All the information you need to Start A Dog Daycare

 Getting Started in Dog Daycare

Starting Out in Dog Daycare.

Opening a Dog Daycare can be an expensive undertaking and one that should not be taken lightly. The first order of business when you are deciding to open a Dog Daycare is to determine what the initial start up costs will be. Below you will find a realistic estimation of the start-up costs that can be expected when opening a Dog Daycare Facility and below that an explanation of each item. 

Insurance Coverage for Small Businesses

The purpose of insurance is to protect you from risk that you cannot afford through the payment of a premium that you can afford. When starting a Dog Daycare one professional you need will be a knowledgeable insurance agent. It may be helpful to have one agent that can handle all of your insurance needs.  However, in the Dog Daycare business this may be an unlikely scenario as liability coverage for the care of animals is generally covered by companies that specialize in providing insurance to the pet care industry.  On the Dog Daycare Insurance page of this site we have provided a list of the various carriers available. They provide policies that are specifically designed to cover small pet businesses that, in one package, will cover most of your insurance needs.

Insurance is not only important to you, but it will be a necessity for your other business relationships as well.  For example, if you choose to lease space for your new  Dog Daycare business, the landlord will typically require that you furnish a certificate of insurance or that the landlord be listed as an additional insured on your policy as assurance that your business will not disappear overnight in the event a loss occurs.

Commercial Leases

There are 3 main lease types that you will encounter when you are looking for space to begin your Dog Daycare. One of the more common types is a gross lease which would generally be the same type of lease you would find when renting a house.

Gross Lease: A lease in which the tenant pays a fixed rental amount for the duration of the lease and the landlord pays the expenses associated with owning the property such as taxes and insurance.

More commonly commercial property rentals will be one of the following:

Net Lease: A lease in which the tenant pays in addition to rent, the maintenance and operating
expenses such as real estate taxes, insurance premiums, etc.

Triple-net Lease: A lease in which the tenant pays, in addition to rent, all expenses related to the operation of the property. 

Facility Construction and Build-out

This is where you will incur the majority of your initial start up expense,. paying for engineering plans, contracted labor, material costs etc. Insure that you choose a contractor that understands exactly what you need to get accomplished. Ensure that you check with the Better Business Bureau, and ask for references before you sign a contract for the construction of your Dog Daycare facility. Cheaper is not always better, especially when choosing a contractor.  Costs will vary not only based upon the  design and size of your proposed Dog Daycare, but also as a result of the economy in your local area. Prices for items like material and labor costs tend to vary by region. At a minimum you should figure between $15,000 and $30,000 for build-out.

Basic Equipment to Operate a Dog Daycare

Luckily when opening a dog daycare the majority of your costs will be associated with the build out of the facility. You are not required to maintain a large inventory to operate this business successfully. The basic equipment that you will need is very similar to what would be required to open any small business retail store without the initial large cash outlay to build inventory.

Office Equipment

The first items that you need will be your office equipment: computer, fax machine, desks, chairs, filing cabinets, stationary, phones etc. Remember your office does not have to be extravagant or luxurious but it does have to be functional. You will not be spending too much time there in the beginning, except for morning check-ins and check-outs. The vast majority of your office equipment you should be able to get used from specialty stores that sell used office equipment. You should budget between $600-$1500 for these items.

Dog Daycare Software

This is one item where they get you and there is no real cheap software available that can adequately handle all of the various facets of operating a busy dog daycare. The cost for software to manage customer accounts, check in's and check outs will range from $400 upwards of $2000 depending upon what features and services that you plan on offering your clients. Do not expect to enter this business keeping everything on index cards and post it notes- it will not work. There is entirely too much going on during a day with dogs checking in and checking out, handling customers and money changing hands all of which create a chance for things to get lost and deteriorate your ability to keep cash control. Employees will find a way to steal or you will look very unprofessional as you search through a mound of paperwork frantically to call an owner whose dog has been injured. Avoid the hassle and purchase the right tool for the job. It is a valid expense and one that will pay you back many times over in the future. Below is a list of companies that provide software capable of handling a boarding or Dog Daycare facility. This is not a rating of the quality of the services they provide but merely a list of providers. 

Dog Specific Items

The other basic items that you will need would consist of leashes, muzzles (one of each size 2-8), and treats. You do not need a lot of canine specific gear as the majority of your dog daycare customers will bring their dog in with a leash and collar anyway. Spend $150 maximum on these items.

Cleaning Supplies

You will find this to be your most important equipment, if you plan on operating a dog daycare that is sanitary and presentable to customers. A good mop and bucket, rags, plastic grocery bags, Windex, broom, vacuum, bleach, and basically everything that you would expect a well equipped janitor to have, plus Poop Bags. You should expect to spend around $350 for these items.

