How to Start a Dog Treat Business

Dog parents spend lots of money to keep their pets healthy and happy, and that includes buying
dog treats. In fact, the global pet snacks and treats industry is worth more than $33 billion and
still growing.
If you’ve ever made your furry friend homemade treats that they love, why not turn it into a
business? You could make the treats in your home kitchen, and sell them from an online store.
In this guide, you’ll learn the step-by-step process of starting a dog treat business.

Choose Your Products
First, you’ll need to determine if you want to select a niche, such as organic dog treats or low
calorie dog treats. You can also make treats for special occasions, such as Christmas or birthday
treats. Then you’ll need to develop your recipes and make a list of the ingredients you’ll need on
a regular basis.
Then you’ll need to determine how you want to package your treats and in what quantity.

Calculate Your Startup Costs
Once you know what you’re going to offer and what you need in terms of ingredients and
packaging, you can calculate your startup costs. Costs will include not only the ingredients and
packaging materials but also:
 Business licenses and permits
 A website
 A marketing budget
 Any equipment you need to make the treats
 Business insurance
Overall, starting a dog treat business may cost between $3,000 and $8,000.

Determine Your Prices
Your prices will depend on market prices for dog treats, but also your costs to produce the treats.
Typically, a package of homemade dog treats costs about $10 to $15, but you’ll need to
determine exactly what it costs for you to produce and package one package of treats. You
should try to reach a profit margin of at least 50%, so if it costs you $5 to produce one package,
you’ll sell it for at least $10.
If it costs you significantly more to produce one package, you’ll have to be careful not to price
yourself out of the market. For example, if you’re going to have to charge $20 for a package to

make a profit, you may need to find ways to reduce your costs to keep your prices in line with
the market.

Create a Business Plan
A solid, well-thought-out business plan is a necessity, even if you’re not trying to obtain funding
for your business. A business plan will define your strategy to grow your business, and to operate
your business on a day-to-day basis.
A business plan should include these sections:
 An executive summary of the highlights of your plan
 A company summary including your value proposition, mission, and vision
 A specific description of your products and pricing strategy
 An analysis of the size and growth potential of the dog treat market
 A competitor analysis and your proposed competitive advantage
 Your sales and marketing plan
 An operating plan
 A summary of how you’ll manage the company, and your plans to hire employees
 Your financial projections
Keep in mind that your plan will likely change over time as you learn what works and what does
not.

Set Up Your Website
You’ll need a website from which you will sell your dog treats. You can create a website yourself
for a few hundred dollars through many online services, or you can have one professionally
developed, but that will cost more. Alternatively, you could set up a store on Amazon, Etsy, or
Shopify.
In any case, you’ll want to heavily promote your online store on social media and use other
strategies to direct traffic your way.

Choose a Business Structure
If you start operating your business on your own without forming a business entity, you’ll be
operating as a sole proprietorship. With a sole proprietorship, you and the business are
considered one and the same, and the business is a disregarded entity according the IRS.
This means that the business itself is not taxed. The profits are instead passed through to you to
be included on your personal tax return. However, since you and the business are considered one
and the same, you are personally liable for the obligations of the business. So if your business is
sued, perhaps because a dog became ill after eating your treats, you are personally liable, which
puts your personal assets at risk.

For this reason, many entrepreneurs choose to form a limited liability company (LLC), which
offers personal liability protection because you and the LLC are considered separate entities. An
LLC also offers the same pass through taxation as a sole proprietorship. The LLC itself is not
taxed.

Get Business Licenses and Permits
You may need various business licenses and permits at the state and local levels, both those that
are specific to a dog treat business, as well as more general licenses and permits. You may need
permits to operate your business as a commercial kitchen and a manufacturing facility.
Check with your state and local governments for requirements.

Obtain an EIN
If you are hiring employees or if your business has more than one owner, you’ll need to obtain an
employer identification number (EIN). An EIN allows the IRS to identify your business for tax
purposes, much like a Social Security number does for individuals.
It’s simple and free to apply for an EIN on the IRS website.

Get Business Insurance
You’ll need to speak with your insurance agent about the types of business insurance you may
need. You’ll definitely want to at least get general liability insurance which covers you in a
variety of situations. You may also want to insure your business property or equipment.

Open a Business Bank Account
Even if you operate your business as a sole proprietorship, you should open a bank account for
your business to keep your personal and business finances from mingling. This will simplify
your accounting and help you considerably at tax time.

In Closing
Now could be a great time to start a dog treat business, as the industry is projected to grow quite
quickly in the coming years. It only takes a small investment and you can run your business from
home. Just be sure to