Small Biz Watch: Pets can be a profit center
There's a famous investing maxim: Buy what you know. People thinking about starting a small business often put their own twist on that advice: Sell what you know. Why do you think opening a restaurant is such a popular choice for first-time business owners? Pretty much all of us think we are knowledgeable about food. Another popular choice is animal lovers starting a pet-related business. And doing so might not be such a bad idea, according to Laura Bennett, CEO of Embrace Pet Insurance. She recently blogged about the top pet-related business trends for 2006 at the popular Small Business Trends blog. Some of her insights:
Growth in unique pet goods. Much of the growth in pet spending in 2006 will come from newer pet items such as pet deli snacks, toys, luxury items, and convenience accessories like programmable feeding and watering stations, warming mats, and self-cleaning litter boxes. High-end specialty pet stores will thrive.
Growth in pet services such as grooming, boarding, pet photography, dog walking, and pet sitting. More pet owners will pay for these services as it is becoming socially unacceptable in some areas to leave your dog alone during the day or your cat alone for the weekend.
Steady increase in pet insurance. The estimated 2005 market size is approximately $160 million, and it is projected to grow by 25 percent to $200 million in 2006. More and more employers will offer pet insurance as a voluntary benefit, and some of the larger pet insurance companies will start mass media advertising, increasing overall consumer awareness.
Increasing online sophistication from new pet-related businesses. Traditionally, pet lovers have set up small-business sites with little thought about design, target audience, and content. Newer players, such as Urbanhound and WagginTails, are beginning to be more sophisticated in design and E-commerce, reaching their target audience via website usability, search-engine optimization, paid search, and word of mouth.
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