Starting a dog daycare is a rewarding venture that combines a passion for dogs with smart business planning. The pet care industry is worth billions, with steady demand from working professionals, vacationing families, and owners who want to socialize their pets.
This guide will take you through the practical steps of shaping your business idea, planning your finances, finding the right location, and navigating the required permits to help you launch a successful dog daycare business in the U.S.
Step 1: Plan your business and research the market
Start by researching your local market. Use U.S. Census Bureau data to find neighborhoods with high household incomes. You can also join local pet owner groups on Facebook or Nextdoor to understand what services people want and what they will pay for their pets.
Next, analyze your competition. Use Google Maps and Yelp to list all dog daycares, walkers, and sitters within a five-mile radius. A frequent oversight is to ignore pet-sitting apps like Rover or Wag, which are significant competitors for your potential customers.
Understand your startup costs
Your initial investment will vary. Securing a location and renovating it are often the largest expenses. For example, durable rubber flooring can cost $5 to $12 per square foot. Other typical costs include:
- Lease Deposit & First Month's Rent: $5,000 - $15,000
- Renovations (fencing, flooring, play areas): $10,000 - $50,000+
- Licenses, Permits, & Insurance: $2,500 - $7,000
- Initial Supplies & Marketing: $2,000 - $8,000
Here are 3 immediate steps to take:
- Identify three potential neighborhoods and review their demographic data.
- Build a competitor analysis sheet that compares the services and prices of five local businesses.
- Create a draft budget that outlines your estimated startup costs.
Step 2: Set up your legal structure and get licensed
You will want to register your business as a Limited Liability Company (LLC). This structure protects your personal assets from business debts. For tax purposes, an LLC allows profits to pass directly to you without being taxed at the corporate level, which simplifies your filings.
With your business structure decided, you can get your federal and state credentials. First, apply for a free Employer Identification Number (EIN) directly from the IRS website. Most dog daycares do not need a federal USDA license unless they also breed or transport animals for resale.
Secure local permits
Most regulations happen at the city or county level. Contact your local animal control or department of health to ask about a Kennel License or Animal Facility Permit. These permits can cost between $100 and $500 annually and often require an initial facility inspection.
A frequent oversight is to underestimate the timeline for these local permits. You should plan for a 30 to 90-day approval window, as inspections and paperwork can cause delays. This is a critical path item before you can open your doors.
Here are 3 immediate steps to take:
- File for your LLC with your state’s Secretary of State office.
- Apply for a free EIN on the official IRS website.
- Contact your city or county clerk to get a list of all required local business and animal care permits.
Step 3: Insure your business and manage risk
Choose the right insurance coverage
Your business needs several layers of protection. You should look for General Liability, which covers client injuries on your property. A policy with $1 million per occurrence is standard, with annual premiums between $500 and $2,000.
A frequent oversight is to assume this policy covers the dogs. For that, you need Professional Liability, also known as Animal Bailee coverage. This protects you if a dog is injured, lost, or dies while in your care.
You will also want Property Insurance for your building and equipment. If you have employees, Workers’ Compensation is legally required in most states. You might consider providers like Pet Care Insurance, Mourer-Foster, or Kennel Pro who specialize in this industry.
Minimize daily operational risks
Insurance is your safety net, but daily protocols are your first line of defense. You can reduce incidents if you require temperament tests for all new dogs. This helps screen for aggression before a problem occurs.
In addition, create separate, supervised play areas for large and small dogs. Train your staff to recognize dog body language to prevent fights before they start. These steps show insurers you are a low-risk client, which can help lower your premiums.
Here are 3 immediate steps to take:
- Request quotes from three specialized pet care insurance providers.
- Ask each provider to confirm your policy includes Animal Bailee coverage.
- Draft a client intake form that includes a temperament evaluation checklist.
Step 4: Secure your location and buy equipment
Find the right facility
Aim for 75-100 square feet of combined space per dog. You should look for properties in commercial or light industrial zones, as residential areas often have strict rules against the noise and traffic a daycare generates.
When you negotiate a lease, be direct about your business. Landlords often worry about noise, waste, and property damage. Address these concerns upfront with your plans for soundproofing, waste management, and protective flooring to get better terms.
Purchase your supplies
Once your space is secured, you can buy your equipment. Durable rubber flooring is a major expense, but it protects dogs and your subfloor. In addition to flooring, you will need other items to get started.
- Fencing & Gates: $2,000 - $10,000
- Cleaning Supplies: $500 - $1,500 for initial stock
- Food/Water Bowls & Toys: $500 - $2,000
A frequent oversight is to forget office equipment. You will need a computer for records, a printer for client agreements, and a dedicated business phone. You can find professional-grade gear from suppliers like PetEdge or Ryan's Pet Supplies.
Here are 3 immediate steps to take:
- Check the zoning codes for three potential commercial properties.
- Draft a list of questions to ask landlords about property use.
- Build a sample equipment order from a supplier like PetEdge to estimate costs.
Step 5: Set up your payment and booking systems
Set up your payment processing
Most daycares offer daily rates alongside discounted 10-day or monthly packages. You might want to require payment upfront for packages to improve your cash flow. This also helps you forecast revenue more accurately.
When you choose a payment processor, look for low transaction fees and flexibility. Many new owners get caught by hidden monthly charges or hardware rental costs. These fees can add up, so read the fine print before you commit.
For daycares that need to accept payments on-site, JIM offers a streamlined solution. You can accept debit, credit, and digital wallets directly through your smartphone. Just tap and the payment is done.
At just 1.99% per transaction with no hidden costs or extra hardware, its rate is well below the typical 2.5% to 3% from other providers. This makes it useful for single-day drop-offs or last-minute grooming add-ons.
You can get started in three steps:
- Get Started: Download the JIM app for iOS.
