How to Write a Winning Horse Business Plan
Ellen and George always dreamed of having their very own horse business. They found a property that seemed ideal for their needs, so they visited their bank to apply for a mortgage. But the first thing the banker asked for was a business plan.
If you've never owned a business before, the term "business plan" may seem foreign to you. But a good one can make the difference between success and failure, profit and loss. A business plan is vital even if you already own horse property and plan to expand its use to boarding horses and giving lessons. Without one, you may not realize the hidden costs involved in turning your hobby into a business. It takes a bit of time and thought to putting together a good business plan, but in the long run you will be glad you did.
KEY POINTS
A good business plan answers these five questions:
A good business plan answers these five questions:
1. What is the business?
2. Who are your potential clients and competitors?
3. Who will manage the business?
4. How much money do you have to invest?
5. How will you use the money you borrow?
2. Who are your potential clients and competitors?
3. Who will manage the business?
4. How much money do you have to invest?
5. How will you use the money you borrow?
Ellen and George always dreamed of having their very own horse business. They found a property that seemed ideal for their needs, so they visited their bank to apply for a mortgage. But the first thing the banker asked for was a business plan.
If you've never owned a business before, the term "business plan" may seem foreign to you. But a good one can make the difference between success and failure, profit and loss. A business plan is vital even if you already own horse property and plan to expand its use to boarding horses and giving lessons. Without one, you may not realize the hidden costs involved in turning your hobby into a business. It takes a bit of time and thought to putting together a good business plan, but in the long run you will be glad you did.
Here is a sample fictitious business plan to use when developing your own.
1. BUSINESS DESCRIPTION
Describe what industry your business is in, the size of the facility you have in mind, and the physical structures included in the facility.
Ellen and George Smith Horsemanship will be a moderately sized equestrian facility that provides horse boarding, horse training, and riding instruction services. In the horse stable, we plan to take in 10-15 boarded horses, 5-6 horses in training, and 4-5 lesson horses. Lessons will be provided in western riding (reining, barrel racing, and western pleasure) and English riding (dressage, jumping, eventing, and english pleasure).
Ellen and George Smith Horsemanship will be located at 1234 Country Lane. This property consists of 30 acres and a farmhouse. Twenty of these acres will be devoted to farmland. We plan to build a 30 stall horse barn, an indoor lighted arena, and an outdoor lighted arena. We will also fence the entire property, and cross fence to provide smaller turnout pastures for the horses. The property is a prime location, near public land (for trail riding), and only 20 minutes from the county fairgrounds.
If you've never owned a business before, the term "business plan" may seem foreign to you. But a good one can make the difference between success and failure, profit and loss. A business plan is vital even if you already own horse property and plan to expand its use to boarding horses and giving lessons. Without one, you may not realize the hidden costs involved in turning your hobby into a business. It takes a bit of time and thought to putting together a good business plan, but in the long run you will be glad you did.
Here is a sample fictitious business plan to use when developing your own.
1. BUSINESS DESCRIPTION
Describe what industry your business is in, the size of the facility you have in mind, and the physical structures included in the facility.
Ellen and George Smith Horsemanship will be a moderately sized equestrian facility that provides horse boarding, horse training, and riding instruction services. In the horse stable, we plan to take in 10-15 boarded horses, 5-6 horses in training, and 4-5 lesson horses. Lessons will be provided in western riding (reining, barrel racing, and western pleasure) and English riding (dressage, jumping, eventing, and english pleasure).
Ellen and George Smith Horsemanship will be located at 1234 Country Lane. This property consists of 30 acres and a farmhouse. Twenty of these acres will be devoted to farmland. We plan to build a 30 stall horse barn, an indoor lighted arena, and an outdoor lighted arena. We will also fence the entire property, and cross fence to provide smaller turnout pastures for the horses. The property is a prime location, near public land (for trail riding), and only 20 minutes from the county fairgrounds.
2. MARKET
Describe your targeted clientele, and give some idea how many there are in your area, and how you plan to attract them to your business.
Our clientele will be equestrians who seek a quality, well-run horse stable boarding facility and/or quality instruction and horse training in these disciplines. According the county statistics, horse ownership and equestrian sports activities are projected to grow by 10% annually in the next decade, largely due to projected growth patterns for the county itself.
Many new homeowners are attracted to this area due to its proximity to public land suitable for horseback riding, and the availability of county fairgrounds which frequently hold equestrian shows and competions.
Currently, there are 10 boarding facilities in this area, but only 3 offer the kind of services that plans to offer. This indicates that a large segment of this market will be under-served in the next few years.
