You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple step guide to starting your cat cafe. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a cat cafe?
The startup costs associated with opening a cat cafe business are substantial. Some of the more sizable expenses include:
- Purchasing or leasing a space for the cat cafe
- Building out the space so that it’s feline-friendly
- Buying food preparation equipment for making food and drinks
- Buying cat pods, litter boxes, food and water dishes, food and litter
- Buying the ingredients for preparing customers’ food and beverages
Business owners who want to keep startup expenses low can forgo the food preparation equipment and ingredients. Instead of making dishes and beverages on-site, a cat cafe business can partner with a nearby cafe that’ll make the dishes. Kanchan Singh used this set-up when she opened Crumbs & Whiskers. An employee would take customers’ orders, and then go pick up the food and drinks at a nearby cafe and bring them back to the cat cafe.
What are the ongoing expenses for a cat cafe?
The ongoing expenses of a cat cafe business are substantial. They include rent, utilities, food costs, employees’ wages and all the expenses that come with caring for cats.
Who is the target market?
The target market of a cat cafe business is people who love cats. Cat lovers may come for a variety of reasons:
- To spend time with cats if they themselves don’t have one
- To hang out with friends in a fun environment
- To support a shelter they believe in
How does a cat cafe make money?
Cat cafe businesses make money two ways. They charge customers by the hour for the time that customers spend with cats, and they charge customers for the food and beverages they order.
How much can you charge customers?
How much a cat cafe business can charge customers varies a lot depending on where the cat cafe is located. For instance, Crumbs & Whiskers in Washington, D.C. charges between $18 and $22 for a 70-minute visit. Meanwhile, Cat Cafe Madison in Madison, Wisconsin charges $7 per 60-minute visit, which includes $1 for a beverage.
Customers who adopt cats typically pay an adoption fee, but businesses don’t usually make money off of this fee. Instead, it simply helps cover necessary veterinary care, food, litter and similar expenses.
How much profit can a cat cafe make?
When located in a popular area, a cat cafe business can bring in a significant revenue. Even at $7 per person, just 10 visitors can generate $70 in an hour. At $20 per hour, the revenue increases to $200 per hour with 10 visitors. Moreover, a cafe can often hold more than 10 visitors.
How can you make your business more profitable?
Once established, a cat cafe business can increase its revenue by hosting events. Events often draw lots of people in, and a business can charge more for each person because there's a special event taking place.
What will you name your business?
Choosing the right name is very important. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your cat cafe is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
For most small businesses forming an LLC is a great option, but if you still want to weigh all your options check our our article, What Structure Should I Choose for My Business?
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
Federal Business Licensing Requirements
There are federal regulations regarding what can and cannot be added to, sold as, and processed with food. Attached is a resource from the Food and Drug Administration detailing the process of starting a food business: How to Start a Food Business
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a cat cafe. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Certificate of Occupancy
A cat cafe is generally run out of a storefront. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a cat cafe.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or build a location:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your cat cafe will be in compliance and able to obtain a CO.
When selling food, you will need licensing from a local health department; all establishments serving food are required to pass a health inspection. Tips for faring well on a health inspections
STEP 7: Get Business Insurance
Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a cat cafe
One of the best ways to promote a new cat cafe business is by hosting events. Cat cafes may host lectures on cat-related topics, cat-oriented meetups, movie nights with cats or yoga with cats. Hosting events gives people a specific reason to come. Once they experience your cat cafe, they’ll likely talk to family and friends about the event.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
A cat cafe business can keep customers returning by offering discounted rates to people who come frequently. Memberships that include unlimited visits is a popular way to drive regular traffic and revenue.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Cat Cafe In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
People who are outgoing and have a passion for cats may enjoy running a cat cafe business. Business owners regularly interact with customers, and most of their interactions will focus on a cafe’s cats. Additionally, business owners also spend a lot of time caring for the cats their cafe houses.
What happens during a typical day at a cat cafe?
A typical day at a cat cafe involves:
- taking care of cats (i.e. giving them food and water, changing their litter boxes, etc.)
- getting cats any veterinary care they might need
- processing adoption applications submitted by customers
- welcoming customers
- serving customers food and beverages
- overseeing the customer area to ensure all cats and people are behaving appropriately
What are some skills and experiences that will help you build a successful cat cafe?
There are two primary aspects to a cat cafe business. It’s part cafe and part animal shelter, and business owners must be able to run both types of businesses. Business owners who don’t have previous experience running either type of business have several resources they might learn from.
First, business owners can take an online course. There are several courses that cover either cafes or animal shelters:
- IAP Career College has an online Coffee House Owner Certificate Course
- The Specialty Coffee Association has a Barista Pathway training program
- Texas Coffee School has a Coffee Shop Management Training Course
- University of the Pacific has an Animal Shelter Management Certificate
- The ASPCA has several training programs in a variety of formats
- Karen Pryor Academy has an online Shelter Training and Enrichment Course
Second, there are many books on running a cafe or animal shelter that business owners can read. Some popular titles include:
Finally, business owners can work in a cafe or animal shelter for several months before starting up their business. This work will provide a firsthand view of what’s involved with running these types of businesses.
What is the growth potential for a cat cafe?
Because this is a relatively new business in the USA, most cat cafe businesses have only one location. However, some have expanded to several locations. Purr Cat Cafe in Brighton, Massachusetts and Cat Cafe Madison in Madison, Wisconsin are examples of cat cafes that have a single location. Catmosphere Cafe, Crumbs and Whiskers and Kitty Cafe all have two locations.
TRUiC's YouTube Channel
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One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
What are some insider tips for jump starting a cat cafe?
Kate, who owns Kitty Cafe, recommends starting with the building design when planning a cat cafe business. A building should have several separate areas:
- an area for customers to relax and play with cats
- a separate area for cats who need a break from people
- a third area for preparing food (if food is prepared on-site)
The non-food areas should be built with cats in minds, offering them plenty of places to run, play and hide.
How and when to build a team
Running a cafe and an animal shelter is a lot of work, so most cat cafe business owners hire a small team of employees as soon as they open. As a business grows, more and more employees can be brought on.