Tax Saving Strategy vs. Good Business Strategy in Your Kennel Business
Many kennel owners think “saving money on taxes” is the ultimate financial win. And in the short term, that can be true — nobody wants to pay more than they have to. But here’s the catch: the same strategies that lower your tax bill often lower your reported profitability… and that can cost you big when it comes time to sell your kennel.
If your goal is long-term growth, increased profitability, and a higher valuation when you sell, it’s important to understand the difference between a tax-saving strategy and a true business growth strategy.
When “Saving on Taxes” Hurts Your Business Value
Many owners purposely lower their bottom line for tax purposes by:
• Running as many personal expenses as possible through the business.
• Inflating certain deductions to reduce taxable income.
• Delaying income to the next year.
• Accelerating expenses into the current year.
While these tactics can shrink your tax bill now, they also make your business look less profitable on paper. And when buyers (and lenders) evaluate your kennel, they base their offers and lending decisions on your reported net income — not on what “it could be” if you cleaned up the books.
The result: you save a few thousand dollars in taxes today but lose tens or hundreds of thousands in potential sale value later.
The Case for Accounting the Right Way
Buyers and banks love clean, accurate, transparent financials. When your books are prepared with proper accounting, they clearly show:
• Consistent revenue growth.
• Healthy profit margins.
• Sustainable expenses.
• A business that can support debt payments for a buyer.
This makes your kennel easier to finance, easier to sell, and worth more money. If a buyer can see profitability clearly, they can justify paying a higher price — and lenders are far more likely to approve financing.
How to Shift from “Tax Savings” to “Value Building”
1. Start at least 2–3 years before you plan to sell.
Buyers typically want to see three years of financial history. If you’ve been running aggressive tax-reduction strategies, shift to showing true profitability well in advance.
2. Clean up personal expenses.
Keep your personal spending out of business accounts. It not only improves clarity but also boosts your reported net income.
3. Track revenue and expenses accurately.
Use proper accounting software and keep service categories (boarding, grooming, daycare, training) separated so buyers can see where income is generated.
4. Show stable growth.
Consistent year-over-year increases in revenue and net income reassure buyers and lenders that the business is healthy.
5. Work with an accountant who understands your end goal.
Not all CPAs will prioritize value-building over tax savings — choose one who gets the importance of presenting strong financials for sale purposes.
The Bottom Line
There’s nothing wrong with being smart about taxes. But if your long-term plan includes selling your kennel, you have to think bigger. Reducing your taxable income may save you money this year, but it can slash the eventual sale price of your business.
A strong business strategy focuses on accurate financial reporting, growing profitability, and building a kennel that buyers can see — on paper — is worth every penny.
At Kennel Connect, we work with owners to align their accounting with their long-term goals, so when it’s time to sell, their kennel is positioned for maximum value.
