Critter comforts: the boom in pet businesses has entrepreneurs vying for their spots as top dog

Entrepreneur, Nov, 2005 by Laura Koss-Feder

Pet Project

Scott Smith, 34, CEO and co-owner of New York City's Biscuits & Bath, can attest to the long hours involved with running a canine overnight, daycare and grooming center. Even though he and COO and co-owner John Ziegler, 34, unequivocally adore dogs, operating the three locations of their full-service facility and managing their 95 employees is a nonstop commitment.

"I love dogs and am fascinated by this industry, but it is hard work," says Smith, who owns a black Labrador retriever. "I sleep with my cell phone on right next to my bed. After all, the dogs we handle are like children to their owners, and we have to treat them as such, with the utmost care and attention."

The business began in 1990 with Ziegler dog-walking and pet-sitting in other people's homes. He eventually opened a dog gym and boarding facility in 1998, after his clients complained that they had no reliable, comfortable place to leave their pets when they traveled or even while they were at work. He conducted more research, speaking to Manhattan doormen, who are often left with the responsibility for apartment owners' dogs when the owners are away. They, too, attested to the lack of quality boarding facilities. Ziegler began paying doormen $50 referral fees when they recommended clients to him, and the business grew from word-of-mouth, Smith says.

But Biscuits & Bath also blossomed due to major points of distinction that set it apart from other Manhattan boarding centers. It had staff working in the locations 24 hours a day; provided cageless boarding with large corrals instead of harsh, steel cages; and charged affordable rates ($55 for a day of boarding)--even for pricey Manhattan. Armed with a background in consulting and an MBA, Smith joined the business in 2003 with hopes of growing it even more. The company, which had sales of more than $3 million in 2004, plans to open two more locations by yearend, and hopes to add two or three more centers in the New York City area next year, says Smith.

Just as Ziegler spoke to doormen for feedback, you need to query your market. If you are looking to distribute a product or service, for instance, talk to independent pet-shop owners or kennels to obtain their input. They also can distribute your product or help you promote your service, with a cut of sales given back to them. It's easier to break in this way than through the large pet-store chains, which have a set protocol for buying products on a national level and are usually less likely to take on the wares of a local entrepreneur.

"This is a very fragmented industry, and it makes the most sense to sell your product or service through the mom-and-pop retailers first, not the big guys," Chung says. "You also want to test the waters before you invest your money in your own shop or kennel, since that requires a much bigger capital investment."

Alisa Puga Keesey, 41, owner and founder of SheaPet, which manufacturers natural shea butter skin-care products for dogs and cats, test-marketed her merchandise in about 20 pet shops across her state before she began her company three years ago. She also sent product catalogs to 1,000 high-end boutiques nationwide. Puga Keesey's three-employee Santa Cruz, California, company projects sales of $1 million for 2005, and her products--which include shampoos, sprays and creams--are currently sold in 300 pet stores and at 30 veterinary practices worldwide.