Starting investments (mini-market)
200 000 - 300 000 ₽Revenue
20-25%Profitability
from 6 monthsPayback period
Pet shops have been and remain one of the most popular ideas for small businesses, with which small retail outlets can still oppose large chains. What is needed to open a pet store?
Own pet products store is perhaps one of the most popular business ideas that comes to mind for budding entrepreneurs. Opening a small pet store requires relatively small investments, and the business itself seems simple to organize and run compared to many other types of small businesses.One of the main advantages of pet stores in comparison with other types of retail is considered resistance to crises. Surprisingly, it is a fact: it’s easier for the owners to cut their own food costs than to transfer to a cheaper feed a beloved pet. Therefore, pet shops are experiencing an unstable situation in the Russian economy more easily than other types of retail.
How to register a pet store
The most convenient legal forms for opening a pet store are IE and LLC. There is no consensus on which form is preferred. But for newcomers to the business who do not plan to work on a large scale and engage in wholesale sales, the best option is IP. The fundamental difference between these two options is that in the event of debt obligations, all of the entrepreneur’s personal property may be called upon to fulfill them. The owner of the LLC is solely responsible for the authorized capital of the legal entity, which is 10 thousand rubles (50% of them may be funds of the project initiator, and the second half - funds of the attracted investor).
The procedure for opening an IP does not require much time and money. Detailed information on registering IP can be found in this article. As a form of taxation, it is recommended to choose a simplified system (STS). An application to transfer it (by default you are assigned a general taxation system) is submitted along with the registration. If you intend to conduct only retail trade, then during registration you will be able to select the OKVED code 08/18/2019 "Retail trade of pets and pet food in specialized pet stores".
As additional codes according to the latest classification (OKVED-2) for a pet store, you can choose:
47.19 Other retail sale in non-specialized stores
47.73 Retail sale of medicines in specialized stores (pharmacies)
47.74 Retail sale of medical and orthopedic goods in specialized stores
47.78 Other retail sale in specialized pet stores
47.89 Retail trade in non-stationary trading facilities and in markets with other goods
47.91 Retail trade by mail or the information and communication network Internet
47.99 Other retail trade not in pet stores, stalls or markets
08/18/2019 Courier delivery activities by various means of transport
To open a pet store in the selected premises, you will need to obtain permission from the SES and fire supervision. Also keep in mind that for the sale of animal medicines, that is, veterinary drugs, you will need a license, as well as a secondary or higher veterinary education. The same license is used when opening a veterinary pharmacy. In connection with this requirement, small pet stores are often limited to the sale of feed and other pet products, the trade of which does not require licensing.
Keep in mind that the line here is quite thin. For example, the sale of animal shampoos with antiparasitic properties, medicines for fleas or worms in tablets will also fall under pharmaceutical activities. Because of this, a whole category of monetary goods falls out of the assortment, many entrepreneurs still prefer to resolve the issue of licenses from the very beginning. And due to the need to obtain a license, they often have to register as an LLC and look for (at least nominally) a specialist with the appropriate education.
If you intend to trade in animals, you will also need appropriate veterinary certificates. All animals presented in the pet store will have to undergo an examination by a veterinarian, as a result of which a certificate is issued that confirms the absence of diseases in animals.
Choosing the format and premises of the pet store
The search for premises should begin to be undertaken even before the registration procedure of IP, since registration is carried out within 3 days, while it may take more than one month to search for a place. First decide on the format of your store. There is no clear classification of such, but it is conditionally possible to distinguish several types of outlets.
kiosks and small pet shops of the counter type with a narrow assortment. The most common format of pet stores. Most often these are retail outlets with a minimum area (10-15 sq. Meters) where mass-market goods are sold - food for cats and dogs, pet care products and a minimal set of accessories.
pet stores with a wider range of pet products - shops of a counter type or self-service of a larger area (usually from 20 to 70 square meters), where not only consumer goods can be sold, but also rare and expensive feeds, animals, veterinary preparations, etc.
highly specialized pet stores - stores focused on a particular type of animal, for example, products for lovers of aquarium fish, amphibians and reptiles, shops of rare and expensive feeds and more. Pet shops with a narrow assortment are found only in the largest cities of the country, in small cities such points are unprofitable.
For the most part, pet products take up little space, so you can easily place a fairly wide range of them on an area of 20-30 squares. The amount of rent will depend on the region, location, area, room conditions, traffic and many other factors.
The average rental value of commercial premises of different sizes in Russia, rubles *
| Region | 30 sq. m | 50 sq. m | 80 sqm m |
|---|---|---|---|
Moscow | 104 495 | 132 823 | 172, 684 |
St. Petersburg | 65, 520 | 106 413 | 114 944 |
The rest of Russia | 28, 686 | 44, 424 | 57 620 |
The place must satisfy several requirements:
convenient location;
proximity to busy roads (and preferably to a veterinary clinic);
high cross;
lack of competitors nearby.
Before you start searching for premises, study the density of competition in your city using services with online maps. As a rule, in the center of the city it will be the highest, but new sleeping areas may lack pet stores.
It is most difficult for individual pet stores to side by side and compete with chain stores: prices in the latter will be much more preferable and entice customers. But networkers are mainly concentrated in the largest cities of the country. For example, in Moscow, according to the 2GIS service at the end of March 2019, there are 975 pet stores, and more than 68% of them are chain stores - that is, those that have 2 or more outlets. Moreover, a little less than half of this number (423 points) falls on large trading networks, numbering from 20 pet stores. At the same time, if we compare the Moscow market with the market of Krasnodar (169 pet stores), we can note that the share of online pet stores does not exceed 38% (64 pet stores). Moreover, exactly half of this number (32 stores) falls on the two largest networks of the city.
In addition to the area, the location of your pet store is important. It can be opened in a separate building (on the ground floor, in the basement) or in a shopping and entertainment center (SEC). The latter option would be ideal if it were not for the high cost of rent, as well as the increased risks of the emergence of competitors from among networkers, with whom it is difficult to compete in prices. But the pet store in a separate building has one advantage over a point in a shopping center: pet owners can enter it with their pets. This is important if you intend to sell clothes for dogs, which requires a preliminary fitting before making a purchase.
When choosing a place for a store, study cross-country traffic (traffic is calculated on weekdays in the morning, afternoon and evening, as well as on weekends at different times). It also takes into account the presence of direct and indirect competitors, their range and pricing policy. If all conditions are satisfactory, a lease is concluded. The main thing that you should find out after you find the desired premises is why the previous tenants did not take root in the old place. Good places are usually not empty.
How to properly formulate a pet store assortment
A convenient location is undoubtedly a plus for your pet store, but not the only condition for its success. People should find not only your store, but also the goods they need in it. Therefore, carefully consider the range of products that will be presented in your store. Regardless of its format, product groups usually remain unchanged. These are feeds and various goodies, animal care products (shampoos, brushes, nail clippers, etc.), accessories and medicines. In addition, clothes and furniture for pets are in high demand (mainly cat houses, claws and dog beds).
What exactly will be included in a particular product category, which trademarks to choose and which price category to focus on depends on the area where your outlet is located. In this case, the preferences of the residents of the region and the species diversity of animals are of decisive importance. It is almost impossible to predict in advance which feeds will “go” and which are not, as well as to analyze how many bird, fish or rodent lovers live in your area.
Partly an approximate picture can be obtained by carefully studying the assortment of other similar pet stores located nearby, but this does not always work. According to entrepreneurs themselves, for example, large breeds of dogs can prevail in one district of the city, and small breeds in another (however, the relationship can be established here. For example, by counting the number of private houses in the courtyards of which large dogs are often kept for protection, and apartment buildings, whose residents usually have small animals), residents of one district prefer to keep birds, and residents of another prefer rodents ...
Generally speaking, in the first place in terms of popularity among domestic animals, cats and dogs are among Russians; there are about 30 and 20 million of them in Russia, respectively. However, competition is very high in this segment. Rodents and birds are much less common. Feed and equipment for keeping amphibians, insects, reptiles and fish can also be included in the assortment, but these positions should not only not prevail, but also occupy some significant share of the assortment. They can become a competitive advantage if a rare lover of such pets comes to you in search of what he could not find in other pet stores in your area.
Pet Supplies in High Demand:
dog food;
cat food;
cat litter;
remedies for insects and ticks (including collars);
shampoos for animals;
"bones" and other goodies, toys;
ammunition for dogs;
carrying for cats, cages, etc.
Therefore, the optimal ratio between feed and accessories in the assortment of the outlet is 50% to 50% or even 60% to 40%. In terms of feed, again, preferences may vary, so at the very beginning of the work do not try to save on the purchase of goods by purchasing immediately feed in large packages. It is better to try to cover a larger assortment, albeit in small quantities (this applies not only to packaging, but also the number of positions). Suppose that in the first weeks you have to travel to a wholesale base more often or contact suppliers, but you will not accumulate illiquid assets, which will subsequently be difficult to dispose of. You can also consult on the selection of a pet store assortment from suppliers, finding out the list of the goods most bought from them.
To identify the preferences of your customers, do not forget to ask visitors of your stores what kind of pets they have, what feed they prefer. Offer them services for the purchase of large packages of feed for the order, which will be more profitable for them than buying feed by weight or in small packages. Keep in mind that large packaged feeds are usually purchased by owners of adult dogs and large breed puppies. But lovers of cats and owners of small dogs prefer to take food in small packets, because, in their opinion, it quickly disappears in large bags. Inside the pet store, observe the principle of separation of goods, display cases for cats and dogs should be issued separately.
If your pet store is located in the city center, in a shopping and entertainment center (visitors of which are usually more solvent) or in the vicinity of a beauty salon for animals (in large cities there are also such specialized establishments), you can also include a small number of products in the assortment premium segment - stylish clothes for small dogs of the Chihuahua breed, toy terrier, Spitz, unusual carrying bags, etc. But still, it is better to bring these categories to order, inviting customers to choose their things of interest by catalogs.
As for suppliers, it is better not to focus on the products of one company, but to buy products in different companies, choosing where cheaper prices and wider assortment. The store owner should go to negotiations with suppliers on his own to evaluate the goods and agree on the best conditions.
Pet shop staff: requirements and salary levels
The store, which sells exclusively feed and accessories, has no staff requirements. However, if veterinary drugs are being traded, then you need to have a qualified specialist in the field of veterinary pharmaceuticals with higher or secondary veterinary education and at least 3 years of experience in the state. In any case, the experience of sales and working with people is also very desirable.
The pet store sales consultant should know almost everything about animals to help the buyer with the choice of feeds, medicines, vitamins and flea remedies. Since most pet owners are amateurs, the seller-consultant should be able to timely advise buyers of the goods their pets need, which the former often forget, for example, flea remedies - antimilint agents. More often than not, the responsibilities of sales consultants in small pet stores are quite broad: they are involved in laying out goods, and working with the cashier, and advising buyers, and keeping order.
Salaries of employees of a pet store are usually formed according to the “salary part plus percent of sales” scheme. On average, in Russia, judging by the ads on the site hh.ru, employers offer employees of pet stores a salary of 27 thousand rubles.
In Moscow and St. Petersburg, salaries can be 2-2.5 times higher. The number of employees and their schedule is determined depending on the size of the pet store and the mode of operation. For a small pet store, even two sellers will be enough. Salary costs can be reduced if the owner of the store becomes the counter. In addition to the salaries of sellers, it is necessary to take into account the costs of an accountant, which is best to hire for outsourcing. For a large format store, it’s worth considering the division of responsibilities and hiring an administrator, sales assistants, cleaning ladies, etc.
