The U.S. pet daycare market is valued at $1.73 billion and is projected to grow by more than 8% by 2030. The average pet owner estimates that they spend about $500 on their pets annually, with more affluent households spending an average of $1,523 per year.
These figures, as well as the projected growth for the pet daycare market, have inspired many animal-loving entrepreneurs to dip their toes into the industry. However, it’s important to carefully consider this situation, understand the factors that impact a doggy daycare’s finances, and know how to optimize profits.
In this guide, we’ll explore how much dog daycares make and the best practices you should know before launching your own business.
Dog daycare monthly incomes vary widely based on the following factors:
For example, an established, New York City-based dog daycare offering additional in-house grooming services might generate $125,000 in monthly revenue. On the other hand, a smaller dog daycare based in Asheville, North Carolina, that only offers daycare services may make $7,000 each month.
Remember that you do have a say in how much your dog daycare makes, and there are steps you can take to boost revenue. However, you’ll first need to understand what factors influence your bottom line and how to manage them.
The first factor to consider in the profitability analysis of dog daycares is market demand. The American Pet Products Association reports that approximately 63.4 million households in the U.S. own a dog. With the increase in dual-income households and a general shift toward higher pet ownership, more dogs require care during work hours.
Moreover, pet owners are more aware and concerned about their pets' physical and mental health than ever before. With more people living in apartments and small spaces, the need for open areas for pets to play is crucial. The demand for quality dog daycare services that provide ample exercise, socialization, and mental stimulation is growing.
Analyze demand in your area by consulting market trends to understand local dog owners’ needs and preferences. Additionally, study demographic data to estimate the local market size, monitor relevant online search trends, and identify and assess your competitors. While you can’t increase demand where there is none, you can adapt factors like your service offerings, prices, and hours to meet potential customers’ needs.
Dog daycares with multiple revenue streams are usually more profitable and financially stable. In addition to daycare services, you might also offer overnight boarding, grooming, veterinary services, and pet-care products. By diversifying your offerings, your daycare can increase its revenue per customer and create a more stable income base.
Researching demand in your area can also help you implement new revenue streams. Use your understanding of customers’ needs and desires to roll out new services they’ll want to take advantage of. Compare your services to those your competitors offer and fill in any gaps. Stay on top of pet industry trends, proactively implementing relevant services or products customers will likely come looking for.
The primary costs associated with running a dog daycare include:
Staffing is a significant but necessary cost. You need enough qualified, well-compensated employees to provide adequate supervision and care for the dogs. And while it is a major expense, insurance is highly recommended, given the potential for injuries or damages in a dog daycare.
The costs can be high, but you can manage them with efficient operations and careful planning. Economies of scale also play a significant role. In other words, the cost per dog decreases as your business grows and serves more dogs, increasing profitability.
Just like revenue, profit margins in the dog daycare industry vary widely. The average profit margin for dog daycares sits between 10% and 25%. However, efficient business management and a keen eye on cost control allow careful businesses to achieve much higher profit margins.
A profitability analysis is a financial assessment that involves evaluating your business’s revenue streams, costs, and profit margins to measure and analyze profitability. Not only will you measure the overall profitability of your business, but you’ll also track how profitable each revenue stream is.
To determine profitability, you’ll need to:
These analyses are rooted in data, and to get the most accurate insights, you need a robust business analytics tool. Gingr’s solution makes monitoring and analyzing your financial data and other key metrics easy. All of your dog daycare’s data is consolidated on a single platform, allowing you to analyze performance with one login. Plus, the software presents your data in clear, easy-to-understand visual formats.
Additionally, you can compare data from specific periods or date ranges to identify trends and changes. For example, you might track profit growth before and after offering pet grooming services.
To increase profitability, dog daycare businesses can consider the following:
Carefully track relevant key performance indicators (KPIs) such as revenue per dog, average daily attendance, and retention rates to proactively identify any gaps or weaknesses. This way, you can address them before they become significant losses.
For instance, if daily attendance is down, you could start a referral program with desirable incentives for customers who refer their friends. Or, you might ramp up your marketing efforts.
Dog daycares can be profitable, driven by the increasing demand for pet-care services and the potential for multiple revenue streams. However, profitability is not guaranteed and depends on many factors. As with any business, a successful dog daycare requires the right technology, dedication, love for the job, and smart business strategies.
Book a Gingr demo today to see what our specialized pet-care software can do for your dog daycare business.
Additionally, browse these additional resources to learn how to strengthen your business: