Start a pet bakery 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 pet bakery. 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 pet bakery?
The startup costs for a pet bakery business can range from $1,000 to $100,000, depending on the bakery’s business model. Upfront costs that all pet bakeries have include insurance premiums, licensing fees, initial ingredient costs and packaging costs. Licensing fees vary, but they usually cost a few hundred dollars, at most. Pet bakeries that cost tens of thousands of dollars to open are usually franchise operations, and they often have a brick-and-mortar location.
Pet bakery owners who want to keep their startup expenses minimal can sell through a website and established retailers, rather than through their own physical store. They also can purchase small amounts of ingredients and packaging materials to start with, increasing their order amounts as their business grows and generates revenue. Finally, many states let pet bakery owners use their own kitchens as a processing facility, as long as it’s licensed. This eliminates any rent costs.
What are the ongoing expenses for a pet bakery?
The primary ongoing expenses for a pet bakery business are annual license fees, the costs for ingredients and packaging materials, and any employees’ salaries.
Who is the target market?
An ideal customer is someone who is concerned about the health of their pet and has discretionary income to spend on gourmet pet food. There is usually a higher demand for specialty pet food in cities, where more pet owners have discretionary income to spend on specialty pet food. (Pet bakeries in less populated areas often face less competition, though.)
How does a pet bakery make money?
Pet bakery businesses make money by selling the pet foods they create. These foods may be sold directly to customers (retail) or through intermediary retailers (wholesale). Wholesale prices are lower than retail prices.
How much can you charge customers?
In 2014, the average price for private label pet food $1.22 per pound, and the average price for branded pet food was $2.22 per pound. Thus, a 25-pound bag of private label pet food would cost $30.50, and a branded bag would run about $55.50.
The average price of a branded bag shows that consumers are willing to pay $55 for a 25-pound of pet food. Although the average price for private label pet food is less, a specialty pet bakery business that is able to gain customers’ confidence may be able to charge branded rates for their specialty foods.
How much profit can a pet bakery make?
How much a pet bakery business profits depends on how many outlets it's selling in. The more places a pet bakery’s goods are sold in, the more customers will see and, potentially, purchase the bakery’s pet foods.
Two pet bakeries show the potential revenue that such a business can generate. Dogswell was founded in 2003 with one pet food specifically designed to help dogs who suffered from hip dysplasia and arthritis. The company earned $35,000 in revenue in its first month and $500,000 in its first year. It’s now in several national chains and had an annual revenue of $17 million in 2008. Three Dog Bakery started in 1989, so it’s a well-established company. It has dog foods in national chains and averages between $10 and $15 million in annual sales. Local pet bakeries, it should be noted, won’t see these types of sales unless they get their products into national chains.
How can you make your business more profitable?
A pet bakery business can increase its profits by finding additional retailers, offering new lines of pet foods and creating pet treats.
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 Pet Bakery 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 pet bakery 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
Manufactured pet food is regulated by the FDA. Check this guide for an overview of their regulations.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a pet bakery business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Finally, local licensing or regulatory requirements apply. For more information:
- 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
Operating a pet bakery typically requires 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 pet bakery.
- 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 business will be in compliance and able to obtain a CO.
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 pet bakery
The most effective way to market pet bakery businesses that primarily sell through established retailers is by building relationships with more retailers. Pet bakeries that focus on online sales can market themselves through online communities, such as Facebook, Reddit, forums and blogs.
How to keep customers coming back
A pet bakery business can set itself apart from similar businesses by building trust with customers. Signing on a board-certified veterinarian is one way to build trust. Another is to hold demos at retailer’s stores, which provide opportunities to educate customers.
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 Pet Bakery 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?
Anyone who is passionate about pets and nutrition may be interested in opening a pet bakery business. Pet bakeries usually start out selling through other retailers or online, rather than their own brick-and-mortar store. Because business owners don’t need to keep specific retail hours for customers, it’s possible to start this business up while maintaining another job.
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 pet bakery?
A pet bakery business owner spends much of their time creating and packaging pet foods, and marketing the foods their bakery sells. Marketing may involve running a site online, building relationships with retailers or both.
What are some skills and experiences that will help you build a successful pet bakery?
Specialty pet food must be carefully formulated, and each ingredient must be individually considered. Additionally, each line of food needs to take into account the unique needs of the species that it’s designed for. (For example, chocolate is poisonous to dogs.)
Pet bakery business owners, therefore, should be experts in pet nutrition. The Academy of Natural Health Sciences offers certificates in pet, canine, feline and equine nutrition, and Dogs Naturally Magazine University offers a pet food nutritionist certification. These certificates can help pet bakery owners learn about pet nutrition and other aspects of running a pet bakery (e.g. FDA regulations), but a certificate isn’t required. Owners can also learn what they need to know from books on animal nutrition and websites like the Pet Nutrition Alliance’s site. Books from other pet bakeries (e.g. Short Tails and Treats from Three Dog Bakery) can also provide insights and inspiration.
Pet bakery owners who want even more expertise may want to bring a board-certified veterinarian on as a nutrition consultant. Veterinarians, as an opinion piece on PetMD points out, have more training than certified pet nutritionists. Having a veterinarian help create pet foods will ensure they're nutritional, and it can help instill consumer confidence in the pet bakery’s brand.
What is the growth potential for a pet bakery?
Many pet bakery businesses start out small, selling their specialty pet foods in local retail stores or through a single website. As they grow, pet bakeries can sell their pet foods in more and more retail locations, including national chains like Petco and Petsmart.
Not sure if a pet bakery 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.
How and when to build a team
Pet bakery businesses that want to market their foods as being formulated by a veterinarian will need to have a consulting veterinarian from the outset. (Bringing on a veterinarian isn’t required.)
Most pet bakeries’ first true employee is a part-time delivery driver. Hiring a delivery driver lets the owner spend more time marketing the business and creating new lines of pet foods, both of which grow the business. Eventually, a pet bakery may have a small team that includes a delivery person, a salesperson, an operations manager, and one or two other employees.