Most businesses despite the product fall under two general categories:
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Answered 3 years ago
To start a pet consumables business, you must keep in mind the following points. Let us look at these points one-by-one:
STEP 1: Plan your Business: A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
I. What are the start-up and ongoing costs?
II. Who is your target market?
III. How much can you charge customers?
IV. What will you name your business?
A pet food business can be started with little upfront capital. In many states, business owners can be approved to assemble pet foods in their kitchens. This eliminates any need for a processing facility, and businesses can start by renting a booth at a farmer’s market or selling through established retailers so that they do not have to purchase a storefront. Other than any licensing fees, the main expense that is left is the raw materials needed to assemble and package pet food. To save money on these supplies, business owners can purchase what they need from wholesalers. Finding a wholesaler with a low minimum order will help business owners keep their initial investment as low as possible, until the profits from sales can be used to place larger orders for supplies.
The ongoing expenses for a pet food business include the cost of purchasing additional ingredients, and shipping or delivery fees. The cost of ingredients becomes small once a business can afford to place large wholesale orders, and shipping or delivery fees are usually built into what customers are charged. A pet food business’ ideal customer is a pet owner whose is concerned about what their pet eats and has discretionary income. Such a pet owner will be willing and able to pay for a high-end pet food.
A pet food business makes money by selling pet food. While businesses may make food for almost any pet, most specialize in foods for dogs or cats because they are the most popular pets. While cheaply made pet foods can cost just a few dollars per pound, high-end, local pet food companies frequently charge much more. Chef K9 charges between $7.25 and $10.25 per pound, and many other companies are in this price range. Pet food businesses can be extremely profitable. Businesses that provide organic and gourmet pet foods can see profit margins as high as 40 percent. While the exact profit a business makes depends on how large it grows to be, a successful pet food business could break a six-figure annual profit with margins like these.
Choosing the right name is particularly important. Then, when registering a business name we recommend checking if the business name is available in your state, federally by doing a trademark search, searching the web, and making sure the name you choose is available as a web domain to secure it early so no one else can take it.
STEP 2: Form a legal entity: Establishing a legal business entity such as an LLC prevents you from being personally liable if your pet food business is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's. You should also consider using a registered agent service to help protect your privacy and stay compliant.
STEP 3: Register for taxes: You will need to register for a variety of state and federal taxes before you can open for business. To register for taxes, you will need to apply for an EIN. You can acquire your EIN for free through the IRS website, via fax, or by mail.
STEP 4: Open a business bank account & credit card: Using dedicated business banking and credit accounts is essential for personal asset protection. When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil. Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
Open a business bank account:
I. This separates your personal assets from your company's assets, which is necessary for personal asset protection.
II. It also makes accounting and tax filing easier.
Get a business credit card:
I. This helps you separate personal and business expenses by putting your business' expenses all in one place.
II. It also builds your company's credit history, which can be useful to raise money and investment later.
STEP 5: Set up business accounting: Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses: Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down. Certain state permits and licenses may be needed to operate a pet food business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits. Most businesses are required to collect sales tax on the goods or services they provide. For more information about local licenses and permits:
I. Check with your town, city, or county clerk’s office
II. Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
STEP 7: Get Business Insurance: Just as with licenses and permits, your business needs insurance to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss. There are several types of insurance policies created for different types of businesses with different risks. If you are unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it is a great place to start for your business. Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
STEP 8: Define your brand: Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors. Pet food businesses may be marketed both locally and online. Business owners may be able to reach local customers by partnering with independent pet stores, pet sitters, dog walkers and groomers in their area. These professionals already have relationships with pet owners who trust them, and they may be willing to recommend a pet food that’s healthy and gives them a commission.
Online, businesses may sell through their own site or via a retailer like Amazon. When selling through a large retailer, owners should calculate their prices so that all additional fees are covered. Pet food businesses can set themselves apart from other businesses in the industry by offering totally unique pet food. Businesses can do this by creating one-of-a-kind recipes or by packaging their pet food in an unusual way. Duke’s Dog Dogz, for example, make a vegan “hot dog” for canines.
STEP 9: Establish your Web Presence: A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
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Answered 3 years ago