Do you want to start a dog treat business at home? If YES, here is a complete guide to starting a dog treat business with NO money and no experience.
All over the world dogs are seen as friendly animals. This is because dogs are the most domesticated animals all over the world, with over half of households in the U.S. owning a dog. In fact, our culture has become so dog-friendly and accommodating owing to the increasing quest for companionship between humans and dogs—as well as the growing number of dogs in densely packed urban areas.
Whether it is a dog, cat or horse– pets need to eat. They need to have a clean and befitting place to sleep. Pets need to be cared for – and with over 300 million pets in the US, this makes it a booming business venture. There are several factors which led to the profitability of this business and they are; strong economic conditions, demographics, and medical research which highlight the health benefits of pet ownership.
If you love pets, most especially dogs and you are willing to start a business in line with your area of interest, then the dog treat business is a viable option for you to venture into. Dogs love treats, and dog owners love to spoil their dogs with everything from toys to tasty treats. It is a way to bond with pets.
The snacks industry is taking on a whole new role especially with those concerned about health and wellness. For most people, treats do not only have to taste good, they also have to be healthy. This trend toward healthful snacks has found its way into the pet industry, and there is an increased demand for healthy dog treats.
Dog owners believe that giving their dogs healthy treats is a way to show affection and provide a reward for training and also provide them with nutritional benefits. People use dog treats in various ways. They are used to reward, entertain, nourish and boost their dog’s health.
While dog treats provide a nutritional health benefit to the dogs, it also serves as a training aid with the number of people purchasing dog treats as a training aid on the increase.
If you are really good at making homemade meals for your pets, consider turning your skills into a profitable business. To succeed in the dog treat business, ensure that your product has been tested with lots of dogs. Don’t assume that other dogs would love your treat because your dog loves it.
So, if you have sufficient passion, then you might want to venture into this business. If you have been tinkering with starting your own dog treat business, but you lack sufficient knowledge about it, then this article will offer you all the necessary information you need to build a successful business.
Steps to Starting a Dog Treat Business at Home
1. Understand the Industry
In 2015, Americans spent about $2.6 billion annually purely on dog treats, while dog owners spend more than $9 billion on dog food. Dog treat sales experienced a compound annual growth rate (CAGR) of 9.3% between the 5 year periods of 2007-2012, reaching US$577.8 million (£368 million).
This growth in value sales of dog treats is particularly impressive despite the fact that the dog population in U.K. reduced from 9.1- 8.8 million between 2007 and 2010, before increasing further to 8.9 million in 2012.
Multinationals Mars and Nestlé dominate the dog treats market, they jointly account for over 55% of value sales in 2011, and Mars commands a substantial 35.7% share value in 2011. This share has remained stable in recent years. Nestlé’s Bonio, Bakers and Winalot brands hold a cumulative share value of 19.7% in 2011.
Revenue in the pet industry rose to $62.75 billion in 2016; this represents an increase in excess of 4% as against 2015. The average annual growth rate in this industry since 2002 is 5.4%, with steady revenue for over 20 years.
The growth in this industry has been largely due to the increased popularity of alternative treats (those containing all-natural ingredients) and other products by dog bakeries. The significantly higher unit price charged by most small dog treat producers has been a major player in driving growth in the sale of dog treats.
The treat industry is becoming more specialized; people are now seeing the dog treat business differently. They are looking far beyond just for feeding dogs. They want dog treats to be used as a training reward, a nutritious booster during physical activity, or as an occasional indulgence to shower love on their dogs.
Another trending use of dog treats includes its use to promote skin, coat, joint, oral, heart and digestive health. For example, there are certain dog treats that contain fat-burning ingredients and those with protein or vitamin supplements.
Many dog treats also feature improved ingredients and recycled packaging. This concept is found appealing to most dog owners. This gives dog treat business owners the chance to offer their customers different varieties of products depending on their preference.
Starting a dog treat business requires professionalism and a good understanding of how the dog treats industry works. You would also be required to get the necessary certifications and license to operate your pet food business in the united states; the industry is heavily regulated to guide against substandard food products.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
It is hard to generalize pet owners. A person’s age range can considerably affect their purchase of dog treat. The demographic and psychographic composition of those who require dog treats are divided into two groups: The baby boomers and millennials. The Baby Boomers are ready to replace their real kids with dogs. They tend to pamper their dogs more than a real human being. Their spending on dogs declines once they reach about 55 years of age, though.
