Starting a cat cafe can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful cat cafe.
Importantly, a critical step in starting a cat cafe is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here.
14 Steps To Start a Cat Cafe:
- Choose the Name for Your Cat Cafe
- Develop Your Cat Cafe Business Plan
- Choose the Legal Structure for Your Cat Cafe
- Secure Startup Funding for Your Cat Cafe (If Needed)
- Secure a Location for Your Business
- Register Your Cat Cafe with the IRS
- Open a Business Bank Account
- Get a Business Credit Card
- Get the Required Business Licenses and Permits
- Get Business Insurance for Your Cat Cafe
- Buy or Lease the Right Cat Cafe Equipment
- Develop Your Cat Cafe Marketing Materials
- Purchase and Setup the Software Needed to Run Your Cat Cafe
- Open for Business
1. Choose the Name for Your Cat Cafe
The first step to starting a cat cafe is to choose your business’ name.
This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your own cat cafe:
- Make sure the name is available. Check your desired name against trademark databases and your state’s list of registered cat cafe names to see if it’s available. Also check to see if a suitable domain name is available.
- Keep it simple. The best names are usually ones that are easy to remember, pronounce and spell.
- Think about marketing. Come up with a name that reflects the desired brand and/or focus of your cat cafe.
2. Develop Your Cat Cafe Business Plan
One of the most important steps in starting a cat cafe is to develop your cat cafe business plan. The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.
Your business plan should include the following sections:
- Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your new business.
- Company Overview – this section tells the reader about the history of your cat coffee shop and what type of cat cafe you operate. For example, are you a standard cat cafe, cat lounge, cat boarding cafe, or a cat rescue cafe?
- Industry Analysis – here you will document key information about the cat cafe industry. Conduct market research and document how big the industry is and what trends are affecting it.
- Customer Analysis – in this section, you will document who your ideal or target market are and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing products or services like the ones you will offer?
- Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
- Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.
- Product: Determine and document what products/services you will offer
- Prices: Document the prices of your products/services
- Place: Where will your business be located and how will that location help you increase sales?
- Promotions: What promotional methods will you use to attract customers to your cat cafe? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing.
- Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
- Management Team – this section details the background of your company’s management team.
- Financial Plan – finally, the financial plan answers questions including the following:
- What startup costs will you incur?
- How will your cat cafe make money?
- What are your projected sales and expenses for the next five years?
- Do you need to raise funding to launch your business?
3. Choose the Legal Structure for Your Cat Cafe
Next you need to choose a legal structure for your own cat cafe and register it and your business name with the Secretary of State in each state where you operate your business.
Below are the five most common legal structures:
1) Sole proprietorship
A sole proprietorship is a business entity in which the owner of the cat cafe and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.
2) Partnerships
A partnership is a legal structure that is popular among small business owners. It is an agreement between two or more people who want to start a cat cafe together. The partners share in the profits and losses of the business.
The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.
3) Limited Liability Company (LLC)
A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a cat cafe include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.
4) C Corporation
A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a cat cafe is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.
5) S Corporation
An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.
Once you register your cat cafe, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.
4. Secure Startup Funding for Your Cat Cafe (If Needed)
In developing your cat cafe business plan, you might have determined that you need to raise funding to launch your business.
If so, the main sources of funding for a cat cafe to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a cat cafe concept that they believe has high potential for growth.
5. Secure a Location for Your Business
When opening a cat cafe, it is important to find the right location. You’ll want to find a space that is big enough to accommodate your cafe and the cats, and that is also in a convenient location for customers. You’ll also want to make sure that the space is zoned for a business like a cat cafe.
6. Register Your Cat Cafe with the IRS
Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).
Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.
Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.
7. Open a Business Bank Account
It is important to establish a bank account in your cat cafe’s name. This process is fairly simple and involves the following steps:
- Identify and contact the bank you want to use
- Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
- Complete the bank’s application form and provide all relevant information
- Meet with a banker to discuss your business needs and establish a relationship with them
8. Get a Business Credit Card
You should get a business credit card for your cat cafe to help you separate personal and business expenses.
You can either apply for a business credit card through your bank or apply for one through a credit card company.
When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.
Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.
9. Get the Required Business Licenses and Permits
You will need a business license and a health permit from the local health department to start a cat cafe. You may also need a zoning permit depending on your location. Contact your local government to find out what other necessary permits and licenses you will need.
