CHICAGO (TheStreet) -- If dogs are man's best friend, then it's only right that they get the V.I.P treatment. After all, you're not going to skimp on your closest pal's quality of life, are you?
It's that kind of thinking that has spurred steady growth in the pet industry. According to a recent survey by the American Pet Products Association, 62% of American households own at least one pet. Last year $48 billion was spent on pets, a figure that includes food, veterinarian visits, toys, grooming supplies, doggie day care and other services.
While large chain stores such as PetSmart (Stock Quote: PETM) dominate pet food sales, the growing pet services sector is largely a small-business stronghold. Big-box retailers such as Petco have expanded into grooming services and training classes, but many pet-focused businesses thrive because of their more personal, individualized customer service. And there's only going to be more demand.
In part, increased spending on pet services relates to medical care; the American Pet Products Association estimates that pet owners will spend $12 billion on veterinary care this year, compared with $8 billion five years ago. Vets are offering more specialized medical treatments and owners are willing to pay for it out of pocket. Not long ago, a cancer diagnosis meant a dog or cat was put down; now they can be treated with radiation and chemotherapy.
But even when you separate out medical costs, demand for other services is on the rise. American pet owners are spending more than ever on training, grooming, boarding and pet-sitting, although exact numbers are difficult to pinpoint. According to market research firm Packaged Facts, spending on non-vet services grew an average of 5% a year between 2006 and last year, reaching $6.1 billion. The American Pet Products Association estimates that $3.5 billion was spent on nonmedical services last year, but also expects continued growth in the sector.
Small businesses are poised to take advantage. Despite the sluggish economy, some pet-focused service companies have even been expanding. Take Dogtopia, a modern take on the traditional kennel, where Fido and Rover can stop in for a spa-like grooming session or stay for a "boarding vacation" while webcams allow anxious owners to check in. The first location opened in 2002 in Tyson's Corner, Va.; it has since become a franchise, with 23 locations across the country.
Paradise 4 Paws, a "premier resort" for cats and dogs near O'Hare Airport for the convenience of frequent business travelers, opened in 2008. Dogs can frolic in the indoor, bone-shaped pool, relax with a massage or enjoy special pampering from the on-site concierge; cats can explore the climbing trees in their own "Adventure Jungle." The O'Hare location opened in 2008, and another will be coming this year to the Dallas-Fort Worth airport.
Mark Van Wye, COO of Zoom Room, a rapidly expanding dog-training franchise, has seen firsthand how offering the right services in the right way can pay off big, even during tough economic times. Zoom Room locations offer a range of classes, from Puppy Preschool to agility training on custom-designed obstacle courses.
"Agility training is fun, and it's something any dog can do," says Van Wye, who started the company with his wife Jamie, an experienced dog trainer. "It cements how well you communicate with your dog. Our motto is, 'We don't train dogs, we train the people who love them.'"
Catering to those people means offering extras such as free coffee and Wi-Fi, as well as kids' rooms where little ones can play while mom or dad takes the family dog for a run around the indoor dog park. A retail store offers solution-based, affordable pet products and you can even book a Doggy Disco birthday party.
Zoom Room started in 2007 in Culver City, Calif., and began franchising in 2009. There are 10 locations, with three more opening in next two weeks.
"When the rest of corporate America was contracting, we chose to expand," Van Wye says. Laid-off or burned-out workers were looking for new opportunities, and prime real estate could be grabbed at bargain prices. "We got some incredible franchise candidates, the real cream of the crop," he says.
Luxury may have been the buzz word in the pet world a few years ago, but now the key is value. If you can show pet owners your service pays off in better behavior or a happier pet, you'll build a loyal clientele. In the world of pet services, personal and local is a big selling point.