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How to Start a Pet Store

How to Start a Pet Store

How to Start a Pet Store

How to Start a Pet Store

How to Start a Pet Store

Are your pets like family members, and do you spoil them with all of the latest special treats and accessories? You’re far from alone – Americans treat their pets like human members of their family, and it’s shaping the demand for quality pet products and foods. If a career that focuses on your love of pets sounds ideal, then opening a pet store could be an exciting business venture. As a store owner, you’ll have the chance to help pet owners discover those new must-have items and choose foods and treats that prioritize their pets’ health.

Business Overview

Pet stores provide pet owners with convenient locations to stock up on pet supplies, dog food, live animals, and other items. While online pet stores create plenty of competition for brick-and-mortar pet stores, local retailers can stand out by offering other services, like dog training and pet grooming. Many customers go to stores because they’re a source of information about their pet’s health and nutrition. A knowledgeable store owner can create a valuable experience that online retailers can’t provide to customers.

Many pet stores offer a comprehensive inventory for cats, dogs, and small animals, while some stores may specialize in reptiles or birds. Boutique pet stores target a specialized niche and offer high-quality items that may carry higher prices and allow pet owners to truly pamper their pets. It’s common for stores to allow owners to bring their leashed pets in, adding to the shopping experience and sense of community and engagement that these stores work to create.

When planning to start a pet store, do plenty of market research. Look into competitors, including big box stores that offer pet products, and make sure that there’s a local need for a pet store. Research the pet owners in the area. What types of pets do they have? Where are they currently buying their pet products? Is there a shortage of grooming and training services? What products do these pet owners want to buy but can’t find locally?

Industry Summary

According to IBIS World, pet stores experienced significant growth from 2015 to 2020 that was spurred on by improving household finances and increasing pet ownership, particularly among millennials. With pet owners turning to premium foods and designer accessories, product sales expanded. By 2021, the pet store industry reached a $21 billion market size. A total of 18,595 businesses employed 129,113 staff.

When it comes to pets, Americans spend a lot on their pets. The American Kennel Club estimates that annual costs for a pet averaged $2,500 for things like food, grooming, vets, etc.

IBIS World predicts that the industry will continue to grow from 2020 to 2025. Improved economic conditions will allow families to spend more on their pets. There is steep competition in this industry, though, and brick-and-mortar stores will have to compete against mass merchandisers and online retailers. Still, with careful branding and strategic program offerings, these businesses can stay relevant and competitive. PetSmart Inc., Petco Animal Supplies Inc., Pet Retail Brands, and Pet Supplies Plus currently hold the largest share of the pet store market.


Industry Trends

Many trends are shaping the pet store industry. Pet Food Experts reports that pet brands are increasingly using storytelling to sell, telling the stories behind their businesses, and building connections with customers. This trend appeals to a customer’s emotions and uses that to build customer loyalty.

Technology is also shaping up to be a major trend that will influence the pet industry. Smart leashes, pet cameras, and automatic toys and feeders are already gaining popularity, and it’s likely that more of these technology-driven products will continue to be released. Stores can strategically position these products in windows and near entrances to catch customers’ eyes and build excitement.

Pet stores are also starting to offer customers multiple ways to shop. While customers can always come into a brick-and-mortar store to browse and shop, many of these stores are also creating websites for shopping. Customers can opt to purchase products online and then have those products shipped to them or pick them up at the store to save on shipping.

According to Pet Food Industry, health and wellness benefits of pet foods are a high priority for many pet owners. Pet food manufacturers are responding to those demands and are increasingly producing foods with healthier ingredients and formulas designed for pets with certain health conditions. Limited ingredient diets, foods with ancient grains, foods with high protein contents, and foods made with superfoods are becoming more popular.

Consumers are increasingly aware of how foods are produced, and they’re seeking out foods that are well-sourced and carefully manufactured. This has resulted in an increased demand for foods that are made in the U.S.A., as well as for foods that use ethically sourced ingredients.

Target Market

Most pet stores will market to adults who own pets. Depending on a store’s business model, it may adopt a slightly different audience. A store specializing in top-quality foods will market to pet owners who are highly concerned about their pets’ health and who have the disposable income to afford higher-priced foods. Some stores may focus on exotic fish and aquariums.

What skills are needed to run a pet shop?

Starting a pet business doesn’t require a business degree, but certain experiences and skills can help.

Pet ownership experience. Previous pet ownership experience is a major asset for a pet store owner. This experience gives a business owner an understanding of pet care basics, an awareness of the products available, and the ability to empathize with and understand the store’s customers.

Knowledge of pet nutrition. Pet nutrition is a hot topic right now. A store owner with a background in pet nutrition will be able to select quality products that meet customer needs and serve as a resource to customers, helping them choose the right foods for their pets.

Awareness of pet industry trends. An awareness of the pet industry trends will help a store owner choose inventory that will meet customer needs.

Customer service skills. Great customer service skills are a must. A store owner should be able to answer customer questions, solve problems, and ensure that every visit to the store is a great experience.

Management experience. Previous experience in hiring, training, and managing staff will help a pet shop owner to assemble a team of quality employees who represent the store well.

Checklist for Starting a Pet Store

Starting a pet store can be an incredibly rewarding experience, but it’s important to make sure you’re prepared for the challenges ahead. Use this checklist to help get your business off on the right foot.

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 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

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: Name the Business

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

Step 4: Select your Location

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

Step 5: Register for Business Licenses and Permits

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

Step 6: Find Suppliers

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

Step 7: 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 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

Step 8: 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 9: Get your Marketing Plan in Place

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

Every business is going to need a logo. Make a professional logo in no time with the free logo makers from BrandCrowd and Canva.

Step 10: Get Business Insurance

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

Step 11: Hire Employees

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

Step 12: 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.

Related: Setting up the accounting for your business


How much does it cost to start a pet store?

Starting a pet store can require a significant initial investment. Even a smaller store can cost $60,000 or more to start, while a larger, more comprehensive store can cost $100,000 and up. These expenses are largely due to the cost of inventory, which is a major investment.

Some common startup costs for a pet store include:
– Store renovation costs
– Shelving and display units
– Inventory
– Supplies, including shipping supplies
– Website development
– Signage

How much can a pet store owner make?

Pet store profits will vary depending on factors like the store’s size, specialty, profit margins, and competition. Pet stores will sell several pet supplies and accessories, like pet toys, treats, food, aquariums, cages, pet accessories, and more. Additionally, stores can offer services like grooming and dog training to increase their profits and encourage repeat customers. Expanding to selling through your online store, can also help to increase profits.

Looking at expenditures on pet food and treats, the National Pet Owners Survey conducted by the American Pet Product Association found that dog and cat owners spend approximately $250 annually on pet food and $70 on treats.

Are there grants to start a pet store?

It’s extremely rare to find a grant to start a pet store. 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 store?

The NAICS code for a pet store is 453910.

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?

American Pet Products Association
Independent Pet Retailer Association
Pet Industry Distributors Association
World Pet Association

How to Start a Pet Store

How to Start a Pet Store

Greg Bouhl

Greg Bouhl

Welcome! My name is Greg Bouhl, and I have over 21 years as an entrepreneur, educator, and business advisor, where I worked with over 1,600 entrepreneurs to help them start and grow their businesses.

As a small business advisor, I got fed up with clients finding inaccurate and outdated information when they were researching how to start a business online, so I launched StartingYourBusiness.com to be a trusted resource.

I'm constantly adding and revising this site, but if there is a question you have about starting a business or need help finding something, please ask!