Pet Shop Franchises: Pros and Cons
Opening a franchise store can be a useful step not only for budding entrepreneurs, but also for those who want to save on purchases. One of the key benefits of buying a pet store franchise is the ability to receive discounts and privileges for a networker. Due to the fact that the network purchases large volumes of pet products, it has a substantial discount from suppliers. Often, the networks of pet stores are opened by the distributors themselves.
Usually companies offer approximately the same franchise package. In addition to exclusive delivery conditions, it also includes assistance in selecting a room and forming an assortment, rules for laying out goods, advertising materials, and a staff training program. Thanks to the franchise, the issue of documents for the sale of veterinary products and animals is much faster and easier to resolve, since some of the papers are already held by the parent company. Often, franchisees have the opportunity to connect to the finished online store.
Since cooperation with a large company usually involves a large lump-sum payment, not everyone is ready to go to buy a franchise. Do not give excessive importance to the branding of the company. The most appropriate purchase of a franchise will be only if the pet stores of the network are in your city, and the network itself is popular among the population. Otherwise, a brand from another city will not mean anything to the local buyer.
We calculate the income and expenses of the pet store
What kind of investment in a pet store will you need to make?
To open a small pet shop counter with an area of 10 square meters. meters in the region, it will take 400-500 thousand rubles. At the opening in the format of a mini-market, approximately 700 thousand rubles will be needed. If we talk about the opening of a pet store with an area of 50 square meters. meters on average will require from 1.5 million rubles, and a large store with an area of 100 squares - at least 2.5 million rubles.
Starting expenses, in addition to purchasing goods for a pet store, include repairs (the design of pet stores does not play a big role, therefore, the investments in this article are not large), shelving, display cases, cash registers and software. Racks are selected depending on the types and dimensions of the products you have presented. Keep in mind that feed in large packages takes up a lot of space. They are usually placed on the floor in order to save space. Fodders in small packages are put up on shelves, and various small items (toys for animals, medicines, treats, accessories, etc.) are put on display. Also, it is advisable to include a rental for 2 months in the amount of starting costs.
For the purchase of commercial equipment for the premises of a pet store with an area of about 50 square meters. meters will require about 100-150 thousand rubles. Glass showcases can be made to order. One glass box will cost 10-15 thousand rubles, but in any case it will be more profitable to install anti-theft equipment, which costs at least 70-80 thousand rubles plus materials for marking each heading.
The daily revenue of small pet stores in practice rarely exceeds 10-15 thousand rubles, while pet stores of a larger area can sell 30-80 thousand rubles a day. The average mark-up on the products sold is 50% (depending on the product category, it can range from 35-65%). As a rule, the margin for the most popular items (popular feed and toilet fillers) is lower (15-25%), and for less popular ones it can sometimes reach up to 200%. The optimal inventory is determined by the value of inventory balances in the amount of two-month revenue at purchase prices.
It is easy to calculate that a store, for example, with an area of 30 squares, working with two employees and an accountant in outsourcing, will not go negative if the revenue exceeds at least 150 thousand rubles a month. The key expenses of the main period will be salaries to employees (about 90 thousand rubles, including deductions) and rent (about 30 thousand rubles). Pet shops regardless of formats begin to pay off no earlier than after six months of work. The profitability of the business in the sale of goods for animals is usually at the level of 20-25%.
According to the owners of pet stores, one should not hope for a big profit from one point. Having decided on the assortment, having worked out the sales technology, having received the most favorable conditions from suppliers, entrepreneurs, as a rule, open the next similar store in another district of the city. Good profit will bring at least three to five outlets located in the city.
An interesting selection of business ideas on the topic: 20 business ideas for animal lovers Mikhail Semynin(c) www.clogicsecure.com - a portal to business plans and guidelines for starting a small business 08/18/2019