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Many people take excellent care of their pets, which includes feeding them great foods. Pet food businesses create high-quality pet foods for people’s pets. Most businesses offer a variety of recipes, so pet owners can find one that’s perfect for their pets. According to IBISWorld, the pet food industry brings in $27 billion annually and is growing.
Who is this business right for?
Anyone who is passionate about animals and enjoys coming up with recipes may like running a pet food business. Having a passion for animals helps business owners connect with potential customers, and a love for experimenting with recipes will help a business owner come up with unique foods to sell.
What happens during a typical day at a pet food business?
A pet food business owner’s daily activities include:
- blending ingredients to create pet foods
- cleaning the facility where they create pet foods
- delivering, shipping or selling pet foods to customers
- paying bills and seeing to other administrative duties as needed
When not doing one of these tasks, business owners may spend time coming up with new recipes or marketing their business.
What is the target market?
A pet food business’ ideal customer is a pet owner whose is concerned about what their pet eats and has discretionary income. Such a pet owner will be willing and able to pay for a high-end pet food.
How does a pet food business make money?
A pet food business makes money by selling pet food. While businesses may make food for almost any pet, most specialize in foods for dogs or cats because they’re the most popular pets.
What is the growth potential for a pet food business?
A pet food business may be a small, local business or sell pet foods throughout the country. For example, RAW by Canines First is a local pet store in Dallas, Texas that has its own line of dog food. POSH Dog Barkery is another pet food company in Dallas, but they sell through retailers in several states. On a national level, Nature’s Recipe reaches pet owners throughout the United States by selling its foods in Petsmart’s stores.
What are some skills and experiences that will help you build a successful pet food business?
As the Association of American Food Control Officials makes clear, pet food can’t be made from “just any” ingredients. Business owners must know what ingredients are safe for which animals (and which ingredients aren’t safe). Additionally, they should be able to develop a nutritionally balanced pet food.
There are several online courses that business owners can take to learn how to build healthy pet food recipes. PetFoodIndustry.com, Dogs Naturally Magazine and Holly and Hugo all offer programs. (Dogs Naturally Magazine provides a certification.)
After taking an online class, business owners may want to purchase a few books about animal nutrition. These serve as handy reference guides, and there are several books for different types of animals. A few popular titles include Raw and Natural Nutrition for Dogs, Canine and Feline Nutrition, and Feline Nutrition.
What are the costs involved in opening a pet food business?
A pet food business can be started with fairly little upfront capital. In many states, business owners can be approved to assemble pet foods in their kitchens. This eliminates any need for a processing facility, and businesses can start by renting a booth at a farmers market or selling through established retailers so that they don’t have to purchase a storefront.
Other than any licensing fees, the main expense that’s left is the raw materials needed to assemble and package pet food. To save money on these supplies, business owners can purchase what they need from wholesalers. Finding a wholesaler with a low minimum order will help business owners keep their initial investment as low as possible, until the profits from sales can be used to place larger orders for supplies.
What are the steps to start a pet food business?
Once you're ready to start your pet food business, follow these steps to ensure that your business is legally compliant and avoid wasting time and money as your business grows:
- Plan your business. A clear plan is essential for success as an entrepreneur. A few important topics to consider are your initial costs, your target market, and how long it will take you to break even.
- Form a legal entity. Establishing a legal business entity prevents you from being personally liable if your pet food business is sued.
- Register for taxes. You will need to register for a variety of state and federal taxes before you can open for business.
- Open a business bank account. A dedicated checking account for your pet food business keeps your finances organized and makes your business appear more professional to your customers.
- 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.
- 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.
- 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.
- 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.
- Establish a 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. Save 15% when you create a business website with Weebly.
Select your state below for an in-depth guide on completing each of these steps in your home state.
Where can I 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.
What are some insider tips for jump starting a pet food business?
Many pet owners who are willing to pay a premium for gourmet pet food may be particular about the ingredients in their pet’s food. In order to cater to these customers, business owners should have several different pet food recipes available when their business launches.
How to promote & market a pet food business
Pet food businesses may be marketed both locally and online. Business owners may be able to reach local customers by partnering with independent pet stores, pet sitters, dog walkers and groomers in their area. These professionals already have relationships with pet owners who trust them, and they may be willing to recommend a pet food that’s healthy and gives them a commission.
Online, businesses may sell through their own site or via a retailer like Amazon. When selling through a large retailer, owners should carefully calculate their prices so that all additional fees are covered.
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How to keep customers coming back
Pet food businesses can set themselves apart from other businesses in the industry by offering truly unique pet food. Businesses can do this by creating one-of-a-kind recipes or by packaging their pet food in an unusual way. Duke’s Dog Dogz, for example, make a vegan “hot dog” for canines.
How and when to build a team
Most pet food business owners start out assembling and selling their pet foods themselves. As a business grows and has the revenue necessary to support employees, business owners can add staff.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a pet food business. 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 more 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.
Maintain Personal Asset Protection
Don’t think that just forming an LLC, or any other type of business, will save your personal assets in case of a lawsuit or other matter by itself.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your LLC is sued. In business law, this is referred to as piercing your corporate veil.
Two of the simplest steps that will protect your business, and yourself, are to:
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.
Pet Food Regulations
The FDA has special requirements for pet food; click here to view them.
How much can you charge customers?
While cheaply made pet foods can cost just a few dollars per pound, high-end, local pet food companies frequently charge much more. Chef K9 charges between $7.25 and $10.25 per pound, and many other companies are in this price range.
What are the ongoing expenses for a pet food business?
The ongoing expenses for a pet food business include the cost of purchasing additional ingredients, and shipping or delivery fees. The cost of ingredients becomes small once a business can afford to place large wholesale orders, and shipping or delivery fees are usually built into what customers are charged.
How much profit can a pet food business make?
Pet food businesses can be extremely profitable. Businesses that provide organic and gourmet pet foods can see profit margins as high as 40 percent. While the exact profit a business makes depends on how large it grows to be, a successful pet food business could break a six-figure annual profit with margins like these.
How can you make your business more profitable?
Pet food businesses can increase their revenue by making gourmet pet treats in addition to everyday pet foods. Treats are inexpensive to make, and they’re an easy item promote as an add-on purchase.