Financial Management for Pet Care

Passion for dogs doesn’t pay the bills. Understanding your unit economics, pricing strategically, managing capacity, and controlling costs ensures your daycare or boarding facility survives lean periods and thrives long-term.

Understanding Your Cost Structure

Fixed Costs

Costs that remain constant regardless of occupancy:

• Rent/mortgage
• Insurance premiums
• Loan repayments
• Base utility costs
• Software subscriptions
• Licensing fees
• Minimum staffing levels

Variable Costs

Costs that change with occupancy:

• Additional staffing for busy periods
• Food and treats (if provided)
• Cleaning supplies
• Laundry
• Credit card processing fees
• Utility increases from higher usage

Calculating Cost Per Dog-Day

Understanding your cost per dog-day is fundamental:

Monthly Fixed Costs + Monthly Variable Costs
÷ Number of Dog-Days Delivered
= Cost Per Dog-Day

Example:

• Fixed costs: £8,000/month
• Variable costs: £2,000/month at 500 dog-days
• Total: £10,000 ÷ 500 = £20 cost per dog-day

Your price must exceed this to make profit.

📊 Crunch your numbers: Use our free Pet Business Revenue Calculator to model your facility’s income and profit across all your services — with seasonal demand and capacity planning included.

Pricing Strategy

Market Research

Before setting prices:

• Survey 5-10 competitors
• Note their services and positioning
• Understand the price range in your area
• Identify gaps (budget vs. premium)

Cost-Plus Pricing

Start with your cost per dog-day, add desired margin:

Cost Per Dog-Day × (1 + Desired Margin) = Price
£20 × 1.4 (40% margin) = £28 minimum price

Value-Based Pricing

Price based on perceived value:

• What are competitors charging?
• What premium does your service justify?
• What will the market bear?

Price Positioning

Package Pricing

Packages encourage commitment and improve cash flow:

Ensure discounted package prices still exceed your cost per dog-day.

Revenue Optimisation

Capacity Utilisation

Track occupancy rate:

Actual Dog-Days ÷ Maximum Dog-Days = Occupancy Rate

Target: 65-80% average occupancy (higher creates stress; lower suggests marketing issues)

Seasonal Adjustment

• Premium pricing for peak periods (holidays, summer)
• Promotions during slow periods (January, September)
• Minimum stays during high-demand periods

Additional Revenue Streams

Reducing No-Shows

No-shows directly impact revenue:

• Require deposits (typically 20-50%)
• Enforce cancellation policies
• Send reminders (automated via software)
• Track no-show patterns and address with clients Check out Cattery Software for Cat Boarding Facilities. Explore Dog Boarding Software solutions. Check out Dog Daycare Software. See how Kennel Software can help. Learn more about Pet Grooming Software.

Cash Flow Management

The Cash Flow Challenge

Pet care businesses often struggle with cash flow because:

• Seasonal demand creates uneven revenue
• Staff costs are relatively fixed
• Customers may delay payment
• Unexpected costs (vet bills, repairs) arise

Cash Flow Strategies

Build reserves: Maintain 2-3 months of operating costs in cash

Require prepayment: Packages and deposits improve cash position

Manage payables: Negotiate payment terms with suppliers

Plan for seasonality: Budget based on lowest revenue months, save surplus from peak periods

Separate accounts: Keep operating funds separate from savings/reserves

Key Financial Metrics

Track these monthly:

Budgeting

Creating Your Budget

1. Start with realistic revenue projections (conservative first year)
2. List all fixed costs
3. Estimate variable costs at projected occupancy
4. Add contingency (10-15%)
5. Calculate expected profit/loss

Monthly Budget Review

Compare actual vs. budget:

• Investigate significant variances
• Adjust forecasts based on trends
• Make operational changes if needed

Scenario Planning

Model different scenarios:

• Best case: High occupancy, low costs
• Expected case: Realistic projections
• Worst case: Low occupancy, unexpected costs

Ensure you can survive the worst case.

Tax Considerations

Deductible Expenses

Typically deductible for pet care businesses:

• Rent and utilities
• Insurance premiums
• Staff wages and benefits
• Equipment and supplies
• Marketing costs
• Professional fees (accountant, legal)
• Software subscriptions
• Vehicle expenses (if used for business)
• Training and certifications

Record Keeping

Maintain organised records:

• All income documentation
• Expense receipts
• Bank statements
• Payroll records
• Asset depreciation schedules

Consult with an accountant familiar with small business and pet care.

Frequently Asked Questions

What profit margin should I target?

Net profit margins of 15-25% are healthy for well-run pet care businesses. New businesses may be lower while building clientele.

How do I know if I’m pricing correctly?

If you’re consistently at capacity, you may be priced too low. If occupancy is below 50%, pricing may be too high (or there are marketing/service issues).

Should I charge extra for holidays?

Yes. Holiday periods have high demand and often require premium staffing. Charging 20-50% more is standard practice.

How do I handle clients who consistently pay late?

Require prepayment or card-on-file with automatic charging. For existing late payers, implement deposit requirements.

When should I hire an accountant?

From the start if possible. At minimum, hire an accountant for year-end tax filing and quarterly reviews once you’re generating significant revenue.

Conclusion

Financial management isn’t glamorous, but it’s what keeps your business alive. Know your numbers, price for profit, manage cash flow carefully, and review metrics monthly. Combine sound financial practices with excellent care, and you’ll build a sustainable business.

Related reading: Pet Boarding Business Plan Guide, Dog Boarding Pricing Strategies, How to Start a Kennel Business