"Good Horsemanship is Built on Solid
Basics...So is Good Business!"
Top Ten Horse Business
By Lisa Derby Oden
Do you sometimes feel
all alone running your horse business? You've
discovered how difficult it can be to get away from your daily business
demands in order to connect with your peers and colleagues. You know what
you're dealing with for issues in your horse business. But what about
everybody else? Are they experiencing the same problems, or have you somehow
gone off track without realizing it?
Through a poll conducted at horse seminars, workshops and other
equine-related meetings over the last 18 months, the following issues
as the Top Ten Concerns.
1) Finding and training
employees - Horse businesses are generally labor
intensive. Those horses that we love and are so passionate about are a
proposition. The work to care for them is hard physical labor no matter
the weather is like. Not only do the employees need to be able to handle
physical labor, they also need to understand horses well enough to handle
them safely for basic care needs.
Some horse businesses resign themselves to constant turnover for these
basic labor jobs. Others understand that there may be some turnover until
that rare person comes along that is interested in working on a long-term
basis. Once that person has surfaced, these horse businesses do their
to reward them and provide incentives for keeping them. Health benefits,
vacation, and flexible work hours for emergencies are a few ideas. Providing
farm clothing (like a polo shirt or jacket with the farm logo),
transportation to shows, lessons, or use of a horse, and other continuing
education opportunities are other incentives.
2) Generating revenue
and managing the money for financial viability - Or in
other words "cash flow." You can't survive without this ability.
is the blood of your business. If all your money comes in when it's supposed
to, and that amount is more than the bills that are due, then you're golden.
But it doesn't always happen that way. There may be some months that your
business is slow - perhaps the winter months in colder climates because
can't give lessons to your boarders if you don't have an indoor. Or if
have a breeding stallion, you will also experience seasonal fluctuation.
if you own a horse facility in the southern part of the country, you could
fill it three times over in the winter, but it's a ghost town in the summer.
There may be months that your expenses spike. Do you buy your hay all
at once during the summer? Do you get a tractor-trailer load of bagged
bedding? It's easy to see how there may be some months during the year
you experience a negative cash flow, and you must be prepared for this.
Preparing a cash-flow projection will give you a leg up to seeing when
fluctuations will occur. Knowing this ahead of time, you can determine
short-term financing options, rather then be caught off guard. One method
would be to negotiate payment to the supplier on terms. Or you may decide
write yourself a short-term loan on your farm credit card. Be sure to
negotiate the lowest interest rates possible in either case.
3) Insurance - Can't
live without it, but you feel "insurance poor," and it
shapes most of what you do. You are well advised to do your homework in
arena, and find a reliable source that gives you good service. Don't ever
make assumptions about what you are covered for - always ask your agent,
ask them to put it in writing and/or show you in the policy. If you are
planning any new programs, or thinking about adding onto your services,
check with your agent before you do. You may be adding something that
additional coverage, and you will want to add that cost to your pricing.
Yes, we all know horse businesses that operate without insurance too.
Many of these businesses are able to charge less for their services because
of this. Although it may sometimes seem attractive to abandon this expense,
realistically you are accepting a very big risk. One accident could be
shuts your business down when you are unable to absorb the cost of the
loss - be it a fire or a fallen rider. And nowadays, many discerning
consumers are asking about what coverage your horse business carries.
4) Finding and keeping
customers - This relates to your marketing abilities.
If you have a good horse product or service, but you don't get the word
to the right audience, you won't be in the horse business very long. If
don't take good care of the customers you have attracted, remember that
there is always someone else out there that is willing to. To be really
successful in finding and keeping your customers, step outside of your
as the horse business owner, and step into your prospects shoes. How will
they hear about you - what publications do they read, what events do they
to, what websites do they bookmark and go to often? Then once you've gotten
a new customer treat them well by having a customer service policy for
feedback, complaints, suggestions and problem solving. According to studies,
it will cost you five times more to get a new customer than it will to
back an existing one.
5) Keeping costs down
- Be sure you know what the baseline costs are to
start out with. The following example illustrates the point. Many horse
business owners work in another career full-time and hire horse care help.