Millennials are people born between 1985 and 2010. They see pets more like humans than animals. They are finding their independence and they are financially buoyant– and they are buying pets and pampering them with treats. These categories of people are great for the industry because they form part of the loyal dog treat customers for decades.
Almost anyone can have a dog. In addition, socio-economic factor has little or nothing to do with people’s love for dogs. So, if you are looking towards defining the demographics for your dog treat business, and then you should not focus on a particular type of person as anyone could fall in love with dogs.
3. Decide Which Niche to Concentrate On
The dog treat business is a business with several opportunities to diversify and gain patronage from dog owners. The dog treat market can be broken down into four major categories: rawhide/natural treat, indulgent treats, dental treats, and nutraceutical treats. Dog treat seems to be taking on a whole new role, especially for those obsessed with their dog’s health and wellness.
It is very important to understand your niche. In choosing your niche you have to ask yourself few questions. Do you plan to cater for high-end consumers? Will you be making treats with all organic ingredients? Decide your niche and then develop your marketing plan to go with it. To create a niche for yourself, you could focus on producing any of these dog treats.
- flaxseed and soy chips
- Products loaded with chia seeds
- High-protein snacks
- High-antioxidant snacks
- Organic treats etc.
The Level of Competition in the Industry
The Dog food business generally is a very competitive market, with several dog food companies witnessing a flurry of major merger and acquisition in recent years. For example, Mars acquired Procter & Gamble’s pet business; Nestlé acquired Merrick Pet, while the JM Smucker Co acquired Big Heart Pet Brands.
There are several dogs treat companies scattered all around the United States and other countries. So, if you choose to start your own dog treat business in the United States, you will definitely meet stiffer competitions. Besides, there are larger and household names when it comes to dog treat production. You must be ready to compete with them for customers.
4. Know Your Major Competitors in the Industry
In every industry, there are always brands that offer quality products that meet customer’s satisfaction. Some of these brands have been in the industry for a while and have become a household name in the industry. Below are some of the leading dog treat brands in the United States of America and all over the world;
- Old Mother Hubbard Biscuits
- Zuke’s Z-Filets Grilled Venison Recipe Dog Treats
- The honest kitchen
- iHeart dogs dental chew
- Natural Balance Rolls
- Rocco & Roxie Gourmet Jerky Dog Treats
- Innova Evo Treats
- Canidae Snap Biscuits
- Castor & Pollux Organix Dog Treats
As the demand for high-quality diet for dogs increase, premium foods are expected to keep driving growth in the dog food industry. High-protein dog treats and grain-free formulas will also keep up the growth drive. Dog owner’s preferences for minimally-processed foods will enhance the dog treat market value share. It is estimated that these factors will help to increase its average unit prices and help dog food grow to about 4% in current retail value terms.
As the economic prospects of millennials keep improving, the future of the dog treat industry is bright. Millennials are demanding more of their own dietary trends to be included into their dog treat purchases. It includes natural, grain-free, raw and limited ingredient formulas. These reflect some important food trends among this particular set of customers. Continued growth from this area is expected to lead to sales growth and the increase in unit prices over the years.
5. Decide Whether to Buy a Franchise or Start from Scratch
There is a price to pay in starting your own dog treat business, but there is also a price to pay when buying into a franchise system. When it comes to starting a business of this nature, it will be good to start gradually from the scratch.
This is cost effective and gives you the chance to use your passion and enthusiasm to make wholesome dog treats for your customers. Though it might take you some time to get well known, but you have the opportunity to build your brand and reputation in the dog treat industry.
6. Know the Possible Threats and Challenges You Will Face
Every start-up would face one challenge or the other. The more prepared you are for such challenges, the better your chance of surviving in the business. Some of the potential challenges you may face when starting up a dog treat business include:
- Dog treats are not in high demand in all areas
- You need to follow some specific regulations when processing dog treats
- You will need to test your recipes prior to selling
- If your dog treats are not produced according to regulations, it could lead to legal issues
- You will have to make adequate research on needed local permits
- Startup costs can be expensive if you go the franchise route
- You will need a kitchen area, baking equipment, and supplies
7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
When considering starting a dog treat business, the legal entity you choose will determine the long-term growth of the business; some dog treat company design their business to serve the market in their region, some for the national market, while others for the international market.
