How Much Does it Cost to Open a Pet Store?

by Bibiana da Silva - Updated September 26, 2017

People are always willing to treat their pets, as evidenced by the fact that Americans spend $36 billion a year on their animals, according to "Entrepreneur" magazine. While this is an impressive figure, it helps put things in perspective to realize that a pet store can cost well over $100,000 to start while the average pet store owner makes barely $17,000 a year after taxes as of 2011, according to the Simply Hired job board. Assess the costs to determine whether you can afford to start your own pet store.

Business Structure

Though leashes, toys and food bowls may seem like fairly benign items, you should protect yourself against any potential liability should anyone's pet get hurt using your products. For this reason, you should avoid structuring your business as a sole proprietorship or a partnership. These are the easiest and least expensive businesses to start, requiring little more than a $10 to $100 assumed name form to be able to do business with a name other than the owners'. Yet they don't protect you from personal liability because they aren't legally separate entities from their owners. A limited liability company costs between $50 and $800 to start and gives you personal liability protection. You can form a corporation for $100 to $200 and also receive this protection, but be prepared to keep more intensive records of your business activities. Talk with a business lawyer or accountant to determine which of these structures makes the most sense for you. File your assumed name form with the county clerk and your articles of incorporation or organization with the secretary of state.

Licenses

Since a pet store usually sells pet food, bath and health products, you likely need a special license from the agency in your state that handles animal safety. Aside from this, you may need a license just to operate a business in your area, though not every jurisdiction requires this; contact the city hall, county clerk and secretary of state to be sure. In states that charge sales taxes, you need a sales license, and you need a resale license to buy pet products wholesale. Some states charge for these licenses, while others don't.

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Location

The ideal location for your pet store depends on what type of customer you want to attract. If you sell custom dog leashes encrusted with real diamonds, for example, it makes sense to choose a location near a dog park in an affluent neighborhood. If you sell organic, locally-produced dog food, putting your store in a neighborhood where there are also health food stores may be a wise choice. The location you choose affects how much you pay. But expect to pay several hundred dollars a month at minimum. Working from home significantly lowers these costs, and marketing and selling online will give you a wider reach than even a brick-and-mortar store might have. Set aside a room in your home specifically for your pet store business and an accountant can help you deduct rent for the business area on your taxes.

Products and Services

The types of products you sell also affect your startup and operating costs. Pet items that are easier to find and cheaper to produce cost less for you to stock, just as specially-made or designer items typically cost more. You might decrease these costs by making your own products, though the initial costs for equipment may be higher than if you bought from a manufacturer or wholesaler. For your initial inventory, you can expect to pay between $15,000 and $30,000, "Entrepreneur" reports.

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