Building a successful pet store business can be tough. But once you’ve overcome initial barriers, you’ll probably find that your profit margins are much higher than those of traditional retail businesses.
Of course, you may consider selling your business at some point. How easy is it to sell a pet store? Let’s find out.
Is It Difficult to Sell a Pet Store?
When it comes to purchasing pet stores, competition among buyers is stiff. Why?
The high profit margins of established pet stores make them especially desirable. Even when you consider the cost of staffing the store, feeding and housing the animals, and providing pet care, owners are more likely than not to see sizable profits.
With pet store businesses, it’s also typically profitable to open multiple locations. Once you have a solid business model and a formula for setting up and running a pet store, it’s easy enough to replicate as long as you have the initial capital.
Handing off an established pet store to a qualified purchaser is relatively easy, but before you go about selling your business (pet store or otherwise), it’s essential to have an accurate business valuation.
Your profit margins play a role in the overall value of your business, but they aren’t everything. A complete business valuation takes into account the following factors:
- Trends in your revenue
- Current competition in your market
- Your customer concentration
- Whether you have an experienced, competent management team
- Whether you have a competitive advantage over similar businesses
A good business broker can give you a reliable estimate of your business’s value. If you’d like a faster estimate, however, a business valuation calculator can provide a result in seconds.
Special Considerations When Starting a Pet Store Business
Selling a pet store typically isn’t too difficult but starting one can be. If you’re building a pet store business with a plan to sell in the future, you’re likely to make a decent profit. Before you begin, make sure you take these things into account:
- Pets need care: You’ll need to ensure that your store’s animals are taken care of 24/7 and pay for veterinary care if necessary
- You’ll need liability insurance: If an animal you sell injures someone or causes property damage, you may find yourself facing a lawsuit
- Regulations may be strict: Pet stores tend to be heavily regulated — more so in some areas than others
- Licensing: You may need a license to sell or handle some types of animals, especially exotic ones
Before opening a pet store business, it’s especially important to make sure you’re aware of the laws in your area.
There’s no blanket federal legislation governing pet stores, which means pet stores are primarily regulated by state and local laws. Some of these laws are designed to ensure that animals have adequate housing, food, and water. Others deal with sanitary disposal of pet waste and various types of debris.
If your store fails a state inspection or otherwise runs afoul of the law, it may be shut down. This, of course, impacts your ability to make sales. It also can significantly damage your business’s reputation.
Finally, state law and city ordinances can prohibit pet stores in their area after it has opened. That’s generally when consumers rush to buy the pets because of upcoming scarcity.
These barriers can be a challenge to overcome at first. But once your store is up and running, you’ll likely find that there’s plenty of competition to buy it.
Thinking About Selling Your Business?
Selling your business is often more complex than it sounds. But the process is simple and streamlined when you work with Sunbelt Business Brokers. We’ll help connect you with eager and interested buyers, develop a favorable deal structure, and receive maximum profit.
Our experienced team can help you get started selling your small or medium-sized business. Contact us today for your free business valuation!