Dog Treat Business Plan, With a 12-Month Projection

A dog treat business plan sets out the treats you'll bake, the state rules you'll sell under, who buys them at what price, and the first year month by month. It can be a profitable business: treats are cheap to make, a bag sells for several times its ingredients, and dog owners come back. The thing that sets dog treats apart from people food is that they're animal feed, so most of the paperwork is with your state, not your county health department, and every state you sell into can ask for its own registration. In the example below, a treat baker selling at markets, online and to pet shops reaches 730 bags and boxes a month by month 11, makes a profit from month 1, and ends the year about $16,500 ahead on top of paying for the baking. Below is each part of the plan, the projection, what selling into more states costs, and a free template.

The short version

• Dog treats are animal feed: they must be safe, made under sanitary conditions and truthfully labeled.
• Many states require registration or a license before you sell, even at a farmers market.
• Shipping an online order into another state counts as distributing there; check that state's rules first.
• Cost a bag from a batch of four, not one: your time per bag halves.
• Price for markets, online, pet shops and gift boxes separately.
• Budget registration and testing for every state you sell into.
• TaroStack costs every batch, codes every bag, and traces any batch to the shops that got it. More below.

Part 1: the business description

Kaʻena Dog Treats, a made-up dog treat bakery I use in these examples, is starting out. Its description reads:

Kaʻena Dog Treats bakes small-batch dog treats, peanut butter and pumpkin, sweet potato and taro, in a rented kitchen on Oʻahu. We sell bags at two Saturday markets and online within the state, wholesale to pet shops and groomers, and make birthday boxes to order. Every bag carries its batch code and best-by date, and every product is registered with the state before it's sold. In the first year we plan to sell 700 bags a month.

Part 2: the rules

Dog treats are pet food, and pet food is regulated like other animal foods: federal law requires that it be safe to eat, produced under sanitary conditions, contain no harmful substances and be truthfully labeled. The label needs the product's name, the net quantity, the name and place of business of the maker or distributor, and the ingredients from most to least by weight; some states add their own labeling rules, many based on AAFCO's model (FDA).

Registration is a state matter. Many states require pet food and treat registration, or a distributor license, before you sell into them. Shipping an order into a state after an online sale counts as distributing there, and so does selling or even giving away homemade treats at a farmers market (AAFCO). Before your first market, call your state's feed control official. How labels, registration and pricing fit together is in how to price homemade dog treats. This is general information, not legal advice.

Part 3: what a bag costs

The costs come from how to price homemade dog treats, baking four batches at once. For the plan, registration moves to the monthly costs and kitchen time is paid by the hour:

A birthday box is three bags' worth of treats, a box and ribbon, and the card fee: $9.56.

Part 4: customers and prices

Four hundred wholesale bags a month is about 20 shops and groomers taking 20 each. A wholesale bag leaves a third of what a market bag does, so shops are for reach and steady volume, and markets and birthday boxes carry the profit. An order form for shops, with a price list and minimums, is in wholesale order form template.

Part 5: the first year, month by month

Sales start at 15% of full speed and reach 100% by month 11, against $355 of fixed costs a month: market booths, insurance, state registration and testing spread over the year, the website, and marketing and samples.

The year's sales are $36,200 and the profit $16,482, on top of $20 an hour for the baking. With small fixed costs the cash is never short; the plan's real limits are kitchen hours and how many shops will stock you.

Part 6: what selling into more states costs

The plan sells within one state. Online sales tempt you further, and each state you ship into can mean its own registration, and sometimes its own label rules. Fees vary by state and product; in this example, say $100 a product a year, with three recipes:

Ten states would cost more than a month's profit before the first bag ships, and that's before any lab tests a state asks for. Expand state by state, where the orders are, and check each state's requirements before the first shipment.

Part 7: the startup budget

What a market stall costs over a season is in cost to sell at a farmers market.

Get the template

Download the dog treat business plan template. Type your treats with their price, variable cost and monthly volume at full speed, your fixed costs and startup budget, and how fast sales will come; it works out each month's sales, profit and cash, the first month with a profit and the lowest cash point. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.

Where this stops working

Three recipes become eight, in two sizes, for twenty shops and a website. The peanut butter comes from two suppliers, and one of them recalls a lot. Which batches used it, which shops got those bags, and which are still on your shelf? A notebook of batches with dates and no lot numbers can't say, and a pet shop that pulls your treats over a recall it can't scope may not put them back.

How TaroStack does it

TaroStack costs every batch, codes every bag and traces any lot to the shops that got it.

Every batch, costed. Each treat is a recipe, with units converted: buy flour by the 50 lb bag, bake by the gram. Recording a batch takes ingredients off stock from the lots used, at what you paid, divides by the bags that came out good, and puts them into a lot with a best-by date. Lot labels print with the batch code.

Every shop, a customer. Pet shops and groomers are customers, with sales orders, one picking list and delivery notes that list each case's lot and best-by date. Stock goes out first-expired-first-out. Margins are reported by product and by customer, so the shop that's worth the drive is visible.

And any lot, traced. If a supplier recalls a lot of peanut butter, one report walks it forward to every batch that used it and every shop that got those bags, with contact details and what's still on your shelves.

Lots, recalls, recipes, batches, lot labels and margins are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.

Questions people also ask

Is a dog treat business profitable?

It can be. In the example, a market bag leaves $6.01, a wholesale bag $2.03 and a birthday box $14.44, and the year ends about $16,500 ahead on top of paying for the baking.

Do I need a license to sell dog treats?

Often, yes. Many states require pet treat registration or a distributor license before you sell, including at farmers markets and online. Ask your state's feed control official before your first sale.

How much does it cost to start a dog treat business?

About $3,440 in the example: state registration and label review, a lab test, a mixer, cutters, pans and a dehydrator, bags and labels, label design, a market tent, a website and $1,000 of working cash.

Can I sell dog treats online to other states?

Shipping into a state after an online sale counts as distributing there, so check each state's registration and labeling rules before you ship. Each state can mean its own fees.