when setting up your accounting software is to stay organized. This will help you avoid mistakes and make it easier to find information when you need it.

5. Get help if you need it If you’re having trouble setting up your accounting software or you’re not sure where to start, there’s no shame in getting some help. You can hire an accountant or bookkeeper to help you get set up and answer any questions you have.

By following these tips, you’ll be on your way to setting up your accounting software correctly for your doggie daycare business.

Related: Setting up the accounting for your business

The thought of accounting can be intimidating for a lot of new entrepreneurs. There are a number of ways of handling bookkeeping, from DIY to hiring a bookkeeper. These include:

- Pen and paper - Low expense, but difficult to track.
- Spreadsheet - Low expense, but easy to make errors.
- Accounting software - Medium expense, but owner typically inputs expenses. Some great accounting software programs include Freshbooks or Wave Accounting.
- Hire a bookkeeper - Higher expense, though very affordable at $100-$200 per month in most cases. A dedicated bookkeeper will probably save money because, in addition to handling all of the bookkeeping (so you can focus on the business), they also provide personalized tax advice and ensure the business is in compliance.

Find bookkeepers in your local area or use a service like 800Accountant.

How much does it cost to start a doggie daycare business?

Start-up costs will largely depend on where you are, the services you offer, and the space you may already have. 

Here are a few start-up and ongoing expenses to consider when establishing a business plan and budget:

Services: If you are simply developing a dog walking business, your start-up costs are minimal. If, however, you decide to offer a doggie daycare with a pooch spa, a large play area, overnight facilities, a pick-up and drop-off service, dog training, and perhaps a live feed or regular updates to the dog owners, your start-up costs will be more substantial. In that case, we highly recommend developing a detailed business plan. 

Location and facilities (rent, lease, fit out): Unless you already own a large property, ideally not too close to neighbors, you will need to find a facility and land to lease suitable for a doggie daycare business. That could be a warehouse, or a place with a large outdoor area, depending on your business plan. Consider the location as well. Is it easy for owners to drop off and pick up their pets?

Do you prefer to be in a suburban area with high visibility and storefront appeal? What will you need for the fit-out? Will you be offering dog grooming services? How many pets can you care for? Will you need additional staffing? 

Insurance, licenses and permits, and utilities

Training: Ensure you set aside a budget for professional development and training for yourself and your staff. 

Supplies: You will need a supply of dog food, pet toys, cleaning material, dog grooming products, and dog accessories for sale.

Marketing and communications: What channels will you use to ensure people know about your business and why they should choose you? Invest in an online presence, but also ensure you connect with dog programs and classes, pet food, and dog accessories suppliers; investigate whether there are dog shows or relevant trade expos in your area.

How profitable is a doggie daycare business?

While there isn’t a lot of published information on the industry, K9 Franchise estimates the average annual EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) for a doggie daycare to be over $480,000.
 
However, your income will largely depend on how well you can manage your expenses and margins and on what additional services you provide.

To encourage repeat business, consider offering discounts for weekly services or a loyalty program. 

Are there grants to start a doggie daycare business?

It’s extremely rare to find a grant to start a doggie daycare business. If you search for business grants, you will come across a lot of scams and misinformation. Occasionally an organization will offer grants to start a business, however, be skeptical and don’t provide any sensitive personal information or pay money to get more information.

Legitimate federal grants can be found at Grants.gov, and you can check on your state’s economic development office to see if they have any grants available.

What skills are needed to run a doggie daycare business?

Fur friendly. We are stating the obvious here, but it’s vital that you love dogs, big and small, pups and older souls like they were your own. But, most of all, you will also need a good understanding of caring for and handling dogs, show authority, and enjoy the shenanigans that will come with having a pack of dogs running around. 

While you don’t need a specific professional certification to start a doggie daycare, it will be reassuring for the pet owners to know that their buddy is in good hands and that you are well aware of best practices, canine first aid, and safety standards in pet care. 

Consider joining organizations such as the American Kennel Club (AKC) and subscribing to the Pet Boarding Magazine to stay updated with trends and developments. Courses like this one will also help you set your business up for success.

Excellent communication and customer service skills. Although you will be looking after puppies, it’s the dog owners you will need to win over. So excellent communication skills and outstanding customer service from the first inquiry to handing the happy pet back to its owner will be essential to the success of your business. 

An outstanding customer experience will ensure repeat business and help expand your brand through word of mouth. 

Business skills. Good business skills and practices and understanding the health and safety and licensing requirements are the foundation of a thriving business.

Although there are no federal licensing requirements, we recommend you check what permits are necessary for your State or County. You will also need to ensure you adhere to correct sanitation procedures and will typically need to pass an on-site inspection before you can start offering your services. 

Ensuring you have priced your services correctly, managing inventory and equipment, potentially managing staff, and keeping on top of accounting will all be essential contributors to your success. 

What is the NAICS code for a doggie daycare business?

The NAICS code for a doggie daycare business is 812910, which is classified under pet care (except veterinary services).

The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.

Related: What is a NAICS code?

Final Thoughts

Running a doggy daycare can be a fun and profitable business for someone who loves pets and has an entrepreneurial spirit. Pet care is undoubtedly a growing industry. So do your homework, and you will start on the right paw! And lastly, we’d like to leave you with this  success story noting that, although truly amazing, this one is exceptional!

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