Are you a dog lover with an entrepreneurial spirit? If so, starting a doggie daycare might be the paw-fect business opportunity for you. Offering a safe and fun environment for dogs to socialize and play, doggie daycares have become increasingly popular in recent years.
However, it takes more than just a love for dogs to succeed in this industry. In this article, we will provide aspiring entrepreneurs with an overview of the doggie daycare business, essential steps to get started, and answers to common questions.
Business Description
A doggie daycare offers daytime supervision and playtime for pets while pet parents are occupied. Center services resemble human daycares, providing socialization, meals, play, training, and sometimes grooming and overnight boarding.
A dog daycare business generates money through a variety of pet services such as dog walking and exercise, grooming and pampering, feeding, or behavior training. Services may 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.
While similar, there are differences between a doggie daycare and a dog kennel. A doggie daycare typically focuses on socializing and playing during the day, such as when the owners are at work. On the other hand, a dog boarding business primarily provides extended care while the owners are away, like when they go on vacation. Though some facilities offer both services, they often focus on just one area.
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Industry Summary
The doggie daycare market is a portion of the overall pet boarding industry. Statistics on doggie daycares aren’t tracked, but the boarding industry is a $6.7 billion market in the U.S.1 This industry is expected to grow for several reasons. First, modern lifestyles often lead to long work hours, leaving many pet owners concerned about their dogs being left alone for extended periods. Additionally, pet owners are actively seeking socialization and exercise options for their dogs, knowing that a well-socialized and stimulated dog is more likely to have a happy and balanced life.
Steps To Start A Doggie Daycare Business
Step 1: Write a Business Plan
With all the moving parts to keep track of, starting a doggie daycare is a huge undertaking, and one of the most important pieces of the puzzle is your business plan. Your business plan provides a blueprint for success, guiding you through the startup process. Here are a few of the areas of the business plan to focus on:
Market research: Including market research in your business plan allows you to understand the demand for doggie daycare services in your area. It helps you identify your competition, target customers, and their specific needs. By gathering this information, you can spot local opportunities and a way to determine pricing.
Operational planning: Outlining your operational strategies is another important section of a business plan. This includes detailing the services you will offer, such as group play sessions, grooming, and training. Additionally, you’ll work through what you need in a facility to ensure sufficient space and amenities for the dogs, along with the staffing needed.
Financial projections: Perhaps the most important part of the business plan is estimating startup costs and calculating financial projections. By considering expected revenue and expenses, you can realistically estimate if your doggie daycare will be profitable.
Related: How to write a business plan
Step 2: Source Funding
Securing funding is often the most challenging step in starting a doggie daycare. Here’s a look at the most common types of funding for a doggie daycare:
Personal investment: The first source of funding to assess is your personal savings. Before seeking outside funding sources, look at how much personal savings you have that can finance the business. If personal savings aren’t sufficient to cover all startup costs, you’ll need to look at outside funding sources.
Commercial lenders: Banks and credit unions are the most common outside sources of funding. Lenders generally require borrowers to invest at least 15% of their personal funds towards the total cost of the project, in addition to a good credit score and collateral. If a bank requires additional security to back the loan, they might use a Small Business Administration (SBA) loan guarantee. This can provide the lender with extra assurance and make it easier to obtain a loan.
Friends and family: Borrowing from friends and family is another way to fund your business. This option can be more flexible and less formal than traditional lending, but put any agreements in writing to avoid any conflict or misunderstanding in the future.
Microloans: Microloans can be an alternative funding option for smaller funding needs or when traditional lending options are unavailable. These are provided by local economic development organizations, and some also provide business training and mentorship.
Related: Finding the money to start a business
Step 3: Register the Business
Starting a doggie daycare requires not only a passion for pets but also an understanding of the legalities involved in establishing and running a business. From choosing the right structure to obtaining the necessary permits, here’s an overview to help you navigate the legal aspects:
Choosing a business structure: There are four types of structures to consider, and each has its unique advantages and implications:
Sole proprietorship
- Ideal for small, low-risk businesses.