Generally, you have the options to either choose a Limited Liability Company, a general partnership, or a sole proprietorship for a dog treat business. Ordinarily, a general partnership should have been the ideal business structure for a start-up dog treat business especially if you are just starting out with a little capital.
But most start-up companies prefer limited liability Company for certain reasons. If you intend to grow your dog treat business beyond the shores of your locality and have clients from all across the United States of America and around the world, then the best option is for you to choose the Limited Liability Company instead of the general partnership.
One of the benefits of LLC is that it protects you from personal liability. In the case of any eventualities in the business, it is only the money invested into the LLC that will be at risk. This is not so for sole proprietorships and general partnerships. With the LLC, the owners’ personal assets are protected. LLCs are simpler and more flexible to operate and you don’t need many managerial formalities like a board of directors, shareholders meetings etc.
These are some of the factors you need to consider before choosing a legal entity for your dog treat business. If you critically study the various legal entities available for your dog treat business, you would realize that the LLC is the most suitable legal entity to choose. You can start your business as limited liability company and later convert it to a ‘C’ corporation or an ‘S’ corporation especially when you have the plans of reaching out more to the public.
Upgrading your LLC to a ‘C’ corporation or ‘S’ corporation will enable you to grow your dog treat company to be able to compete with major players in the industry. You will be able to easily transfer ownership and enjoy the flexibility that comes with management of your business.
8. Choose a Catchy Business Name
Choosing a catchy and interesting name for your business will help to create a positive perception about your brand, it tells people what your business represents. If you are considering starting your dog treat business, here are some catchy names that you can choose from.
- Cafe Canine
- Barking Bites
- Dog House Delights
- Dog House Divinity
- The Dog House Bakery
9. Discuss with an Agent to Know the Best Insurance Policies for You
In the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from. So, it is imperative to create a budget for insurance policy covers and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your company.
Here are some of the basic insurance policy covers that you should consider purchasing if you want to start your own dog treat company in the United States of America;
- Pet business Liability insurance
- Property Damage Insurance
- Loss or Theft of Keys insurance
- Care, Custody, and Control of Animals insurance
- General insurance
- Health insurance
- Workers Compensation
- Overhead expense disability insurance
- Business owner’s policy group insurance
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
Dog treat manufacturers are at the risk of their formula been cloned and sold by someone else. You must ensure that adequate trademark laws are put into place to guide against theft of formula and producing a replica of your products without permission.
If you want to protect your company’s products, logo, documents, media concepts and other things related to your business, you should file for intellectual property protection. If you want to register your trademark, you could simply file an application with the USPTO. The final approval of your trademark will depend on the review made by the attorneys as required by USPTO.
11. Get the Necessary Professional Certification
Aside from the results you produce, belonging to a professional body or having a professional certification is one of the main reasons why most dogs treat companies stands out. If you want to make an impact in the dog treat industry, you should work towards acquiring all the needed certifications in your area of specialization.
You are strongly encouraged to join some professional bodies in line with your business; it will go a long way to show your commitment towards the business. These are some of the associations you can join to keep abreast of information in the dog treat industry.
- American Pet Products Manufacturers Association
- Association of Companion Animal Behavior Counselors
- Association of Pet Dog Trainers
- National Dog Groomers Association of America
- Pet Food Association of Canada
- Pet Industry Distributors Association
12. Get the Necessary Legal Documents You Need to Operate
It is essential that you get all the necessary documentation before launching a business in the United States of America. The fact is that you cannot run a business successfully in the United States if you lack the proper documentations. If venture into a business without proper documentations, you will forfeit your business and also be charged to court.
These are some of the basic legal documents which you are required to have before you can run your own dog treat company in the United States of America;
- Certificate of Incorporation
- Business License and Certification
- Business Plan
- Non – Disclosure Agreement
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Consulting contract documents
- Apostille (If one intends to operate beyond the United States of America)
- VAT registration
- Federal tax identification number
13. Raise the Needed Startup Capital
When financing a business, the first action to take is to write a good business plan. Writing a good business plan will help you to convince your bank and investors to invest in your business. Here are some of the options you can choose from when bootstrapping your dog treat business.
