After that first slow year, word on the street will get out, and that’s when pet sitters are able to finally fill a weekly schedule. Before you know it, you’ll be running around town like your feet were on fire and your drawers were catchin’. As you envision heaps of glimmering gold, excitement will flow like a roaring wind. Walking and sitting over 20 dogs per day verily achieves the coveted “six figure pet sitter” milestone, but this victory may be shorn of gladness without considering a few things up front.
The following story has been oversimplified to serve brevity and amplify the crucial aspects of expanding a small pet sitting business:
Eric walks 6 dogs per day and makes $120 per day or about $31,200 per year. Eric, and all his charges, are happy campers.
Later, to meet demand, Eric hires Ramone to walk an additional 6 dogs per day. Ramone makes $10 per hour, and Eric’s Pet Sitting (EPS) now reports a whopping annual revenue of $62,400. However, since he’s paying Ramone $15,600 (plus $1,872 for unemployment insurance), Eric is actually making $44,928 per year.
Doubling the number of clients has only increased the pet sitting business owner’s income by a factor of 1.4 (instead of 2). Let’s keep going anyway. I want to make more money.
Eric hires Sasha to walk 6 MORE dogs. The total annual revenue for walking 18 dogs per day becomes $93,600 but the owner’s income is only $58,000. Also, Sasha quickly figures out that she can walk the dogs herself and make $20 per walk instead of $10. She steals 6 clients and blocks my number.
This doesn’t happen with every hire, but it definitely is part of the pet sitter expansion cycle. Growing a small business is not impossible, and six figure pet sitters do exist, but they are in the minority.
Also, it is unlikely you’ll be able to hire two full time dog walkers. It will take at least 4 part-time people to walk those additional 12 dogs per day. This establishes the impetus to hire two more part-time sitters to walk the dogs you’re supposed to walk while you manage all these other walkers.
By the way, you are paying workers comp now.
Small businesses may hire employees, but another option is to hire an independent contractor (IC). The employee vs IC debate has been raging in pet sitting forums across the nation for decades.
Determining which of these is more economically viable is primarily a function of the needs of the business entity and the laws in their state.
ICs seem like the way to go, since you don’t have to manage unemployment insurance, workers compensation, health care, and paid vacation for the worker.
Unfortunately, it isn’t that simple because the IRS uses a right-to-control test to determine a business’ tax liability, and each state has tests to evaluate a person’s status under workers compensation and unemployment insurance laws.
Economic realities tests may make it more difficult to classify a worker as an independent contractor because they examine how the worker may be economically dependent upon the business. The basic differences between employees and ICs are summarized below:
-is covered by federal and state employment and labor laws
-provides name, address, SS#, tax filing status, and W-4 exemptions
-reports income using Form W-2, and reports for unemployment insurance
-earns an hourly rate or salary, and is paid on a regular schedule
An independent contractor:
-is not covered by employment and labor laws (pending right-to-control tests)
-provides name, address, taxpayer ID #, and withholding info on a W-9
-reports payments using Form 1099, and does not report unemployment insurance
-is paid pursuant to contract requirements after an invoice is processed
The Business Entity
Whether you plan on walking 6 or 60 dogs per day, a Limited Liability Company (LLC) is still the optimal entity for small businesses. A decision to add employees and expand the number of charges per day may not match your original business plan (if you have one), so that may need to be amended.
If expansion of your business means adding partners to your LLC, this will require your Operating Agreement to be amended.
If expansion of your business includes adding a business manager to the LLC (so you can spend more time walking dogs), then Part 8 of the Articles of Organization will need to be changed.
Pet sitters that walk 6 dogs per day do not walk the same 6 dogs every day. It’s at least 14 different dogs per week. Expanding to the point where you walk (or sit, feed, or taxi) 30 pets a day can feasibly correspond to 70 different households each week.
This means there are now 70 different addresses, keys, alarm codes, and owners to manage. Don’t forget about those third-party folks like teenagers, grandmas, and other unfathomable creatures that occupy client homes.
There will be a cross section of your customer base that won’t want Ramone or Sasha to walk their dog. They will want YOU to walk their dog.
Growing a small business to meet demand will increase income but the law of diminishing returns doesn’t make it easy. If becoming a manager of pet sitters is the vision you have for a small business, expansion can prove to be a hair-raising, energizing, and fulfilling development.
Whether your daily maximum is 3 or 30, client demand invariably has a way of exceeding capacity. In time, you learn the art of saying “No.” One part of letting them down easy is to offer a list of established and recommended sitters when you’re overbooked. The other part is knowing that too many dogs in your charge dilutes quality of service, and dogs always deserve the best.
Featured photo – Nitro (foreground), then from l to r: Genevieve, Poof, Ruxon, Rex, Gizmo, Remy, Millie, and Callie. Bean the yorkie was there that day too, probably sitting in my lap.