We've all seen Paris Hilton's indulgence on her dogs, and some industry analysts suggest that the celebrity dog culture has made premium pet products a booming industry. From deluxe travel cases to custom beds, fancy strollers to jeweled collars, nearly every product has been created for our furry friends. And perhaps unsurprisingly to many animal lovers, this industry did well even in the down economy. As folks were cutting their spending, they still took care of their pets with luxury products (perhaps in an effort to keep up with friends or fellow owners). A luxury pet product business may do best in a resort destination or somewhere where discretionary income is high. Whether you decide to manufacture your own pet products or buy from existing manufacturers (Total Pet Business magazine annually publishes a list of their best new products), your overhead is relatively low.
Grooming/Photography
Again in the upscale category, pet grooming and professional photography is a booming industry in 2010. You need to be able to bathe, clip, and clean, but you also will be counted on to detect skin abnormalities or medical issues that a veterinarian should inspect further. Petgroomer.com, the industry's largest internet resource, reports that career opportunities are nearly endless in this field because there are more than 4,000 dogs and cats for every U.S. grooming business. Dunn breaks down the expected costs for a grooming salon below, but it is based on size of the operation and whether it is a mobile or fixed location:
• Fixtures & equipment: $1,000 per station/tub (average 3-10 per store based on size)
• Mobile grooming vans: $5-$15,000 based on used or new, and fuel, insurance and maintenance approximately $500-$1000/month
• Marketing: the largest variable expense that you cannot afford to be cheap on. Plan $5,000-$10,000/month
• Hiring licensed professional groomers key for credibility
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How to Start a Pet Care Business: Digital or Physical Location?
Once you've decided what type of store you want to open, there are three types of business models for entrepreneurs looking to enter the pet market, and they don't differ greatly from any other industry. You can open a traditional brick-and-mortar shop in your neighborhood, a purely virtual company with a website and buying/shipping options, or a hybrid model of both, which may be the most profitable in many ways. The main variable in this equation is cost of space, dependent upon the state, location, and size.
Brick-and-mortar shop
Opening a physical location can be a smart decision once you do your market research, ensure that the pet owners in the area you're looking at are underserved and will fit the niche small business you're going to start, and cost is not extraordinary. If you attempt to open a large general store, the cost expenditures are much higher because of your lack of focus. As you try to offer more products, you incur more cost and lose any form of specialization. But opening in an area where there are lots of pet owners and not many specialized options can be a good decision. In terms of cost, you'll need to consider rent negotiation, utility costs, tenant improvements, alarm and fixtures.
Internet site
The advancements of the web have made starting an Internet-only pet business considerably easier and offers a great profit margin. In terms of costs, your biggest expenditures should be in design and search engine optimization, so consumers can actually find your products. If you're specializing in raw, organic foods, you need to make sure you're one of the top search results when somebody types that into Google. Again, focus is key as opposed to being a larger, general retailer.
"To me, the biggest mistake that Internet entrepreneurs make here is looking only at their sales," Lechtner says. "You need to do a really competitive analysis (perhaps from a deeper analytics service like Compete.com) to see where your consumers are coming from and what type of consumers they are."
If you know that users are coming there because of great user reviews of your products on Yelp, you should make it easy to find the product, probably by putting it on your homepage. Another reason Internet-only business can succeed is that many manufacturers will drop/ship products (in other words, ship directly from their factory to the customer). So your main cost is tied to making your website stand out.
Hybrid shop
Opening a physical location but also shipping products out of the back of your store, off an established Internet presence, can be quite profitable. This will require extreme focus and you'll need to establish your credibility and specialization in one of the two spaces before you're profitable in both, but it can be a good way to capitalize on the Internet and traditional markets.
"Most brick and mortar store locations also have an online store," says Dunn. "Fulfillment itself would come from the store whereas online-only shops need to fulfill orders via a fulfillment center or direct arrangement, increasing the cost of online-only goods."
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How to Start a Pet Care Business: Keep Your Focus
While it is tempting to want to touch every part of this industry to cover all of the above services, it's important that you remain focused as a new business owner. Don't try to sell unique foods, offer grooming services, sell travel cases and dog sweaters, or more. Less is more here, as when you can establish that you do one thing well, you'll retain a loyal customer base that continues to come back.
"The more that you stay focused on what you're doing, become an expert at it and refine the concept to satisfy a majority of your customers, the better chance you have to maximize profitability on your investment," says Lechtner. "The more you try to scrape off the fringe businesses and get a little more of the pie (as is natural with success), the more you'll be diluting your core competencies. If you look at the expenses and the effort of expanding from a specialty shop with a core focus to a more broad approach, you're diluting your investment of time, money, inventory, marketing and more. And customers can see that. That's when they get unhappy, and you start to lose business."
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