Are you planning your horse business around one of the equine businesses that you would like to have? Or do you have the equine business management skills to create one of the profitable horse businesses who service the wants and needs of potential customers in the equine community?
These three steps below will guarantee that you are able to create a profitable horse business
The First Essential in Profitable Equine Businesses
Make sure you are going to provide goods/ services that are in demand.
You may already have a horse related skill that people ask you about. If they are prepare to pay for that skill then that is a great place to start your horse business plan.
If you have lived in your district for a while then you may already know that there is a problem in the horse community. If not, then talk to people. A survey is a great place to start and it can be as informal as a conversation.
Ask specific questions – what is your biggest horse related problem, how do you think it could be solved, has anyone ever tried to solve the problem before. Remember to keep a record of each conversation and this could be a simple step like taking notes after (or during) each conversation.
The Second Step Needs Equine Business Management Skills
In this step you need to be solution orientated. If there is an easy solution then there is a very good chance that someone has already solved it, so you may need to think ‘outside the square’ or ‘outside the box’
This could involve talking to people with horses in other areas to see if they have had a similar problem and were able to solve it.
It could be that you already have the skills to provide the services required, or are prepared to acquire those skills to solve the problem. The main thing in this step is that you are able to find the solution to their problem.
The Final Step For Your Horse Business Plan
Find out how much it will cost you to solve this problem
If you are retailing goods to solve the problems then make sure there is enough profit between what people are willing to pay and what you can solve the problem for.
At this stage it is essential to include your time/labour and to calculate it at a rate you should be paid. If, for instance you are making special show brow bands then you must not only calculate the time it takes for the material but also the time it will take you (or one of your staff members) to make them.
As a general rule, the cost item of what you are producing or buying should be between 66% and 80% of the retail price. Of course this can vary and there are many instances that are outside these figures. But it is a good figure to start off. This will allow for lots of expenses like administration, marketing etc but it will also allow for discounts when you are first starting.
Say the brow bands are very specialist with specific high quality materials going into them and they cost $60. for materials and labour. If you are selling them for $100 then your business has a chance of succeeding. To get your business started, you are better off making the price $100 and discounting to $80 than to sell your product for $80.
An Important Point To Remember In Equine Business Management
Another part of the equation of having your own equine business is to know where the money is really going. If you start a hobby to pay for your riding lessons or to pay for your horse’s feed bill and you consider that an ongoing expense that that is ok.
But if you start another part of the business and think that you are not making a profit because you are spending your money on lessons or your horses feed bill then that would be wrong. You may be making money on what you are doing, but spending the profit on horse expenses that are not relevant.
This simply means that one area of your horse business is running at a profit and another area is running at a loss. When you create your horse business plans, use your equine business management skills to separate the incomes and expenses to each area of the business.
