After coming up with an idea, the next step in starting any business should be to write a business plan.  Not only will a bank require you to have one, but multiple studies have shown that a business plan helps increase the odds of starting a successful business. A properly used business plan will serve the entrepreneur as the road map for their business, helping them achieve their business goals.

Related: How to write a business plan

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 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 grooming 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.

An LLC is created through a state statute. 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
 

Finding the perfect business name can be challenging. Not only does your business name have to resonate with your customers, but it also has to be available. To find out if your business name is available, check with your state’s secretary of state office. You will also want to make sure you are not in violation of federal trademarks with the United States Patent and Trademark Office.

Related: Tips and ideas for naming a grooming business

While most pet grooming shops don’t necessarily require a prime, high-traffic location storefront, it is usually important to be accessible – located close to where people traveling to and from work can easily get to your location.  Also, since you are working with animals that will sometimes be noisy, be sure to check zoning and covenants in case you have a not-so-friendly neighbor

The type of pet grooming business you start will probably be the biggest factor affecting your facility’s cost.  The most cost-effective option is to operate out of your own home.  While this saves the cost of renting or purchasing a building and is often a good choice when getting started, it may limit the scale and image of the business.  Hiring additional groomers to expand your business may not be an option if you are a home-based business as well.  Be sure to verify whether you can operate a business from your home if you plan to be home-based. This includes checking HOAs, city/town/village zoning, and local ordinances.

The second option is to rent or purchase a brick-and-mortar building to operate the business.  The cost per square foot varies depending on the area’s affluence, proximity to traffic, and demand for properties, among other factors.  You want to choose a location convenient for pet owners to drop off and pick up their pets while not spending too much on rent or mortgage payments.  The size of the building should be appropriate to allow for future plans for the business.

Pet grooming businesses have very distinct spatial needs, and the building must be able to accommodate those areas.  An effective floor plan design for a grooming business will typically contain four main spaces: a receiving lobby, a pet holding area, a bathing and drying room, and a styling and grooming room.

The third option is to take your pet grooming business on the road.  Mobile dog grooming has grown in popularity in recent years thanks to the convenience it provides pet owners and the freedom for the business owner.  Used and refurbished vans or trailers are fairly easy to find, making this option cost-effective compared to a building.  The most common issue mobile groomers face is failing equipment, like vehicles or power generators.  When going mobile, be sure to have one or more backup plans if this happens so that customers won’t be inconvenienced.  Another pitfall to a mobile pet grooming business is running the risk of wasting valuable time and fuel traveling between clients.  This can be avoided by keeping an efficient appointment schedule that limits travel distance each day.

Related: Choosing a business location

While there is no business licensing exclusive to groomers, there are some general business registrations that may be needed, which include a business license, sales tax permit, Employer Identification Number, and Occupancy Permit.

Even though there is no licensing required to provide grooming services, being certified may be worth looking into.  Completing an accredited educational program provides not only proof that you have received professional training, but it will provide the necessary skills to conduct a professional service-based business.  Customers will be very demanding of their pet’s care and appearance, and while you can learn how to groom on your own, a program will get you up to speed much faster.

There are several options for getting a pet grooming certification, with many organizations offering both online and in-person programs of study.  While there is currently no industry oversight or legal requirement to be certified, you should consider completing a certification course prior to engaging in business for the sake of credibility and offering the highest quality services possible.  And as with all skilled trades, continuing your education by periodically attending courses is a good way to stay on top of the industry trends and keep ahead of your local competition.

After you have chosen your business entity and filed for an assumed name certificate or received your articles of incorporation, you can then apply for your employer identification number or EIN. The EIN number is necessary for your business, even if you do not plan to hire additional pet groomers. The EIN works like a social security number for your business and many vendors will require an EIN number to place orders. To file your EIN, visit the IRS website.

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

Coming up with a good business idea and having the skills to run it are one thing, but getting the funding to start a grooming business is another.  Fortunately, the cost to start a new grooming business is relatively low; however, getting the funding to start can be difficult.  Banks are typically going to want the borrower to have good credit and personally invest 15-25% towards the total start-up costs.

Related: Finding the money to start a business

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.

Also, consider how you will take customer payments. Will you have a point of sale or POS system? If so, does your bank offer POS systems for businesses, or will utilize systems like Square, Shopify, PayPal for Business, or Venmo?

With the increase in the number of competitors comes a need for effective marketing and advertising.  Marketing efforts don’t have to be expensive to be effective.  The most effective form of marketing is by generating word-of-mouth referrals.  According to a 2016 study conducted by Nielsen, 82% of consumers seek a personal recommendation before making a purchase, and 92% of consumers trust a personal recommendation over any other form of advertising.  Creating a referral rewards system is a great way to ensure client loyalty and attract new clients.

Another marketing tactic for pet groomers is to network with local veterinarians and pet service professionals who do not offer to groom.  Over time, those relationships could lead to your business being the professional recommendation of those established business owners.

You can also leverage the power of social media to gain brand name exposure.  Using Meta (Instagram and Facebook’s targeted advertisement platform) can allow you to create ads that reach pet owners within a certain distance of your business.  This is a great opportunity to run a limited-time offer and to promote it online, reaching even more pet owners who may not know of your service offerings.

Related: Low-cost ideas to market a new business

Pet groomers operating out of a shop will likely want general liability insurance to protect them from a customer slipping and falling or from a bite.  Mobile groomers will likely need to get a policy as most personal auto insurance policies don’t cover commercial activity.

Related: What types of insurance does a pet grooming business need?

For entrepreneurs wanting to grow a pet grooming business larger than what they can do by themselves, hiring employees will be necessary.  As more competitors enter the market, finding and hiring skilled workers who will maintain the business’s quality of service and reputation is an important factor in ongoing success.  This results in needing to pay higher wages to skilled groomers.  The minimum wage will apply to the front-line employees working at the front desk and answering phones.

Related: Hiring your first employee

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.

Related: Setting up the accounting for your business