10. Get Business Insurance for Your Cat Cafe
There are a few different types of insurance that you may need to operate a cat cafe.
Some business insurance policies you should consider for your cat cafe include:
- General liability insurance: This covers accidents and injuries that occur on your property. It also covers damages caused by your employees or products.
- Workers’ compensation insurance: If you have employees, this type of policy works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.
- Commercial property insurance: This covers damage to your property caused by fire, theft, or vandalism.
- Business interruption insurance: This covers lost income and expenses if your business is forced to close due to a covered event.
- Professional liability insurance: This protects your business against claims of professional negligence.
Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs.
11. Buy or Lease the Right Cat Cafe Equipment
To run a cat cafe, you will need some basic equipment. This may include a coffee machine, water cooler, refrigerator, and dishwasher for the cafe. You will also need supplies for the cats such as food and water dishes, pet beds and cushions, litter boxes, and plenty of toys to keep them entertained.
12. Develop Your Cat Cafe Marketing Materials
Marketing materials will be required to attract and retain customers to your cat cafe.
The key marketing materials you will need are as follows:
- Logo: Spend some time developing a good logo for your cat cafe. Your logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your brand.
- Website: Likewise, a professional cat cafe website provides potential customers with information about the products and/or services you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you.
- Social Media Accounts: establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn and/or other social media networks will help customers and others find and interact with your cat cafe.
13. Purchase and Setup the Software Needed to Run Your Cat Cafe
There are a few pieces of software you will need to run a cat cafe. The first is a Point of Sale (POS) system, which will allow you to track sales and inventory. You’ll also need a reservation system to manage bookings, and a way to manage your cats’ health and vaccinations. Finally, you’ll need a website to promote your cafe and attract customers who love cats.
14. Open for Business
You are now ready to open your cat cafe. If you followed the steps above, you will know exactly how to start a cat cafe. Below are answers to frequently asked questions that might further help you learn how to run a cat cafe.
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How to Open a Cat Cafe FAQs
Is it hard to open a cat cafe?
No, it is not hard to open a cat cafe. You need to consider a few things, such as finding a location and setting up the cafe. Then you can begin to source cats from animal shelters or local animal rescues. You may also want to create a business plan and find investors to help get your cafe up and running.
How can I start a cat cafe with no experience?
If you're looking to start a cat cafe but don't have any experience, there are a few things you can do. First, you can research the industry and get a better understanding of what's involved. You can also look for mentors or other business owners and cat lovers who can help guide you through the process.
What type of cat cafe is most profitable?
The most profitable cat cafe is a business that is able to provide an enjoyable and comfortable environment for its customers. This type of business would need to have a variety of cats for its customers to interact with, as well as comfortable seating and fun decorations.
How much does it cost to start a cat cafe?
The cost of starting a cat cafe varies widely depending on the size and location of your business. Generally, startup costs range anywhere from $10,000 to $100,000 to get your cat cafe up and running. This amount can include purchasing or leasing the location, remodeling the space to fit your needs, marketing to attract new customers, sourcing cats, and purchasing supplies.
What are the ongoing expenses for a cat cafe?
The ongoing expenses for a cat cafe are relatively low, as the main costs are associated with the acquisition and care of the cats. The costs of food, litter boxes, and toys for the cats can be absorbed by the cafe, and most of these items can be sourced cheaply or even donated. The greatest expense is typically veterinary care, which should be budgeted for on an annual basis.
How does a cat cafe make money?
A cat cafe business makes money by charging an admission fee, and then selling food and drinks to customers. They also typically sell merchandise, such as t-shirts and coffee mugs, to help generate revenue. Some cat cafe owners also offer adoption services, which can help boost profits.
Is owning a cat cafe profitable?
Yes, owning a cat cafe can be profitable. This is because cat cafes are becoming increasingly popular, and people are willing to pay to interact with cats. In addition, there are many ways to market and advertise a cat cafe, which can help attract customers.
Why do cat cafes fail?
The most common reason for a cat cafe failing is a lack of planning and execution. For example, most businesses that fail do not have an effective business plan or they do not research the competition. Additionally, cafe owners often do not factor in the ongoing costs associated with running a cat cafe, such as food, veterinary bills, and employee salaries.
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