Optional Equipment (Grooming)

One thing that you may find out the hard way if you are unprepared is that just because you build a Dog Daycare and open your Doors you are not going to be instantly flooded with Dog Daycare clients. Dog Grooming is a good service to offer, that will help greatly in providing much needed positive cash flow in the beginning. You will find a lot of groomers are be willing to work for you part time on a commission split basis if you run an ad in the paper. Generally the groomer takes 50% and the house takes 50%. You provide the facilities to include a tub, grooming table, dryers, shampoo, disposable items as well as a space to work comfortably in and they provide their own clippers, scissors, and tools. This is actually a good arrangement as you are able to generate additional revenue that you otherwise would have been unable to obtain. The best advice that I can give you when searching for items to make your facility groom capable is EBAY, EBAY, EBAY. There are a great number of grooming shops that open only to close six months later and the majority of their equipment can be purchased at a significant discount through EBAY. We equipped our first facility entirely through EBAY, to include cage dryers, table, tub, cages and everything else that was needed for around $2500.

One added caveat about hiring a Groomer, in the beginning while your company is still cash flow critical you will more than likely be forced to use the commission split basis for payment, as you need income in order to pay the groomer a commission. As your facility grows and you begin to obtain a regularly positive cash flow, do away with the commission and pay your groomers a set salary for their services.

Signage

Whether you decide to use simple banners or a costly exterior LED signage you are going to have to devise a way to make your location readily visible to potential Dog Daycare customers. To cost effectively initially get the word out banners are relatively cheap and can be found at halfpricebanners.com. Another option is to hire an artist to paint your logo and or a mural with your business name and the services that you provide on the outside of the building. You should at a minimum budget $400 for signage.

Advertising

One constant you will find is that without advertising nothing happens. There are a number of ways to get free advertising if you talk to the right people. Network with local animal adoption groups and hold some functions at your facility as they always get free press and it promotes a positive image for your business. Talk to radio advertising executives and look for new business programs that they offer. The most effective advertising dollar spent for gaining customers is in the newspaper. It’s more cost effective than other advertising media and remains available to your customer long after they initially view it. Insure that you provide a prominent link to your web site in all of your advertising materials. The problem with radio is that if they miss your phone number they are probably not going to stayed glued to the station in the hopes of catching it later. In every community there are a number of specialty or community magazines that are locally circulated many of which will do a story on your facility for free to make their magazine more interesting to their readers and more appealing to those that advertise in it. Luckily for us everyone loves pets, and pet stories are always popular. The cost for advertising can range from $0 with proper networking, into the thousands of dollars for paid radio, and television advertisements.

Permitting Fees and Licenses

Unfortunately your local government is going to get a piece of the action and unlike the mob it’s legal. You can expect to pay permitting fees for your initial build-out as well as more fees for inspectors to come out and check the quality of the work that was performed, as well as fees for fees, and county tax on fees etc. (Get the Picture) Licenses will generally be specific to your location, and may be as simple as a $30.00 business license to open your Daycare or can be much more complex as some locales have health department approval licenses as well as pesticide licenses if you plan on doing grooming. It would be safe to budget a minimum of $400 dollars to cover these expenses.

Utility Deposits

Not a lot of elaboration is needed here; the power and water companies want to insure that you don’t skip out on the bill. Different areas have different ways of calculating the total deposit due. Some states average the prior 3 months utilities and use that as a basis for the deposit, others seem to penalize new businesses that have yet to establish a solid track record of performance, and others seem to arbitrarily pick a dollar figure out of the air. This again will depend upon your location and you should set aside a minimum of $500 to cover these expenses.

Website Design and Development

I cannot emphasize enough how important it is for you to have a fully functional and informative Dog Daycare web site prior to opening your doors for new customers. A good website is your chance to tell your story and a chance for your customers to understand your business and make a purchase decision before ever taking a step into your facility! It would cost tens of thousands of dollars in advertising to deliver the amount of  information to your customers via newspaper, radio or television that you can deliver via a website.

Cash Reserve

This is your most important start-up cost; you need to insure that you have enough capital to operate your Dog Day Care facility for a minimum of 6 months with out the benefit of additional revenue. Dog Daycares, although profitable, are businesses that take a number of months to build a reliable, predictable client base. This said the first few months of operation you will be operating the business not on the income that you have generated, but out of your cash reserves. You must insure that once your business is up and operating and you have established a solid client base that you replenish your cash reserve at the first available opportunity. You must not forget that Murphy’s Law has a nice way of going into effect at the most inopportune and cash critical moments; A/C units break, dogs get injured and you have to pay for veterinary care etc. This directly relates to the page Opening Cash Flow Analysis on this site.