As a rule: if you discover any kind of growth on your pet we urgently recommend you have it checked out by Dr. Neumeister. During the exam, Dr. Neumeister will check the entire body of your pet to determine the location, number, and appearance of any growths. If the growth turns out to be a sebaceous cyst it can range from a non-serious type to a cancerous tumor. A sebaceous cyst is a small fluid-filled or semi-solid sac beneath the surface of the skin comprising of sebum and other materials such as dead cells, sweat, etc. Under no circumstances should they be squeezed.
Once diagnosed Dr. Neumeister might either perform an aspirate for biopsy or completely extract the cyst surgically in order to determine its nature. If the cyst ruptured any inflammation or infection present will be treated and then the cyst will be surgically removed.

File source: http://commons.wikimedia.org/wiki/File:Sebaceous_Cyst.jpg