- Make a Sale: Type the sales amount, hit sell, and ask your customer to tap their card or device on your phone.
- Access Funds: Your money is available right on your JIM card as soon as the sale is done - no waiting for bank transfers.
Here are 3 immediate steps to take:
- Decide on your pricing structure, including daily rates and package deals.
- Compare payment processor fees, looking for rates below the 2.5% industry average.
- Download the JIM app to test how it works on your phone.
Step 6: Fund your business and manage finances
Secure your startup funding
Many new owners look to SBA 7(a) loans. These government-backed loans can range from $50,000 to $150,000 for a new daycare. You will need a credit score above 680 and a detailed business plan. Lenders want to see you have thought through every detail.
You might also approach local community banks, which often have more flexibility than large national banks. A frequent misstep is to apply without a polished business plan. Your plan is the main tool you have to convince lenders your daycare is a sound investment.
Plan your working capital
Beyond startup costs, you need cash for daily operations. Plan for at least $15,000 to $30,000 in working capital to cover your first six months of rent, payroll, and marketing. Many businesses fail because they run out of cash before they build a client base.
Here are 3 immediate steps to take:
- Draft a detailed business plan to present to lenders.
- Contact your local SBA office or a community bank to discuss loan options.
- Calculate your working capital needs for the first six months of operation.
Step 7: Hire your team and set up operations
Build your staff
Your first hires will likely be Daycare Attendants. They supervise play groups, clean facilities, and handle check-ins. Expect to pay between $15 and $20 per hour. A safe staff-to-dog ratio is one attendant for every 10-15 dogs. Many new owners understaff to save money, which compromises safety.
You might want to look for candidates with Pet First Aid & CPR certification. If a great applicant lacks it, you can offer to pay for their training. This shows you invest in your team and prioritize animal welfare.
Streamline your daily workflow
Daycare management software automates bookings, client records, and billing. Platforms like Gingr, PetExec, or Time To Pet are industry standards. They handle administrative tasks so your team can focus on the dogs. This also reduces check-in times for clients.
Here are 3 immediate steps to take:
- Draft a job description for a Daycare Attendant that lists daily responsibilities.
- Research local Pet First Aid & CPR certification courses for your new hires.
- Schedule demos for two management software options, like Gingr and PetExec.
Step 8: Market your business and get customers
Build your online presence
Start with a free Google Business Profile. Fill out every section with photos, hours, and services. Ask your first few clients for reviews immediately. Positive reviews are the single most effective way to attract new customers searching for local dog care.
Your website does not need to be complex. A simple one-page site with great photos, clear pricing, and contact information is enough. Many owners delay their launch to perfect a website, but a basic online brochure is all you need to get started.
Use local marketing channels
Once your online profiles are set, focus on local partnerships. Visit veterinarians, groomers, and pet supply stores. You can offer a simple referral program, like a $25 credit for them and the new client for each successful referral.
You should also join local pet owner groups on Facebook. A frequent misstep is to post ads right away. Instead, participate in conversations and offer helpful advice to build trust. This positions you as an expert before you ever mention your business.
Here are 3 immediate steps to take:
- Create and fully populate your Google Business Profile.
- Draft a referral offer to present to three local veterinarians or groomers.
- Join two local pet owner groups on Facebook and introduce yourself.
Step 9: Set your pricing and profit margins
Structure your rates
Most daycares use a tiered model to encourage repeat business. For example, you might set a single full-day rate at $35. From there, you can offer a 10-day package for $300, which drops the daily cost to $30 and secures revenue upfront.
An unlimited monthly membership could be priced around $500. Many new owners make the mistake of only offering daily rates. This approach makes your income unpredictable and fails to build a loyal client base.
Calculate your margins
Once you have your rates, you need to understand your profitability. Aim for a gross profit margin of 15-25% after you cover direct costs like labor and supplies. Your pricing must cover all fixed expenses, such as rent and insurance, with enough left over for profit.
Do not just copy your competitors' prices. Calculate your own break-even point to understand the minimum revenue you need. Pricing too low to attract initial customers is a frequent misstep that can make it difficult to run a sustainable business.
Here are 3 immediate steps to take:
- Create three pricing tiers: a daily rate, a 10-day package, and a monthly membership.
- Calculate your break-even point based on your estimated monthly expenses.
- Research the package pricing of three local competitors to position your rates.
Step 10: Maintain quality and scale your business
Set your quality standards
To formalize your commitment to quality, you might want to pursue certifications. Look into programs from the Professional Animal Care Certification Council (PACCC) for your staff. This signals a high level of expertise to clients.
You should also track internal metrics. Aim for a client retention rate above 90% and fewer than one minor incident report per 100 dog days. These numbers give you a clear view of your performance and client satisfaction.
Plan your growth
Once you consistently operate at 85% capacity for three to six months, it is time to think about expansion. Many owners make the mistake of growing too fast, which can compromise the safety and quality you worked hard to build.
Your staff-to-dog ratio is your primary guide for hiring. When you regularly approach the 15-dog limit per attendant, hire another person. Your management software, like Gingr or PetExec, will help you track these capacity metrics and manage a larger operation.
Here are 3 immediate steps to take:
- Review the certification requirements on the PACCC website.
- Create a simple spreadsheet to track your monthly client retention and incident rates.
- Calculate your facility’s 85% capacity number to set a clear growth trigger.
Conclusion
Starting a dog daycare is about more than a love for dogs. Your success depends on the community you build with pets and their owners. Remember that trust is your most valuable asset. With careful planning, you are ready to create a business you can be proud of.
As you build that trust, simple operations help. For payments, JIM turns your phone into a card reader with a flat 1.99% fee and no extra hardware. It keeps things easy for you and your clients. Download JIM to get started.