Sometimes this staff is comprised of several people that clean the stalls
and/or feed. What horse business owners have often discovered upon doing
work themselves for a few weeks is that they use less bedding and that
feed bill is reduced because of one consistent person doing the feed
measuring. It's not that the employees are being wasteful, rather they
all have their own variation in bedding amounts and feed portions. If
as the owner/manager have performed this work to establish the baseline,
can then determine if your help is heavy handed or skipping things that
shouldn't be. Utilities can also be affected in a similar manner.
Another means to keep costs down could be to buy in bulk whenever
possible. You may form an informal cooperative with other horse businesses
to split commonly used supplies. Be sure to do your homework on purchases
well. Comparison-shopping is worth your effort.
6) Horse health issues
- In the horse business, the horse is either the
product you sell or the primary tool to the service you provide. Horse
health issues are costly in two ways: the veterinarians bills may be very
expensive; and the time the horse will need off to recover means maintaining
the animal while it is not producing any income. If a health issue affects
an entire herd, the results can be devastating to your horse business.
Proactive health management habits will keep this aspect to a minimum.
Regular attention to the horse's use and fitness, worming, teeth, feet,
and annual inoculations are worth the cost. Examining the horse at regular
intervals to observe any changes in condition, behavior, or soundness
also detect a problem before it gets very far along. Beyond that, strive
keep your horse's contact limited to other horses that you know have a
bill of health.
Even with a conscious and conscientious approach to your horse's
health, there are some things that are beyond your control. The outbreak
disease such as West Nile Virus offers an example. Until the new vaccine
developed for WNV, you could take all the precautionary procedures possible,
but it was still very difficult to totally rule out your horse's exposure
mosquitoes. Another example is Mare Reproductive Loss Syndrome that the
industry experienced in early 2001.
7) Environmental concerns
and government regulations - Water quality issues
top the bill here. These relate primarily to manure management - when
are kept in large herds; when manure is stored in a pile for long periods
time and is not part of a nutrient management plan or composting operation;
when horses are pastured on wetlands areas; when horses are allowed free
access to streams and other bodies of water; when run-off from the stable
area may be a problem.
Regarding government regulations, as any industry matures, it generally
becomes more regulated. In many instances the horse industry has taken
to develop professional programs and solutions to problems from within
own community, rather than have those unfamiliar with the horse industry
our stage. Still, this is an area where our industry needs stronger
communication channels, more education, and greater participation by all.
8) Land issues, open
space, zoning - This is a growing area of concern. Our
population continues to grow, but we can't make more land. Horse keeping
enjoyment takes land, and helps supply open space because of this. The
largest group of equestrians is the recreational rider, who primarily
rides. In the context of our entire population however, equestrians are
one user group of many vying for places to ride. How to keep land available
for all uses is one issue. How all the user-groups can get along and share
the land is another issue.
Zoning issues relate largely to the whether horses can be kept on small
tracts of land, and whether they can be kept in cities. Horses have been
kept in cities for centuries for transportation and work purposes. The
to these issues lies in how the horses are managed. Land size is not as
significant as care, use and exercise, and manure management. Another
question that arises is whether stables are agricultural or commercial,
which can also impact financing, tax implications, and resale options.
9) Making payroll
- This is a subset of #2, financial viability. If you can't pay your employees,
you may be headed into a backwards spiral. Without
them, you can't take good care of the horses and the customers.
10) Personal health
- In many small businesses, the owner is chief cook and
bottle wash, wearing many hats and in some cases wearing all the hats.
Obviously, maintaining good health is crucial. Do you eat a balanced diet
and get proper exercise, sleep, and relaxation? If health becomes an issue,
the business may experience serious setbacks and even shut down as a result.
What systems do you have in place in case of a serious illness or accident?
Do you have health benefits that cover your health care costs? Do you
operational and business records written down and in a place they can
easily located? Who else might be able to take over for you, at least
short-term period? Taking good care of yourself must be a top priority,
having an alternate strategy may prevent future headaches.
(Lisa Derby Oden has
been providing business development, marketing, and
association consulting services to the horse industry since 1995. Oden
author of "Growing Your Horse Business" and "Bang For Your
$ense of Marketing For Your Horse Business." She is the 1999 AHC
Award recipient for outstanding service to the horse industry. She can
reached at: (603)878-1694; email at Lisa@horseconsulting.com;
or visit her
website at www.horseconsulting.com)