How to Start a Pet Boarding Business
The pet industry is booming, and busy pet owners needing care for their pets when they travel. Starting a pet boarding business can allow you to build a profitable operation while helping pet owners to ensure their pets are happy and safe when they aren’t home. If you love working with cats, dogs, and other pets and have experience in pet care and handling, then this business might be a great opportunity for you. But while caring for pets for a living might sound like an ideal business venture, it’s important to understand everything that goes into starting and running a pet boarding business.
Pet boarding businesses provide attentive care for pets while their owners aren’t able to care for them. Pet owners put their pets into boarding while they’re traveling, often for work or while on vacation. In most cases, boarding facilities mainly care for cats and dogs, but some facilities may offer care for small animals, too. These services may be for doggie daycare while the owner is at work, or extended stays can last for weeks or months. Boarding on weekends and holidays is often in high demand.
A pet boarding business needs to be designed to be a pet’s home away from home. This includes having appropriate kennels for different types of pets and an outdoor space where dogs can exercise. Boarding business owners or staff care for pets multiple times a day and need to be skilled enough to handle pets with different temperaments and training.
Pet owners can get anxious when their pet’s care and safety is involved, and you’ll likely face many unusual requests that go beyond your typical standard of care. Make sure that you have policies in place for these extra requests so that if you do honor them, you can fulfill them.
Good policies will go a long way toward keeping the business running smoothly. Consider your vaccine and health requirements for pets, and outline these in writing when you first open your business. This is also the time to outline the action that will be taken if a pet has a medical emergency, as well as to establish relationships with local vets who are willing to work with your business.
Also, owning a boarding facility often means not taking off for popular holidays, as that is when kennels are typically at full capacity. Thanksgiving, Christmas, spring break for local schools, and summers are the peak times for seasonality.
According to IBIS World, the pet boarding industry underwent significant growth from 2014 through 2019. During that five-year period, the industry experienced a 6.2 percent growth, and the number of businesses increased to 123,900. Industry employment also grew to 218,674, and the industry was predicted to bring in $9 billion in revenue in 2019.
This growth is driven in part by the increase in the number of pet owners in the country. The American Veterinary Medical Association reports that in 2017-2018, 38.4 percent of households owned dogs, while 25.4 percent of households owned cats. That amounts to more than 48,000,000 households with dogs and over 31,000,000 households with cats. With pet ownership so popular in the United States, there’s an increased need for services like boarding. An increase in per capita disposable income from 2014 to 2019 also means that pet owners have more money to spend on luxuries, like vacations, which further increases pet boarding service needs.
Many trends are shaping the pet boarding industry. According to Gingr, more and more pet owners are highly tech-savvy, so boarding businesses need to also embrace technology. Businesses can offer online reservations and even install video cameras that stream footage to a website, so pet owners can see their pets even when they’re across the country. These little details can appeal to tech-savvy pet owners and set businesses apart from their competition.
The pet boarding industry can also take advantage of premium offerings to deliver pets, and their owners truly unique, desirable service. Luxuries like extra-large kennels, furnishings that resemble the comforts you’d find in a house, and indulgences like special toys and gourmet treats all make a pet’s stay more enjoyable. These premium offerings create an upselling opportunity and can increase a business’s profits. When a boarding business offers these unique perks, pet owners may be more likely to use the business again in the future, which builds customer loyalty.
Most pet boarding businesses market toward pet owners who travel, whether for work or a vacation. The business model and any specializations will partially dictate the target market. Some facilities may specialize in dog boarding and market specifically toward dog owners, while others may market to only cat owners.
Checklist for Starting a Pet Boarding Business
If you’re thinking about starting a pet boarding business, it’s important to do your research first. Here is a checklist to help you get started.
Step 1: Write a Business Plan
After coming up with the idea, the next step in starting your business should be to write a business plan. Not only will a bank require you to have a business plan, but multiple studies have shown that a business plan helps increase the odds of starting a successful business.
Related: How to write a business plan
Step 2: 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 pet boarding 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 3: Choose a Business Name
Finding the perfect business name can be challenging. Not only does the name have to resonate with your customers, but it also has to be available to use.
Step 4: Select your Location
While most pet boarding businesses don’t necessarily require a prime, high-traffic location, it is usually important to be conveniently located close to clusters of neighborhoods. The issue, though, is that some communities have noise ordinances, and opening a boarding facility in those communities can be challenging.
Before signing a lease or purchasing a location, be sure to check out zoning to ensure you can operate legally.
Related: Choosing a business location
Step 5: Apply for Business Licenses and Permits
Most states have some sort of licensing for boarding facilities and are regulated under the state’s Department of Agriculture. Also, 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.