- Easiest and least expensive option to set up.
- Offers no personal liability protection.
General partnership
- For businesses with multiple owners.
- Simple to establish.
- Partners share liability.
Corporation
- Provides personal liability protection for the owners.
- More complex and costly to set up and maintain.
Limited Liability Company (LLC)
- Combines the simplicity of a sole proprietorship or partnership with the liability protection of a corporation.
- Flexible tax options.
- Popular choice for small to medium-sized businesses.
While a sole proprietorship is the easiest to establish and requires less paperwork, LLCs and corporations provide liability protection for the business owner.
Related: Comparison of business structures
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:
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Business name registration: After registering the business structure, you may need to register your business name. This process will vary depending on what business structure you pick. Sole proprietors and partnerships will often be required to register a “Doing Business As” (DBA), while corporations and LLCs register with the state during the formation process.
During this time, it’s also a good idea to check if the name you want is available as a web domain, even if you’re not ready to set up a website yet.
Related: Finding a domain name for your business
Obtain business licenses and permits: Doggie daycare regulations and licensing are typically administered under the Department of Agriculture and/or Health Department. Be sure to research and understand the specific permits and licenses required in your area. Additionally, some counties and cities have their own local laws, regulations, and inspections for a doggie daycare to operate legally.
In addition, there will likely be a variety of general business registrations needed before opening. These could include a business license, seller’s permit, and Employer Identification Number (EIN).
Related: State guides for general business licensing
Step 4: Acquire & Set Up Your Facility
Once you have registered your business and obtained the necessary permits and licenses, the next step is to think about the operational side of things. Here are some steps to consider:
Your first operational task is to find a suitable location for your doggie daycare. When considering where to set up your doggie daycare, several factors come into play. First is the size of the facility. You want to ensure you have enough space for the dogs to play, rest, and eat comfortably. Accessibility is another key factor. Your dog daycare facility should be easy for clients to find and reach, ideally situated in a place with plenty of parking. Zoning regulations are also essential to consider. Some areas may not allow businesses like doggie daycares, so do your research to ensure your chosen location complies with local laws.
Once you’ve found the perfect location, it’s time to equip your daycare. This means investing in crates for resting, bedding for comfort, and a variety of toys to keep your canine clients entertained, in addition to a safe outdoor play area for the dogs to run and play. Cleaning supplies are also a must to maintain a hygienic environment.
With the physical aspects of your daycare sorted, you’ll need to think about managing bookings and payments. A system or software designed for this purpose can streamline these tasks, making it easier for you to keep track of your clients and finances. Various options are available, from simple booking systems to comprehensive software that manages bookings and payments and even sends reminders to clients.
Step 5: Hire Staff
When starting a doggie daycare business and preparing to hire employees, there are some important responsibilities that come with being a new employer. Every state has different requirements, but here is a brief overview of the key legal requirements that should be taken care of before hiring:
Obtain an EIN: An Employer Identification Number (EIN) is a unique identifies that is required for tax purposes and to report employment taxes to the IRS.
Employment eligibility: You must verify that all employees are legally eligible to work in the United States. This involves completing the I-9 form for each employee and retaining these forms.
State hiring requirements: Each state has its own set of requirements when it comes to hiring employees. This includes forms and reporting requirements that need to be fulfilled before bringing on new hires. Familiarize yourself with the specific requirements of your state.
Worker’s compensation: Most states require businesses to have worker’s compensation insurance, which provides protection for employees in case of work-related injuries or illnesses.
Labor laws: Familiarize yourself with federal and state labor laws, including minimum wage and overtime requirements, break time regulations, and any specific laws related to employee rights and protections.
Related: State guides for hiring your first employee
Step 6: Prepare to Open!
