One of the more
frequent questions directed to us by our visitors is, "How
much does it cost to start a pet grooming business?" That's a
hefty question and it takes a hefty answer. In fact, most career
seekers believe that "startup costs" is simply the
expenses to purchase supplies and tools, and maybe a sign and an
ad in the Buyer's Guide. It's okay if that is what you think of the
startup costs, because your here to learn more about starting a
pet grooming business and we want to help you.
Even pet grooming
businesses, yogurt stores, fruit stands, dog walkers and lemonade
stands (why not?) should have business plans which detail startup
costs as well as many other areas of information critical to the
success of a small business, including pet grooming. We suggest
you read Business Plan
Main Menu and then come back here.
Too many new pet
grooming businesses close because the owner did not have enough
capital to start the business, and to maintain it until it could
turn a profit and pay a reasonable salary to the owner. Startup
costs are not just the cost for equipment, supplies, tools and an
ad in the Buyer's Guide. It is insurance, building improvements for
electrical, heating and air conditioning, and licenses and fees,
and professional working relationships for a company lawyer and
accountant. There are license and fees, perhaps rent and payments
for a van and repairs when you are mobile. There is advertising
and many office related costs.
Even more important,
YOU are a startup cost. How much do you need to net from the
business for your household budget? Don't get caught short and
have to endure the day-to-day stress by expanding into a business
without adequate savings and a credit line. At minimum you should
be able to maintain your household for six months without having
to take salary or draw from your new business. Don't stress the
business with your personal financial burden. Of course, you may
be successful quickly and be able to take a paycheck, but that
money could be used to expand the business even further.
The most responsible
and confident career seeker will prepare an Annual Profit
and Loss Projection (often called a "Pro Forma
Income Projection") which projects the income and expenses on
a month-to-month basis for your business. We suggest you project
at least 3 years in advance. Lucky for you there is a model of an Pet
Grooming Business Annual Profit and Loss Projection in
the industry's best pet grooming business book,
From
Problems to Profits. You
can photocopy it right from the book and it comes with
instructions. You cannot get a bank loan without such a Pro Forma
backed by your household budget for a good reason, most startup
business owners undercapitalize their businesses. Indeed,
sometimes as much as 75% of all new businesses go out of business
in 5 years for this reason.
Remember, the Annual
Profit and Loss Projection does not itself list the startup
equipment, tools, supplies, office, furniture, fixtures, signs,
and other hard goods you need to purchase. You must add those type
of purchases on. However, if you are paying interest for purchases
of these items for the business, the interest cost is listed on
the Annual Profit and Loss Projection as an operating expense.
Yes, this does apply
to you. Many career seekers look forward to the joy of grooming,
working with pets and not the "red tape" of running a
business. Hundreds of new pet grooming business owners go out of
business every year, and change careers or go to work for another
more professional business because they didn't find the way to
plan what they needed for at least a year in business and a year's
household budget before they committed themselves to
self-employment.
More information on
startup costs continues on the next page.
