Start a cat cafe by following these 10 steps:
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 guide to starting your cat cafe. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
Check out our How to Start a Business page.
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 much can you charge customers?
- 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
- Getting a Point-of-Sale system for selling your cafe products
- 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. A smart POS system can produce weekly reports for a cafe that can be used for fine-tuning the prices.
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 important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Cat Cafe Name Generator
When registering a business name, we recommend researching your business name by checking:
- Your state's business records
- Federal and state trademark records
- Social media platforms
- Web domain availability.
It's very important to secure your domain name before someone else does.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your cat cafe is sued.
Form Your LLC
Read our Guide to Form Your Own LLC
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
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?.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
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.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
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.
Recommended: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.
Open net-30 accounts
When it comes to establishing your business credit, net-30 vendors are considered the way to go. The term "net-30," which is popular among vendors, refers to a business credit arrangement where the company pays the vendor within 30 days of receiving goods or services.
Net-30 credit terms are often used for businesses that need to obtain inventory quickly but do not have the cash on hand.
Besides establishing business relationships with vendors, net-30 credit accounts get reported to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recommended: Read our guide on the best net-30 vendors so you can start building business credit now, so you never have to worry about cash flow in the future. Keep in mind that poor cash flow is the #1 reason businesses fail!
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
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
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.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
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.
Alternatively, you can add social media links to your customized receipts using smart POS system.
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. A cat cafe can also use a loyalty program through their POS system to encourage repeated visits.
Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use.
Recommended: Find the best phone system for your business; check out our review of the Best Business Phone Systems 2021.
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.
Is this Business Right For You?
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.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
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. The Catfé Lounge in Ferndale, Michigan, 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.
Not sure if a cat cafe is right for you? Try our free Business Idea Generator and find your perfect idea.
TRUiC's YouTube Channel
For fun informative videos about starting a business visit the TRUiC YouTube Channel or subscribe below to view later.
Take the Next Step
Find a business mentor
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.
Learn from other business owners
Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
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.