Sunday, December 20, 2009

Executing A Business Plan For The Horse Industry ~ A Step-By-Step Blueprint

How many people do you know who would consider opening a craft store, or a car dealership, or even a real estate office without fully researching their potential market and coming up with a comprehensive business plan to present to investors (or the bank) before actually getting started? My guess is not many.

So why is it that a majority of folks who decide to jump into the horse industry head first choose to do so with virtually no planning whatsoever? If for no other reason than to give yourself an idea of what your expected income can (or should) be and how much capital it takes to really set yourself up for success, here are a few guidelines, some handy tips and what you should be thinking about before you get your feet wet.

First, you need to have an idea about what service(s) you will be offering to the public and be able to commit an overview to paper. Are you interested in boarding horses for others, developing a breeding program or offering training and lessons? Some combination or all or some of the above? If operating a facility that boards horses for the general public, are you interested in hiring a trainer or instructor? Come up with a thorough description of your business and highlight what you have to offer.

Another consideration you need to give some thought to is who your competition will be and how what you can or will provide excels over and above them. Do you have the ability to offer something others do not? Examples of this would be a covered or indoor arena when no other facility can boast such amenities, or enclosed wash stalls with hot running water, for instance. Also, is there a special niche you can fill that no one else in your area can claim? While these are not mandatory in order to begin operation, they can assist in leading you toward success.

Next will be how to market you business, and in the 21st Century you'll need to take a multi-faceted approach. Combining print advertising with the internet can gain your business maximum exposure, though this brings up one of my major peeves. Good advertising sources, on whole, ARE NOT FREE. That's a major problem with a variety of online outlets, there is no one to edit and send you blueline proofs of your copy.

It's all about you, so making 100% sure everything you post (every ad, any video captions, all website content, etc) is proof read for spelling, punctuation and grammatical errors is a must. In addition to a professional looking website and any additional web-based advertising you do (I recommend avoiding Craigslist...), be sure to have advertisements in print. Local newspapers, local and regionally based equestrian publications and even flyers at nearby feed and/or tack stores will be sure to garner you clientele if you have something worthwhile to offer.

Here is another thing to remember ~ word of mouth is always the very best form of advertising. 99.9% of my clients over the past ten years have been through word of mouth, even though we do regularly advertise (though not on a large scale). Your reputation is golden, treat it that way. No doubt, you will encounter those who dislike you and will seek to tarnish the reputation of your business for whatever reason, be it because you said something they perceived as wrong, because of personal or professional jealousy or any of a myriad of other rationales, however it is important to try your hardest to rise above it. You may slip up and fail to do so every once in a while. Pick yourself up, dust yourself off and go on about your business. Only YOU know who YOU are, and hopefully your clients or potential clients know you well enough to see through those who seek to damage you. Having been there (and anyone who has been in this industry for any length of time has a similar story), you can prevail!

Then you will have to address the ever-important issue of operations; plus who is in charge of each business related task and how you will go about hiring staff. Let's examine a basic boarding facility with resident trainers and instructors. A ranch or farm manager will oversee all areas and handle dealing with client complaints related to the facility itself. For additional tips, please refer to my previous installment about good barn management. All of that information should be integrated into any business plan. On complaints ~ believe me, you will have them. But you must make sure whoever you hire to be in charge of such dealings is competent and diplomatic in the utmost.

Your barn manager should be ordering feed, bedding and any of a number of other necessities. You will also need employees to feed the horses, clean the stalls and make sure there's clean, fresh water for all resident equines. Also necessary will be someone in charge of landscaping, maintenance and repairs. Then you'll need to determine if any trainers and/or riding instructors will be direct employees or independent contractors running their own business yet operating out of your farm. There are benefits and drawbacks to each approach.

Which leads us to insurance, a topic in of itself that I'll be covering in the future. Having adequate coverage is a must, including a care, custody and control policy for facilities where horses are boarded; major medical, surgical and mortality insurance for your bloodstock in a breeding operation; as well as trainers and/or riding instructors liability policies for any staff or outside businesses ~ all with an aggregate limit of not less than $1 million with you named as an additional insured for independent contractors ~ in addition to your basic farm or ranch coverage and homeowner's insurance.

Be sure to have financial data, income projections, capital outlay and expense information charted out, plus any supporting documentation that you are actively involved in organizations related to your endeavor and have the background to prove how well versed you are in the industry. These will be crucial if you seek outside investors or financing of any kind. Also, watch for an upcoming installment regarding horses, equine-related businesses and the IRS for more information as well.

Finally, know your limits and know when to consult others or ask for advice. There's certainly no shame in doing so! Best of luck, 'cause you'll need it!


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