- Raising money from personal savings and sale of personal stocks and properties
- Selling of shares
- Applying for loan from banks
- Raising money from investors and business partners
- Applying for business grants and funding from donor organizations
- Sourcing for soft loans from your family members and your friends
14. Choose a Suitable Location for your Business
The choice of location for your dog treat business is essential to your profitability and business growth. Your dog treat business should be located in a place that has a high rate of dog owners. With proper awareness and marketing, you will get them to notice you on time.
It cannot be overemphasized that the location you chose to open your dog treat business is key to the success of the business, hence entrepreneurs are willing to lease a facility in a visible location; a location where the demography consists of pet owners willing to purchase dog treats for their pets.
If you rent or lease a facility for your business in a not too visible location because of the price, then you should know that you would be spending more in promoting the business and also giving directions to potential customers.
One of the most important factors in choosing a location is accessibility. It must be easily accessible to your customers. A good and accessible location does not come cheap hence you should be able to allocate enough fund for rent in your budget.
15. Hire Employees for your Technical and Manpower Needs
The speed of production of dog treats may vary depending on the method used to produce them. The slowest methods involve manual mixing and oven baking. Dog treat manufacturers who use a highly automated machine can produce tons of products per hour. Both methods involve some steps in common like blending and conditioning of ingredients, baking, cooling, shaping and packaging.
Depending on the type of products you choose to start with. If you are starting with the manual mixing, you would need to employ more manpower than the automated machine.
The Service Delivery Process of the Business
The shapes and sizes of dog treats have been changed from the conventional bone shape. This is due to manufacturer’s efforts to differentiate their products. Dog treats are typically fortified with the essential vitamins and minerals necessary in a dog’s diet.
These are packaged and sold to the dog owners. Low-fat varieties are also produced for overweight dogs. There has been an improvement in the packaging technology for dog treats, whereby foil and plastic containers were formally used for selling dog treats.
16. Write a Marketing Plan Packed with ideas & Strategies
One of the ways to gain entrance into any business sphere is by putting the right words out there to the people about your business. This is extremely important because you will need to be in the faces of your potential clients. You might have the best dog treats but you won’t get to sell any if people don’t know about them.
Effective marketing is essential to the success of your dog treat business. You need to understand some basic facts about the dog treat business. These facts include: How to market your dog treat business and who your target customer is.
There are several ways you can sell your dog cookies – both online and offline. To increase your exposure in the marketplace, try a variety of techniques. You may find that one works best for you, and then you can focus more of your efforts in that area. Here are some ideas:
There are several online marketplaces where you can sell your dog treat products. Simply list your items for sale on the website. There are some notable online stores where retailers and customers can sell. Abe and Etsy are online marketplaces that help to process your order and deduct a percentage of the sales price as their selling fee.
Having an online store is not necessary, but it helps you to be able to ship your products directly to customers. You also get the benefits of not having to pay commission to retailers.
Partnering with Other Businesses:
Connecting with dog treat retailers and other pet-related businesses in your locality can be a way to gain exposure in the marketplace quickly. When working with partners, you should set up a referral fee or some other type of beneficial exchange. Ensure you make the referral fee attractive enough so they would be eager to partner with you.
Getting Exposure at Local Events:
Letting pets try your dog treats themselves can be a good business strategy for sales. Ensure you take your treats to places where you can meet pet owners with their dogs.
17. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
If you intend to start a dog treat business and you want it to grow the beyond the city where you started and become a national and international brand, then you must be ready to invest some cash on promotion and brand advertisement.
To promote your brand and corporate identity, you should make use of the print media, electronic media and the social media. It is cost effective and wide reaching to make use of social media (internet) platforms to promote your brands.
Another strategy is to sponsor TV and radio programs, and also to advertise your business in magazines and newspapers relevant to your industry. Below are the platforms you can leverage on to promote your dog treat brand;
- Place adverts on pet related magazines and newspapers, radio and TV stations
- Make use of word of mouth referrals from your loyal customers
- Take advantage of the internet and social media platforms like Facebook, Twitter YouTube, Instagram, LinkedIn, Snapchat, Badoo, and other platforms to promote your business
- Ensure that you position your banners and billboards in places that have a high turnout of pet owners around your city
- Distribute your flyers and handbills in target areas around your vicinity
Advertise your business on your official website and employ strategies that will help you pull traffic to the site.