Should I Start an LLC for My Mobile Dog Grooming Business?

Starting a limited liability company (LLC) for your mobile dog grooming business can provide several benefits.

Most importantly, an LLC structure offers limited liability to its owners, which can protect their personal assets from lawsuits and creditors.

For a mobile dog grooming business, lawsuits can arise from things like collisions between your business’s vehicle and other road users or injury to any of your clients’ dogs during the grooming process.

LLCs are also affordable, highly flexible (from a tax point-of-view), and can make your mobile dog grooming business seem more credible.

Recommended: Use Northwest to form an LLC for $29 (plus state fees).

Do I Need an LLC for a Mobile Dog Grooming Business?

LLCs are a simple and inexpensive way to protect your personal assets and save money on taxes.

You should start an LLC when there's any risk involved in your business and/or when your business could benefit from tax options and increased credibility.

LLC Benefits for a Mobile Dog Grooming Business

By starting an LLC for your mobile dog grooming business, you can:

Protect your savings, car, and house with limited liability protection
Have more tax benefits and options
Increase your business’s credibility

Limited Liability Protection

LLCs provide limited liability protection. This means your personal assets (e.g., car, house, bank account) are protected in the event your business is sued or if it defaults on a debt.

Mobile dog grooming businesses will benefit from liability protection because industries that work directly with animals, including mobile dog grooming businesses, take on certain levels of risk associated with the safety of the animals while in their care, as well as the humans involved in the oversight of the grooming and care process.

Example 1: Your mobile dog grooming business owes a number of suppliers, who threaten to sue. If they do and their legal actions succeed, the debts would have to be satisfied from business assets. Your personal assets are protected from any suit they may bring.

Example 2: The landlord of your mobile dog grooming business takes you to court to indemnify him for redesign costs you requested. But he never indicated he would charge when he agreed to your request. If, however, he wins his suit, he can only be compensated from business assets. Your personal assets are safe.

Example 3: Your mobile dog grooming business becomes cash-flow insolvent and there is imminent threat that creditors will take legal action. If they do and their suits are successful, claims can only be satisfied from business assets. Your personal assets would be protected.

An LLC will also protect your personal assets in the event of commercial bankruptcy or loan default.

To maintain your LLC's limited liability protection, you must maintain your LLC's corporate veil.

LLC Tax Benefits and Options for a Mobile Dog Grooming Business

LLCs, by default, are taxed as a pass-through entity, just like a sole proprietorship or partnership. This means that the business's net income passes through to the owner's individual tax return.

The business’s net income is then subject to income taxes (based on the owner's tax bracket) and self-employment taxes.

Sole proprietorships and partnerships are taxed in a similar way to LLCs, but they do not offer limited liability protection or other tax options.

S Corp Option for LLCs

An S corporation (S corp) is an IRS tax status that an LLC can elect. S corp status allows business owners to be treated as employees of the business (for tax purposes).

S corp tax status can reduce self-employment taxes and will allow business owners to contribute pre-tax dollars to 401k or health insurance premiums.

The S corp status requires that the business pay the employee-owner(s) a reasonable salary for the work they perform.

In addition, the business might need to spend more on accounting, bookkeeping, and payroll services. To offset these costs, you'd need to be saving about $2,000 a year on taxes.

We estimate that if a mobile dog grooming business owner can pay themselves a reasonable salary and at least $10,000 in distributions each year, they could benefit from S corp status.

You can start an S corp when you form your LLC. Our How to Start an S Corp guide will lead you through the process.

Credibility and Consumer Trust

Mobile dog grooming businesses rely on consumer trust. Credibility plays a key role in creating and maintaining any business.

Businesses gain consumer trust simply by forming an LLC.

A growing business can also benefit from the credibility of an LLC when applying for small business loans, grants, and credit.

Northwest will start an LLC for you for just $29 (plus state fees).

Get Started

How to Form an LLC

Forming an LLC is easy. There are two options for forming your LLC:

You can hire a professional LLC formation service to set up your LLC for a small fee
Or, you can choose your state from the list below to start an LLC yourself

Select Your State

For most new business owners, the best state to form an LLC in is the state where you live and where you plan to conduct your business.

Do LLCs Need Insurance?

All businesses need insurance to protect their business assets — even LLCs. This is because the limited liability protection from an LLC protects your personal assets, not your business assets.

