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

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 store, 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 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
 

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.

Related: Tips and ideas for naming a pet store

A brick-and-mortar store will face competition from online retailers, so focus on ways that you can provide value to your customers. Special events, pet owner groups, and other social opportunities can create a sense of community that customers won’t find online. Work to become highly knowledgeable about pet nutrition and health and use that knowledge to help customers find products that meet their needs. This can be a great way to establish a relationship and connection with customers, encouraging them to return to your store in the future.

Location costs will vary depending on the store’s size, location, and amenities. A store in a prime retail location will carry a higher rent, but it can also boost general public awareness of the business.

Related: Choosing a business location

Pet shop businesses are subject to animal welfare laws in the United States and will have licensing and regulations under federal and state laws. At the federal level, there is licensing required under the Animal Welfare Act and the US Department of Agriculture (USDA) Animal and Plant Health Inspection Service (APHIS). At the state level, there is often additional legislation on the care and sale of animals. The Humane Society of the United States has a list of pet store laws by state.

There are also general business registrations to research, some of which may include a business license, sales tax permit and Employer Identification Number.

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

After registering the business, it will be time to contact suppliers and wholesalers to get pricing for the products you want to sell.

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 store is another. In order to get a small business loan, the borrower(s) will need to have good credit and be able to 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.

Pet stores can explore a variety of marketing activities to generate new and returning customers. Common marketing activities include social media marketing, online advertising, print advertising, radio advertising, event sponsorship, and more. Some stores establish customer loyalty programs or referral programs for services like grooming and training. Marketing costs will vary depending on the type of activity that’s performed.

Related: Low-cost ideas to market a new business

There are several types of insurance to consider when starting a pet store. A few of these include:
– General liability insurance helps to protect the business if a customer is ever injured while on the property. It can help to cover expenses like medical bills and legal fees.
– Commercial property insurance helps cover losses the business might face if its store or inventory is damaged in an event like a fire.
– Worker’s compensation insurance covers expenses like medical bills that the business might face if an employee were ever injured while on the job.

The cost to insure a pet store varies from provider to provider. Other factors, like the value of the business’ inventory and the number of staff on payroll, can also affect policy costs. To get the best idea of what to budget for insurance, request quotes from multiple providers. When comparing the quotes, consider not only the differences in the premiums but also the differences in the deductibles, policy exclusions, and coverage limits.

Related: Common types of insurance a business may need

Any pet store will need multiple employees. According to PayScale, the following are common hourly pay rates for pet store employees:
– Cashier/sales associate – $10 per hour
– Store manager – $15 per hour
– Dog trainer – $11 per hour
– Dog groomer – $11 per hour

These are just some of the expenses that come with hiring staff. A store’s budget will also need to include workman’s comp insurance, unemployment insurance, and paid time off.

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