Step 6: Find Financing
Coming up with a good business idea and having the skills to run it are one thing, but getting the funding to start a pet boarding business is another. Funding to start a pet boarding business can be difficult. In order to get a loan, the borrower(s) will need to have good credit and be able to personally invest 15-25% towards the total start-up costs.
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
Good, ongoing marketing is essential to a pet boarding business’ success. Boarding facilities often use a variety of marketing techniques, like email marketing, social media marketing, print advertising, and direct mail to connect with potential customers. Customer loyalty and referral programs can also help to bring in new customers and to encourage returning customers. Also, networking with local pet stores, trainers, veterinarians, dog walkers, and groomers can be beneficial as a referral source for boarding. Even networking with competing dog boarding facilities can be beneficial as they can refer their customers to other facilities when they are fully booked.
One important task while working on the marketing is developing an online presence. A website developer may be out of the budget, but Wix makes it easy for non-technical people to get a website running quickly and affordably.
Step 9: Get Business Insurance
There are several types of insurance to consider when starting a pet boarding business. A few of these include:
– General liability insurance protects the business if a customer is ever injured while on the property, like if they slipped or fell.
– Commercial property insurance would protect the business against financial loss if its building and supplies were damaged or lost because of an event like a fire.
– Worker’s compensation insurance helps to cover expenses like medical bills or lost wages if an employee is ever hurt while working.
The cost to insure a pet boarding business will vary depending on factors like the business’s location, the number and type of pets that it cares for, and the number of employees on staff. To get the most accurate understanding of what insurance may cost, request quotes from multiple insurance providers. When comparing the quotes, pay attention to variables like coverage limits and exclusions, premiums, and deductibles.
Step 10: Hire Employees
While a business owner may be able to initially run a small pet boarding facility, as that business grows, it will be time to hire additional help. Payscale reports that kennel managers earn an average of $34,454 per year. According to Glassdoor, kennel attendants earn an average of $22,980 per year.
In addition to budgeting for employee salaries, a business will also need to budget for expenses like workman’s comp insurance, paid time off, and health insurance contributions.
Related: Hiring your first employee
Step 11: Set up an Accounting System
Setting up an accounting system 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.
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 pet boarding business?
The cost to start a pet boarding business will depend on the business’ size and location. Smaller businesses can cost around $20,000 to start, while larger operations carry startup costs closer to $80,000 or higher depending on the facility cost.
Some common startup costs for a pet boarding business include:
– Building renovation costs
– Pet kennels and cages
– Supplies like food bowls and cleaning supplies
– Inventory like food, toys, and grooming products
– Furniture for a waiting area and check-in desk
How much can a pet boarding business owner make?
A pet boarding business’s revenue will depend on many factors, like the business’s location, competition, services provided, and profit margins. According to PayScale, dog kennel owners make an average of $50,868 per year, though that income ranges from as low as $20,000 to as high as $122,000.
While pet boarding on its own can be a profitable business, many boarding facilities offer additional services that can increase profits. Services like nail trims, grooming, training, and more aren’t only convenient for pet owners but can make for valuable upselling opportunities. Additional options include offering extra playtime sessions, special treats, and organic grooming products – all of which can increase your profits from a single pet’s stay. Some boarding facilities also branch out into dog daycare. While it may be tempting to offer many different services, it’s best to keep things smaller and more manageable as you start. Choose the top few services you feel will most appeal to your audience and then grow from there.
What skills are needed to run a pet boarding business?
A pet boarding business owner doesn’t need a business degree to start the business. But, certain skills and experiences can increase the chances of the business being successful.
Pet care knowledge. A business owner should be knowledgeable about how to care for the types of pets the business will be boarding. Experience handling those pets is valuable and will allow for better, safer care.
Pet first aid experience. Sometimes pets may need illness or injury treatment while in boarding. Formal pet CPR or pet first aid training and certification can help to train boarding business owners in how to handle emergencies and get pets the help they need.
Customer service skills. Great customer service will help a business to stand out. Business owners with customer service experience and talents can build customer loyalty.
Attention to detail. Attention to detail is so important in every element of this business, from giving pets their needed medications to making sure that a pet is acting normally. Business owners should be detail-oriented and involved in every aspect of the business.
Management experience. As a business grows, the owner may need to hire additional staff to help. Experience in hiring, training, and managing employees will be important.
Are there grants to start a pet boarding business?
It’s extremely rare to find a grant to start a pet boarding 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 is the NAICS code for a pet boarding business?
The NAICS code for a pet boarding business is 812910.
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?