Last Updated: October 2, 2023 • Visit Blog Homepage

Starting a dog daycare business can be a rewarding and profitable venture, but it is important to keep a close eye on the costs associated with running the business. Overhead costs can quickly add up and eat into your profits if not properly monitored and controlled. In fact, according to the Washington Post, overhead costs for small businesses like dog daycares can be between 36% and 72%. Being able to keep these costs under control is a great way to increase your business's profit at the end of each month.

To get started, we should probably get something straight...what exactly are overhead costs? Overhead costs refer to expenses that are not directly related to the sale of goods or services, but are necessary for the day-to-day operation of the business. These expenses can include rent, utilities, insurance, marketing, and supplies.

Here are 6 tips for monitoring and controlling overhead costs at your dog daycare:

Track Your Expenses Regularly

To effectively control your overhead costs, it is important to keep track of all your expenses on a regular basis. This can be done manually or through the use of an accounting software. This will give you a clear understanding of where your money is being spent and where you can make adjustments to reduce costs. When you're just starting your business, it easy to just toss everything on the business credit card and never really analyze where your expenses are coming from. Create an Excel spreadsheet where you keep track of all your overhead costs. This will give you a better idea of where you're spending money and in which areas you could afford to spend more.

Evaluate and Negotiate Leases

Rent is a significant overhead cost for any business, and it's important to negotiate the lease agreement to get the best possible deal. Consider the location, square footage, and other expenses such as utilities when evaluating leases. Make sure to negotiate for lower rent or for a longer lease term to lock in a lower rate. If you're in a smaller town where there isn't a lot of available properties, it might be harder to negotiate (but prices should also be lower). If you're in a larger city or a place where there is a lot of available commercial space, you'll have a much easier time negotiating. Most property owners would rather sign on a renter right away at a slightly lower price than wait around and lose money on their property.

Reduce Energy Costs

Energy costs can be a significant expense for any business, especially for dog daycares that require a lot of air conditioning and heating. Investing in energy-efficient equipment, such as LED lights and programmable thermostats, can help reduce your energy costs. Here's a great checklist that you can use to see where your business can start lowering expenses. It's also not a bad idea to use energy reduction costs in your lease negotiation. Perhaps the owner won't give you a lower price, but maybe they'll install an energy-efficient heater and AC in your building. Those two things alone could drastically reduce your monthly energy prices.

Shop Around for Supplies

Supplies can be another significant overhead cost for dog daycares. Shop around for the best prices on items such as food, toys, and grooming supplies. Consider buying in bulk to save money in the long run. If you've got any friends in the industry, you could even do bulk purchases with them. If there are a couple dog daycares in town and you're not enemies, reach out and see if you can all lower your costs by doing some of your purchases together.

Re-Evaluate Insurance Policies

Insurance is a necessary expense for any business, but it is important to make sure you have the right coverage for your dog daycare. Review your insurance policies regularly to make sure you are not paying for coverage you don't need. Negotiate with insurance providers for the best possible rate. Let's be honest. No one likes insurance companies. They are a necessary evil. Reach out to a couple brokers and pit them against one another. Let them keep lowering their prices until you reach a point you're comfortable paying.

Consider Marketing Wisely

Marketing is another important expense for dog daycares. While it is important to have a strong marketing strategy in place, it's also important to be strategic about how you allocate your marketing budget. Consider using social media or targeted advertising to reach your desired audience at a lower cost. At the start, social media marketing is usually the most cost-effective. Start posting content for your new business. These could be pictures of completed grooms if you're a groomer or your dogs playing outside if you're a daycare. Just something to get some content flowing so it starts to fill up potential clients' newsfeeds.

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