A mobile dog grooming business business should have general liability insurance which will cover risks that result in personal injury or property damage. It will also cover legal fees and court judgments.

Common Situations Business Insurance May Cover for a Mobile Dog Grooming business

Example 1: An expensive dog is frightened by a loud noise from some of your grooming equipment. It escapes your grasp and runs into the street where it is fatally hit by a vehicle driving by. If held liable, your business would probably have some coverage under a general liability insurance policy for damages incurred or a settlement reached outside of court.

Example 2: A customer’s toddler is playing while you perform your grooming services on the family dog. During the last few minutes of a shampoo session, you quickly run out to your car for an extension cord for your blow dryer. The dog lashes out and bites the child, who is rushed to the hospital. If liable, your business would probably be covered for some of the resulting damages.

Example 3: While talking with a customer, his priceless show dog, a special purebred, gets into your purse and consumes a large portion of dark chocolate that you left inside. The dog is fatally poisoned. If you were found liable, general liability insurance would probably help cover some of the damages or any settlement reached between your business and the customer.

Other Types of Coverage Mobile Dog Grooming Businesses Need

While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some other types of insurance all mobile dog grooming should obtain.

Commercial Auto Insurance

Since you will be driving your business truck on public roadways, you are mandated by the state to carry a commercial auto policy. Auto insurance protects not only your vehicle but any liability you may have in an accident. Your personal car insurance will not cover you if you are driving the business truck, even if you are off duty.

Commercial Property Insurance

If you own your location instead of renting, you need commercial property insurance to protect the building. If your business is based out of your home, your homeowners' insurance will not cover the home when it is being used for commercial purposes. Property insurance also covers items owned by your business.

Mobile dog grooming businesses invest heavily in the tools that are used to complete their work. Be sure that you have enough coverage to replace all of your tools in the case of a loss. This coverage is generally offered in a Business Owner Policy (BOP).

In addition to the policies outlined above, there are a few other types of coverage your mobile dog grooming business may require depending on certain aspects of your operations. Some of these might not apply to you, so be sure to ask your agent which policies are right for your business.

Workers' Compensation Insurance

If your mobile dog grooming business has any employees (full-time or part-time), you are legally required to carry workers’ compensation insurance. This type of coverage will help compensate your employees in the case that they get injured on the job.

Read more about workers’ compensation insurance.

Business Interruption Insurance

In the event of a fire, flood, or other catastrophes, there is a good chance your business operations will be halted for some time. Business interruption coverage is designed to help you recoup a portion of the revenue your business would lose due to the inability to operate.

This type of insurance is typically included in a business owner’s policy.

Commercial Umbrella Insurance

Umbrella coverage allows you to extend above and beyond the standard limits of your other business insurance policies. If you are faced with a large lawsuit or other claim situation, there’s a possibility that the coverage limits of your standard policies will be insufficient. In this case, your umbrella policy will allow you to surpass these limits.

Should I Start an LLC FAQ

Choosing the right business structure depends on your business’s unique circumstances and needs. However, unless your business is very low risk (like a hobby), an LLC is likely the better option.

Visit our LLC vs. Sole Proprietorship guide to learn more.

At a minimum, you’ll need general liability insurance and commercial auto insurance.

Read our Business Insurance for Mobile Dog Groomers article for more info.

Starting a mobile dog grooming business can cost quite a lot. Prices of customized vehicles range from $10,000 to ten times that amount. Ongoing costs would include vehicle maintenance, gas, wages, marketing material, and commercial insurance.

Visit our How to Start a Mobile Dog Grooming Business guide to learn more about the costs of starting and maintaining this business.

Since you aren’t operating out of a fixed location, ongoing expenses are minimal and might include vehicle and equipment maintenance, fuel costs, supply replenishment, marketing, and payroll to staff members.

Learn more about running a mobile dog grooming business.

Money is collected from clients for each dog that is serviced by your business, charging various rates for different types of grooming services offered.

Learn more about starting a mobile dog grooming business.

Mobile dog grooming services have provided a wonderful opportunity for dog owners to tend to their pet’s grooming needs while still operating on a tight time schedule.

Busy dog grooming services have the potential to profit several hundred dollars in a single day.

Learn more about starting a mobile dog grooming business.