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Written by: Esther Strauss
Esther is a business strategist with over 20 years of experience as an entrepreneur, executive, educator, and management advisor.
Edited by: David Lepeska
David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.
Published on May 22, 2021
Investment range
$13,550 - $20,100
Revenue potential
$182,000 - $730,000 p.a.
Time to build
1 – 3 months
Profit potential
$36,000 - $145,000 p.a.
Industry trend
Growing
Commitment
Full-time
Pay attention to these important factors as you establish your pet store:
Starting a pet store has pros and cons to consider before deciding if it’s right for you.
Overall spending on pets in the US is nearly $110 billion annually, more than double what it was a decade ago.
Trends in the pet store industry include:
Challenges also exist in the pet store industry, including:
Startup costs for a pet store range from $16,000 to about $20,000. The main costs are for space rental, preparation of the space, and inventory.
Let’s dive into an example.
| Start-up Costs | Ballpark Range | Average |
|---|---|---|
| Setting up a business name and corporation | $150 - $200 | $175 |
| Business licenses and permits | $100 - $300 | $200 |
| Insurance | $100 - $300 | $200 |
| Business cards and brochures | $200 - $300 | $250 |
| Initial inventory and supplies | $6,000 - $8,000 | $7,000 |
| Rent | $1,000 - $2,000 | 1500 |
| Fit-out cost | $5,000 - $6,000 | $5,500 |
| Website | $1,000 - $3,000 | 2000 |
| Total | $13,550 - $20,100 | $16,825 |
Prices for pet products vary. Your profit margins on products will be about 40% and after rent and overhead, your overall profit margin should be about 20%.
In your first year or two, your average daily sales could be $500, bringing in a healthy $182,000 in annual revenue. This would mean $36,000 in profit, assuming that 20% margin. As your store gains recognition, sales could climb to $2,000 per day. With expected annual revenue of nearly $730,000, you’d make more than $145,000 in profit.
There are a few barriers to entry for a pet store business. Your biggest challenges will be:
Now that you know what’s involved in starting a pet store business, it’s a good idea to hone your concept in preparation to enter a competitive market.
Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.
Research pet stores in your area to examine their products, price points, and customer reviews, as well as what sells best. You’re looking for a market gap to fill. For instance, maybe the local market is missing an organic pet food store.
You might consider targeting a niche market by specializing in a certain aspect of your industry, such as specialty pet toys and treats.
This could jumpstart your word-of-mouth marketing and attract clients right away.
You should choose the most in-demand products to stock in your store, and as wide a variety as you can fit. You might also consider adding additional services such as pet grooming.
Here are some of the most common products you might find in a pet store:
For those looking to venture beyond the conventional, here are some specialized products:
You’ll need to research the market to see what various products are selling for but expect to markup products by between 30% and 40% from wholesale prices. Overall, after rent and overhead, you should aim for a profit margin of about 20%.
Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price point. Remember, the prices you use at launch should be subject to change if warranted by the market.
Your target market is pet owners, which is obviously a very broad market. You’ll need to spread out your marketing efforts to include sites like Instagram, Facebook, and LinkedIn. You’re also mainly targeting people in your local area, so you can do local promotions.
Choosing the right location for your pet store is crucial for attracting customers and ensuring its success. Look for a spot in a busy commercial district with high foot traffic, such as a shopping mall or a popular downtown area.
Depending on the type of pet store you plan to start, you may also want to consider the proximity to complementary businesses, such as veterinary clinics or pet training centers.
When selecting a location, ensure that it meets all necessary safety and regulatory requirements for pet stores. By strategically choosing the right location, you can establish a profitable and successful pet store that provides high-quality products and services to customers and stands out in the competitive pet industry.
In the early stages, you may want to run your business from home to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles and you’ll need to rent out a storefront. You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.
Here are some ideas for brainstorming your business name:
Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool below. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these.
Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that set your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.
Here are the key components of a business plan:
If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.
Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.
Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business!
Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to pet stores.
If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state.
Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your pet store will shape your taxes, personal liability, and business registration requirements, so choose wisely.
Here are the main options:
We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.
Choose Your State
The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN.
Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.
The IRS website also offers a tax-payers checklist, and taxes can be filed online.
It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.
Securing financing is your next step and there are plenty of ways to raise capital:
Bank and SBA loans are probably the best options, other than friends and family, for funding a pet store business.
Starting a pet store business requires obtaining a number of licenses and permits from local, state, and federal governments.
Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits.
You may also need state-level and local county or city-based licenses and permits. Some states require pet stores to have a pet store license. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more.
You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.
This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.
If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.
Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.
Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your pet store business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.
Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account.
Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.
Here are some types of insurance to consider:
As opening day nears, prepare for launch by reviewing and improving some key elements of your business.
Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.
You may want to use industry-specific software, such as LS Retail, PetShop360, or Korona, to manage your purchasing, inventory, sales, and invoices.
Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.
You can create your own website using services like WordPress, Wix, or Squarespace. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.
They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google.
Here are some powerful marketing strategies for your future business:
Unique selling propositions, or USPs, are the characteristics of a product or service that set it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your pet store meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire.
Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your pet store business could be:
You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a pet store, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in pet stores for years and can offer invaluable insight and industry connections.
The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in pet stores. You’ll probably generate new customers or find companies with which you could establish a partnership. Online businesses might also consider affiliate marketing as a way to build relationships with potential partners and boost business.
If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a pet store business would include:
At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need.
Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.
Americans spent over $100 billion on their pets in 2021, and $22 billion of that was in pet stores. You can capitalize on that spending by opening your own pet store. It takes a bit of an investment, but you’ll get a great return on that money.
You’ll be providing quality products to pets in your community and making them smile. It’s important to keep up with the trends so you’ll know which pet products are popular. Now that you know the nitty-gritty of the business, you’re ready to jump in and get your new pet store off the ground!
Pet stores are a $22 billion industry in the U.S., and larger pet stores are very profitable. Markups on pet items are relatively high, so you can achieve decent profit margins.
Yes, small pet stores can be profitable. Markups on pet items are high, so if you get a lot of volume, you can make a good profit. The key is to have a very convenient location and to offer as big a variety of items as you can.
To make your pet store successful, focus on offering a diverse range of high-quality pet products, providing excellent customer service, building a strong online and offline presence, and implementing effective marketing strategies to attract and retain customers.
You can improve your pet store customer experience by creating a welcoming and organized store layout, training knowledgeable and friendly staff, offering personalized recommendations, providing convenient services like grooming or pet training, and actively seeking and incorporating customer feedback to enhance your offerings.
Pet owners often purchase food, treats, toys, grooming supplies, and essential pet care products such as collars, leashes, and bedding. Health and wellness products like vitamins, supplements, and hygiene items are also commonly bought.
Differentiate your pet store business by specializing in a particular niche, such as natural or organic pet products, unique and exclusive product lines, or offering specialized services like pet nutrition consultations or pet adoption events. Create a distinctive brand identity, focus on exceptional customer service, and provide a personalized shopping experience.
Build partnerships with local animal shelters or rescue organizations to promote pet adoption and offer referral incentives. Collaborate with veterinary clinics or pet trainers for cross-promotion and joint events. Establish relationships with local pet businesses like groomers, trainers, or boarding facilities to refer customers to each other.
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