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"Good Horsemanship is Built on Solid Basics...So is Good Business!"

Top Ten Horse Business Concerns
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 emerge
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 24/7
proposition. The work to care for them is hard physical labor no matter what
the weather is like. Not only do the employees need to be able to handle the
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 best
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. It really
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 you
can't give lessons to your boarders if you don't have an indoor. Or if you
have a breeding stallion, you will also experience seasonal fluctuation. Or
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 that
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 these
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 to
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 this
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, and
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 needs
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 what
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 out
to the right audience, you won't be in the horse business very long. If you
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 shoes
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 go
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 their
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 bring
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 the
work themselves for a few weeks is that they use less bedding and that their
feed bill is reduced because of one consistent person doing the feed
measuring. It's not that the employees are being wasteful, rather they may
all have their own variation in bedding amounts and feed portions. If you
as the owner/manager have performed this work to establish the baseline, you
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 as
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, diet
and annual inoculations are worth the cost. Examining the horse at regular
intervals to observe any changes in condition, behavior, or soundness can
also detect a problem before it gets very far along. Beyond that, strive to
keep your horse's contact limited to other horses that you know have a clean
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 of
disease such as West Nile Virus offers an example. Until the new vaccine was
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 to
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 horses
are kept in large herds; when manure is stored in a pile for long periods of
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 steps
to develop professional programs and solutions to problems from within its
own community, rather than have those unfamiliar with the horse industry set
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 and
enjoyment takes land, and helps supply open space because of this. The
largest group of equestrians is the recreational rider, who primarily trail
rides. In the context of our entire population however, equestrians are but
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 key
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 have
operational and business records written down and in a place they can be
easily located? Who else might be able to take over for you, at least for a
short-term period? Taking good care of yourself must be a top priority, and
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 is
author of "Growing Your Horse Business" and "Bang For Your Buck: Making
$ense of Marketing For Your Horse Business." She is the 1999 AHC Van Ness
Award recipient for outstanding service to the horse industry. She can be
reached at: (603)878-1694; email at Lisa@horseconsulting.com; or visit her
website at www.horseconsulting.com)


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