Opening a Dog Grooming Business. Is it a Good Investment?

Being passionate about pets is a requirement to start a grooming business. Starting, managing and growing a business is an incredibly rewarding experience, but it comes with many challenges along the way.

It’s critical to start a business that you’re passionate about because it’s the meaning behind the work that will pull you through the difficult times.

Table of contents

A look at the pet industry 👀

It’s no secret that the pet industry is booming, and there are no signs of it slowing down. Pet ownership is at all-time highs, the vast majority of pet parents consider their furry companions family, and spending on a per pet basis continues to increase year over year. In fact, Morgan Stanley, the reputable investment bank and financial services company, expects the pet industry to nearly triple to $275 billion by 2030.¹

Ok, but how about grooming? ✂️

Well, that too is a multi-billion dollar industry surpassing $3 billion in annual sales by Cuddles’ calculations using data from IBIS World, a market research company.

IBIS World expects the pet services industry, which primarily includes pet grooming, daycare, boarding and training services, to grow 8.2% per year until 2025.² That brings annual spending on pet services to over $10 billion by then. But even without the fancy research, just look around you – have you ever seen more pampered pets in your entire life? We haven’t, and we love it! 😻

What does competition look like?

Competition in the grooming industry is high because the barriers to starting a grooming business are low. That simply means there aren’t many roadblocks to starting a grooming business compared to other more capital intensive and regulated industries. That has translated to the emergence of many independently owned businesses. In fact, as of 2020, there were 124,215 pet service businesses in the US.²

124,215

Pet services businesses in the US in 2020

The good news, however, is that the grooming industry has no dominant market leader that could deeply impair the chances of success for small business owners.

Currently, the biggest player in the pet services market is Camp Bow Wow with only 1.2% of the market and Aussie Pet Mobile with 1%.²

What are some of the challenges and risks of starting a grooming business?

Staff

People are everything in service based businesses, yet the labor market is tight. We continually hear the #1 challenge pet businesses face is recruiting, hiring, and retaining quality employees.

The drastic growth in pet ownership has also driven demand for Groomers, Veterinary Technicians, among other specialty jobs, which has made finding quality talent scarce. Make sure you keep employees happy because losing a key employee will impair financial performance.

Set-up Time & Costs

The time and costs required to set-up a grooming business have been adversely impacted by COVID-19. Many industries continue to suffer supply chain issues, which have made materials more expensive and difficult to source.

This goes for brick and mortar and mobile businesses alike; while construction costs for build-outs are more expensive, new and used auto prices are at new highs. Expect the initial capital needs for a brick and mortar business to range between $150,000-$250,000, and mobile units to range between $100,000-$150,000.

Capital Investment

Also plan for longer than usual timelines to build-out a brick and mortar business because construction workers are in high demand, and the permit process is slower than usual as city officials catch-up with approvals. Timelines vary greatly depending on the city, landlord, and the level of construction work. Nonetheless, expect the location search, landlord negotiations, and construction work to take 6 to 8 months if you’re lucky.

How much money can a grooming business generate? 🤑

The answer is, it depends. Multiple factors play into how much revenue and profits a grooming business can generate. The first important distinction is the type of business model: Brick and Mortar 🏬 vs Mobile 🚌. Although both offer the same grooming service, the cost structure and economics are different.

Brick & Mortar Grooming Salons 🏠

Geographic location will impact financial performance because construction costs and rental rates vary considerably across markets.

For example, prime real estate markets rent well north of $100/sq ft, while less attractive locations may cost $20/sq ft. Also, the pricing sensitivity of grooming services may vary by market, which will ultimately impact the business’ revenue potential.

Other factors that deeply impact financial performance include the size of the brick and mortar location, payroll costs, and any additional revenue generated through retail sales and other services such as daycare, boarding, and training.

How much money can a Brick & Mortar grooming business generate?

Generally speaking, a brick and mortar grooming business that is well managed may generate annual sales north of $350,000 and profits of $70,000 or more. Businesses that offer other pet services and that have a strong retail presence stand to make significantly more. Also keep in mind that a poorly run business will certainly generate slim to no profits.

Mobile Grooming 🚌

Location equally impacts mobile groomers because population density varies by market, which affects travel time, and in-turn, the number of pets a groomer can service per day. Densely populated markets allow for a groomer to service more dogs per day.

The economics of a mobile business vary dramatically based on its effectiveness in scheduling appointments sequentially and geographically. That means there shouldn’t be any gaps in your schedule and appointments should be in close proximity to each other.

The groomer’s time management at each appointment is just as important because every minute counts between parking, greeting the client, grooming the pet, and driving to your next appointment.

How much money can a Mobile grooming business generate?

A mobile unit can generate annual sales north of $100,000, and if the groomer is also the business owner, he or she can take home $70,000 or more.

Takeaway

Grooming businesses come in all shapes and sizes from the brick and mortar locations that offer multiple pet services to the one-person mobile groomer. First, it’s important to be clear on your personal preferences, access to capital, and the market dynamics before jumping into starting a grooming business. The bottom line is that a grooming business can be rewarding and profitable if run effectively and efficiently, and remember, being passionate about pets is the first requirement. 😻