Our horse business plan is to offer our boarding services at a rate that is competitive with other training and boarding facilities in the area. Breakeven analysis from our 3 year income projections indicates that this section of our business will not be highly profitable. The main source of our income is projected to be from lessons and training with George Ellen Smith. We also plan to work out an arrangement with a outside trainers to give lessons and training as independent contractors who will pay facility usage fees. This is a crucial part of our business plan.
We plan to advertise our horse business through the use of a website, Facebook page, yellow pages, and flyers at all local feed stores, tack stores, and other venues dealing with horses. Ellen Smith has been successfully blogging about her Eventing activities for three years, and has an active viewership.
3. MANAGEMENT
Describe who will manage your business, and who will deliver the services you plan to offer.
Ellen and George Smith will be the owners and general managers of the facility. Ellen is a successful Intermediate Level Event competitor with strong ties to the community. George Smith is a champion barrel racer who also has a degree in business.
Ellen and George Smith Horsemanship will be a privately owned corporation. The real assets of the business (land and building s) will be owned by Ellen and George Smith Horsemanship, LLC, and the operations of the business will be owned by Ellen and George Smith Horsemanship, Inc. (For more on the distinction between who owns the physical assets and who owns the actual business, see How To Structure Your Horse Business.>
The members of Ellen and George Smith Horsemanship, LLC will be Ellen and George Smith, who will each have 50% ownership in the LLC.
Ellen and George Smith Horsemanship, Inc., will be structured as an S corporation with the following officers: Ellen Smith, President and Secretary; George Smith, Vice President and Treasurer. Stock ownership will be divided as follows: Ellen Smith 50% and George Smith 50%. [Note: The minimum should include a President, Vice President, Secretary, and Treasurer. One person can hold more than one office.]
Other experts who will be assisting in our start up efforts and will serve as consultants on an on-going basis include the following:
<Attorney Name>, attorney, will be handling the incorporation process and will advise us in legal matters pertaining to our horse business plans as their arise.
<Insurance Agent> will be our insurance agent. Our insurance policies will include property insurance; care, custody and control liability insurance; mortality and major medical insurance for our lesson horses; crop insurance; general legal liability.
<Accountant/Bookkeeper>, will be our accountant/bookkeeper. Her office will handle payroll and tax preparation for our horse business.
<Farmer, Manager, or any other person who will be involved in the business> And example is: John Jones, tenant farmer, will take care of farming the land. He plans to rotate grass, alfalfa, and soybean crops, to bale the grass and alfalfa hay for use in our facility, and to divide the proceeds from the sale of the soybean crops with us per an agreement drawn up by our attorney.
<Feed Store Owner>, owner of Country Feed Store, will be advising us on feed concentrates and feed regimens for the horses.
<Veterinarian(s)> will be advising us on veterinary issues for horses in our horse business.
<Farrier> will be our barn farrier. He is the most respected farrier in this area.
4. FINANCES
Our requirements for start-up capital for our horse stable are detailed in the attached list. We plan to purchase the property at 1234 Country Road. <Horse Business Owners> will provide the downpayment for the commercial mortgage through the sale of their current home. They will also provide a truck and horse trailer for business use, and sufficient funds to cover initial costs of hay, feed concentrate, and bedding. They will also provide funds for fencing and farm equipment (primarily a tractor with attachments for mowing the grounds and grooming the arenas, and an ATV for use on the property.)
We are seeking financing for construction of the horse stable, arenas, and hay barn, plus a business operating line of credit. The construction of the stable, arenas, and hay barns are one-time capital expenses (and these structures will be depreciated as a business expense). Repairs to these structures and the fencing are included in our monthly cash flow projection to indicate the ongoing requirements for cash. We plan to use the line of credit to cover the initial costs of these items, and to pay back the line as income accrues from business activities.
You should attach to this horse business plan the following items:
• Personal financial statements for the main parties (e.g., Ellen and George Smith)
• A balance sheet showing the projected assets and liabilities for the business
• Projected income(loss) statements for the first 3 years
• Licenses and approvals needed from state and county government agencies showing that you can in fact use the property you plan to purchase in the way you plan to use it. Zoning boards can be very sticky when it comes to horse facilities, so be sure to do your homework here and have an attorney on board. Avoid problems with your business plans by taking special care with this step.
As you write your horse business plans, you will get a clearer, more concrete idea of what is involved in creating and running a successful horse business, so take your time with part of your venture. If you skip this step, you are likely to regret it later. But as you work on it, you will see your dream begin to take shape, becoming more real and more realizable! That is a thrilling prospect!
