Should I Start an LLC for My Pet Grooming Business?

Starting a limited liability company (LLC) for your pet 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 pet grooming business, lawsuits can arise from things like accidentally injuring a customer’s dog while attempting to groom it or failing to groom a customer’s pet by the agreed-upon date.

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

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

Do I Need an LLC for a Pet 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 Pet Grooming Business

By starting an LLC for your pet 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.

Pet grooming businesses will benefit from liability protection because of the risk of product liability, trademark infringement, and workplace accidents.

Example 1: You are responsible for managing a team of pet groomers and overseeing various operations within your grooming business. In the event that one of your employees is involved in an accident, liability protection will limit any financial damages to only your business assets, protecting your personal savings from any losses.

Example 2: Due to a leaking water pipe, several areas of your pet grooming business are flooded, causing damage to your equipment as well as the pets being groomed at the time. With liability protection in place, you can quickly address the issue without having to worry about using your personal assets to pay for the damages.

Example 3: You have an employee who accidentally damages a customer’s pet while washing and trimming its fur. The customer files a lawsuit against your business, claiming that the damage was due to negligence on behalf of your company. With liability protection in place, your personal assets will be protected from any legal action taken by this client.

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 Pet 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 pet 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

Pet 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.

Pet grooming businesses need insurance to protect themselves from potential risks associated with their work. This includes, but is not limited to, liability in case an animal is injured while being groomed, property damage caused by pets, and accidents that may result in a claim.

Common Situations Business Insurance May Cover for a Pet Grooming Business

Example 1: During a shampoo session, a dog in your storefront becomes scared and attacks a customer who is paying by the front desk. In the event of significant injury to the customer, general liability insurance would probably help to cover damages owed by your business or any settlement reached.

Example 2: A distracted employee tries to help multiple customers at once. She neglects one of the dogs in her care, and the dog wanders into the back of the store, where it consumes chemical cleaner for the floor. The dog is badly poisoned by the cleaning agent. In the event your grooming business is found liable for this accident, general liability insurance would likely help to cover anything you owed.

Example 3: An expensive cat is frightened during its bathing process and escapes your building. It is hit by a car and badly injured. If liable, your business would probably be covered by general liability insurance for settlements reached or damages owed.

Other Types of Coverage Pet 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 pet groomers should obtain:

Professional Liability Insurance

This policy is helpful for any business in the habit of performing tricky services that could result in significant mistakes or severe client dissatisfaction. A pet-grooming business might find itself in a situation where, for example, its failure to completely rid an animal of lice or fleas causes the pet’s home to become infested. Professional liability insurance keeps businesses covered for any damages or costs incurred through negligence or omissions while undertaking their promised services.

Commercial Property Insurance

A pet grooming business owns plenty of cleaning equipment, products, and other commercial supplies that need to be kept safe and maintained. If these items are destroyed, not to mention the premises on which your business operates, it can mean serious financial trouble. Commercial property insurance helps to cover your business property, including equipment, inventory, and owned real estate. Keep your business safe from fires, violent weather, and similar threats with a property policy.

Home-Based Business Insurance

If you run your pet-grooming business from home, a home-based business insurance policy will be an important addition to your other coverage. Home insurance often doesn't cover business-related issues that occur in the home. With this policy, you're helping to cover accidents that take place in your home during business hours and ones related directly to your business. This can be acquired as part of a business owner’s policy or as a rider extension to the existing homeowner's policy.

Product Liability Insurance

If your pet-grooming business provides products for sale in addition to its performed services, you may want to look into a product liability policy. This policy will cover damages and injuries caused by products that your business sells. For your grooming business, this may include shampoos, brushes, and other pet supplies. Keep your business covered in the event of product misuse, abuse, and other negative unintended consequences with a product liability insurance policy.

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.

Read our Pet Grooming Business Insurance article for more info.

Opening a pet grooming business can be done with minimal startup costs, particularly if you're operating from home or on a mobile basis. Essential tools and supplies such as clippers, shears, slicker brushes, blades, smock, greyhound comb, shampoo, and conditioner should be expected to cost at least $2,000. Advertising is also necessary to ensure the success of the business.

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

Some potential operating expenses for a pet grooming business include rent, payroll, insurance, and grooming supplies.

Learn more about running a pet grooming business.

Pet grooming businesses make money by charging pet owners for haircuts, baths, and other pet grooming services.

Learn more about starting a pet grooming business.

The pet care industry brings in billions of dollars each year. A sizable chunk of this is spent on pet grooming services.

A pet grooming business can be relatively inexpensive to start if it is a mobile operation rather than a standalone location. Offering specialized or luxury pet grooming services can also help improve profit margins.

Successful pet grooming businesses can eventually bring in more than $75,000 each year.

Learn more about starting a pet grooming business.