As you near the final stages of starting your doggie daycare, there are several additional steps to consider. Each doggie daycare will have unique needs, but here are a few of the common tasks:
Business insurance: Obtaining the right insurance is essential for any business, especially one involving animals. Common types of insurance for a doggie daycare include general liability insurance, which covers injuries or damages occurring on your premises, and professional liability insurance, which can protect you in case of negligence claims. Additionally, consider property insurance to protect your facility and business interruption insurance to cover losses in case your business has to temporarily close.
Setting up bookkeeping: Establishing a solid bookkeeping system is necessary to track your daily transactions, manage taxes, and prepare financial statements. You can opt to hire a professional bookkeeper or use accounting software to maintain your financial records.
Opening a business bank account: Creating a dedicated business bank account simplifies accounting and tax preparation and can help in tracking business expenses and revenues more efficiently.
Developing policies: Formulating clear policies for client intake, health requirements, and emergency procedures helps ensure the safety and well-being of the dogs in your care and provides clear guidelines for your staff and clients.
Creating waiver forms: Prepare waiver forms for pet parents to sign, covering aspects like medical care authorization and emergency contact information. These waivers help manage liability and ensure that you have the necessary permissions to act in the best interest of the dogs under your care. RocketLawyer and Law Depot have free and inexpensive templates that may be helpful.
Create a marketing strategy: Developing a marketing strategy is important for introducing your new business to potential customers. This can include creating a memorable logo, building a user-friendly website, and utilizing social media platforms. Also, consider traditional marketing avenues like local advertisements or community events to increase visibility in your area.
Preparing for the grand opening: Plan a grand opening event to create buzz and attract initial clients. This might include special promotions, partnerships with local pet businesses, or an open house to showcase your facility.
Common Questions When Starting A Doggie Daycare
How much does it cost to start a doggie daycare business?
Starting a doggie daycare requires a significant initial investment, with total startup costs varying based on location, size, and the level of services offered. On average, potential owners can expect to spend between $40,000 to $100,000 to get their business up and running. Below is a breakdown of these costs:
Facility leasing & renovations: Budget $30,000-$80,000 for a usable commercial space deposit, first month’s rent, plus buildout or renovations such as kennels, soundproofing, flooring, ventilation, play zones, and outdoor areas. If purchasing a facility instead of leasing, the startup cost will go up.
Equipment and supplies: Another substantial cost is the investment in equipment and supplies. This can include everything from crates and bedding to toys and cleaning supplies. Depending on the scale of your operation, this could range from $2,500 to $10,000.
Business registration: The cost of registering your business can vary based on state licensing and the type of business entity you choose. On average, expect to spend around $300 to $1,000.
Insurance: The initial cost of business insurance for a doggie daycare can range from $1,000 to $3,000.
Marketing: Marketing expenses can include designing a logo, creating a website, printing business cards and flyers, and potentially using online advertising or social media campaigns. Initial marketing costs can range from $1,000 to $5,000, depending on your strategies and the scale of your marketing efforts.
How profitable is a doggie daycare business?
Dog daycare businesses can be profitable, with multiple revenue streams contributing to their profitability. These include daycare services, overnight boarding, grooming services, and the sale of pet-related products.
In this example, let’s assume that a dog daycare charges $30 per day per dog for daycare services. If the daycare can accommodate 20 dogs per day, the potential daily revenue is $600. If the daycare operates 22 days a month, the monthly revenue is $13,200.
On the expense side, let’s assume the following monthly costs:
– Rent – $3,000
– Part-time salaries for two employees – $4,000
– Utilities – $500
– Food and supplies – $1,000
– Miscellaneous expenses – $700
The total monthly expenses would be $9,200.
Subtracting the total expenses from the total revenue gives a monthly profit of $4,000 ($13,200 – $9,200), which equates to an annual profit of $48,000.
It’s important to note that these are rough estimates, and actual profits can vary.
What skills are needed to run a doggie daycare business?
Fur friendly: We are stating the obvious here, but it’s vital that you and your staff 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, showing authority, and enjoying 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?