You can find more great articles on running a profitable horse business here.
Copyright Denise Cummins, PhD April 2016; Updated Jan 23, 2020
We plan to advertise our horse business through the use of a website, Facebook page, yellow pages, and flyers at all local feed stores, tack stores, and other venues dealing with horses. Ellen Smith has been successfully blogging about her Eventing activities for three years, and has an active viewership.
3. MANAGEMENT
Describe who will manage your business, and who will deliver the services you plan to offer.
Ellen and George Smith will be the owners and general managers of the facility. Ellen is a successful Intermediate Level Event competitor with strong ties to the community. George Smith is a champion barrel racer who also has a degree in business.
Ellen and George Smith Horsemanship will be a privately owned corporation. The real assets of the business (land and building s) will be owned by Ellen and George Smith Horsemanship, LLC, and the operations of the business will be owned by Ellen and George Smith Horsemanship, Inc. (For more on the distinction between who owns the physical assets and who owns the actual business, see How To Structure Your Horse Business.>
The members of Ellen and George Smith Horsemanship, LLC will be Ellen and George Smith, who will each have 50% ownership in the LLC.
Ellen and George Smith Horsemanship, Inc., will be structured as an S corporation with the following officers: Ellen Smith, President and Secretary; George Smith, Vice President and Treasurer. Stock ownership will be divided as follows: Ellen Smith 50% and George Smith 50%. [Note: The minimum should include a President, Vice President, Secretary, and Treasurer. One person can hold more than one office.]
Other experts who will be assisting in our start up efforts and will serve as consultants on an on-going basis include the following:
<Attorney Name>, attorney, will be handling the incorporation process and will advise us in legal matters pertaining to our horse business plans as their arise.
<Insurance Agent> will be our insurance agent. Our insurance policies will include property insurance; care, custody and control liability insurance; mortality and major medical insurance for our lesson horses; crop insurance; general legal liability.
<Accountant/Bookkeeper>, will be our accountant/bookkeeper. Her office will handle payroll and tax preparation for our horse business.
<Farmer, Manager, or any other person who will be involved in the business> And example is: John Jones, tenant farmer, will take care of farming the land. He plans to rotate grass, alfalfa, and soybean crops, to bale the grass and alfalfa hay for use in our facility, and to divide the proceeds from the sale of the soybean crops with us per an agreement drawn up by our attorney.
<Feed Store Owner>, owner of Country Feed Store, will be advising us on feed concentrates and feed regimens for the horses.
<Veterinarian(s)> will be advising us on veterinary issues for horses in our horse business.
<Farrier> will be our barn farrier. He is the most respected farrier in this area.
4. FINANCES
Our requirements for start-up capital for our horse stable are detailed in the attached list. We plan to purchase the property at 1234 Country Road. <Horse Business Owners> will provide the downpayment for the commercial mortgage through the sale of their current home. They will also provide a truck and horse trailer for business use, and sufficient funds to cover initial costs of hay, feed concentrate, and bedding. They will also provide funds for fencing and farm equipment (primarily a tractor with attachments for mowing the grounds and grooming the arenas, and an ATV for use on the property.)
We are seeking financing for construction of the horse stable, arenas, and hay barn, plus a business operating line of credit. The construction of the stable, arenas, and hay barns are one-time capital expenses (and these structures will be depreciated as a business expense). Repairs to these structures and the fencing are included in our monthly cash flow projection to indicate the ongoing requirements for cash. We plan to use the line of credit to cover the initial costs of these items, and to pay back the line as income accrues from business activities.
You should attach to this horse business plan the following items:
• Personal financial statements for the main parties (e.g., Ellen and George Smith)
• A balance sheet showing the projected assets and liabilities for the business
• Projected income(loss) statements for the first 3 years
• Licenses and approvals needed from state and county government agencies showing that you can in fact use the property you plan to purchase in the way you plan to use it. Zoning boards can be very sticky when it comes to horse facilities, so be sure to do your homework here and have an attorney on board. Avoid problems with your business plans by taking special care with this step.
As you write your horse business plans, you will get a clearer, more concrete idea of what is involved in creating and running a successful horse business, so take your time with part of your venture. If you skip this step, you are likely to regret it later. But as you work on it, you will see your dream begin to take shape, becoming more real and more realizable! That is a thrilling prospect!
You can find more great articles on running a profitable horse business here.
Copyright Denise Cummins, PhD April 2016; Updated Jan 23, 2020
Here are some excellent products that I recommend because they will make running your business a whole lot easier.
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