Start a pet hotel business by following these 9 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 hotel business. 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 pet hotel business?
There are a number of factors that stand to impact your facility’s start-up costs, including location, local laws and regulations, and the size of the business. With these factors in mind, it is recommended that your budget be a minimum of $25,000, with costs running as high as $85,000.
Your initial investment will include the following:
- Land/Location lease: Average cost is $4,000 per month, with many building owners requiring a minimum of two months down payment.
- Facility build out: Total cost is dependent upon the size of your leased building and features it comes equipped with. Average cost is $45,000.
- Insurance: Ranges from $700 to $1,200.
- Equipment: Ranges from $1,500 to $15,000, depending upon facility size and services/accommodations your pet hotel will offer.
- Standard start-up business expenses, permits, and deposits: Ranges from $1,500 to $7,000.
- Website design: Some business owners choose to build their own, free website. More in-depth sites can cost upwards of $4,000.
Experienced pet hotel owners recommend a cash reserve of $15,000 to $25,000. Paws Dog Daycare’s financial spreadsheet can help you determine a budget specifically geared toward your needs.
What are the ongoing expenses for a pet hotel business?
Your ongoing expenses will include rent, standard facility costs, insurance, website maintenance, and marketing. Industry experts indicate a minimum of $10,000 per month, with payroll costs taking up the largest portion of the budget. Facility size, number of employees, and location will all impact your overall budget.
Who is the target market?
Your target market will consist of pet owners in your geographical area that travel and can afford your hotel’s fees. When considering your location, conduct thorough research to determine which areas aren’t saturated and what services you can offer to meet community needs.
How does a pet hotel business make money?
Pet hotels charge clients a fee for each night their animals are boarded. While many hotels limit boarding to cats and dogs, those with proper accommodations can offer their services for a variety of different animals.
How much can you charge customers?
Fees are typically charged on a per day basis, ranging from $18-$28 per animal, depending upon the size and type of animal. This sets your base pricing, which includes a specified amount of “playtime” and interaction. Additional services are offered for added fees.
How much profit can a pet hotel business make?
Profits vary depending upon a number of factors. Experienced professionals have found success opening franchise hotels, yielding them millions in annual profit. With the right location, entrepreneurs stand to realize $32,000 to $48,000 in profit their first year.
How can you make your business more profitable?
Those just starting out in the industry are urged to consider what pet community needs are not being met and offering services to meet those needs. Offering additional services such as treats, toys, grooming, and extra outside time are also an effective way to boost profits.
What will you name your business?
Choosing the right name is very important. Read our detailed guide on how to name your business. 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.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your pet hotel business is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
Form Your LLC
Read our Guide to Form Your Own LLC
Check out the Top Business Formation Services from our friends at StartupSavant.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
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.
Recommended: Find the right bank for you, read our review of the Top 5 Banks for Your Small Business
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.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a pet hotel 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 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 pet hotel business is generally run out of a plot of land. 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 pet hotel business.
- 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 pet hotel 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.
How to promote & market a pet hotel business
To ensure growth and success, it is recommended that you market on a regular basis. When first starting out, social media and flyers posted on online forums or public bulletin boards will help your business. Once you have built a reputation, ramp up your marketing by partnering with local veterinarians and pet stores. Use your interpersonal skills to get to know your customers on a deeper level. Find out what local events they attend, what websites they visit, and what programs they watch. This information will help you develop a concise and effective marketing strategy.
How to keep customers coming back
When it comes to this industry, your reputation is everything. Every animal should be treated with respect and love. When a dog gets excited to walk into your facility, your clients will take notice and pass along this message to every pet owner they know. Additionally, carefully consider your pricing and make sure your fees are fair and competitive with those around you.
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 Pet Hotel Business 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?
Pet hotels are designed for pampering and caring for customers’ pets while they are unable to do so. Therefore, successful pet hotel owners should be animal lovers or pet owners themselves. This helps owners identify with customers and interact effectively with pets. Pet hotel owners should also be experienced in running a small business, handling intricate schedules, and managing numerous customer accounts. Compassionate, business minded individuals will fare best.
What happens during a typical day at a pet hotel business?
While consumers will envision you romping around, playing with puppies all day, your days will often entail a great deal more work. Day-to-day activities include:
- Checking in/out customers
- Cleaning hotel rooms and play areas
- Feeding pets and dispensing medications
- Exercising animals
- Administrative tasks such as answering emails and phone calls, taking reservations, and paying monthly bills
- Marketing and advertising
Many pet hotels offer additional services, such as grooming. Prior to opening your hotel’s doors, determine which services you plan to offer and ensure the facility is properly equipped and staffed to fulfill these obligations.
What are some skills and experiences that will help you build a successful pet hotel business?
While certification or a degree is not required for this profession, there are a number of skills that can prove beneficial. Understanding the needs of the types of animals you’ll care for is important. Prior to opening your facility, consider working in an animal shelter, at a boarding facility, or in a veterinarian’s office. This hands-on experience will offer invaluable information regarding animal health and behavior, as well as the specifics regarding how to properly manage and maintain this type of facility.
For long-term success, it’s important that pet hotel entrepreneurs manage their business smartly. Strong business skills, patience, interpersonal skills, and a natural ability to delegate are critical to your business’ growth and reputation. If this is your first business venture, consider hiring a professional to guide you or taking a business course at your local college. Additionally, it is recommended that novice pet hotel owners become members of The International Boarding and Pet Services Association. Their education program and guidance regarding management and marketing of the facility will help set your hotel apart from others in the community.
What is the growth potential for a pet hotel business?
According to a recent IBISWorld report, the Pet Grooming and Boarding industry generates over $8 billion in revenue each year, with an average annual growth of 6.6%. With over 300 million pets in the United States, the pet hotel business is poised for continued growth and is minimally impacted by economic fluctuations.
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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.
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 pet hotel business?
When writing your business plan, consider the following advice from those who have found long-term success in the industry:
- In this industry, it is easy to get caught up in the humanitarian aspect. Remind yourself regularly that this is a business, not a hobby, and that your primary objective is to generate a profit. Be smart about each business decision and ask for professional guidance when needed.
- Time is money. Consider investing in time clock software to determine how much time each activity takes you and your staff. Seek room for improvement wherever possible.
- No matter how busy your business is, build a savings and continuously market. Be prepared for the unexpected.
- As a luxury pet boarder, it’s important that your passion for animals always shines through. Pet owners can be quite scrupulous.
How and when to build a team
Your staff is an integral part of ensuring that customers come back. When it is time to build a team, make sure each individual is friendly, knowledgeable, and passionate about animals. This will shine through, making each pet owner feel confident that their “children” will be treated with love and respect. Additionally, consider your strengths and weaknesses and hire accordingly.