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January 04, 2023 - BY Admin

Horses - turning a life sentence into a lifestyle

The horse industry is notorious for not making a profit, and you'll hear many people tell you (jokingly, but also seriously) that there's no money to be made in the horse business.

This sentiment is almost used as a source of pride by old-school trainers and horse dealers to demonstrate that their extreme dedication and hard work is all for the love of horses, not money. But, let's face it, the horse world is awash with cash! So, where is all that cash going?

There is no denying that running a business in the horse industry is difficult. The bills are exorbitant, days are typically long, and you are building businesses around live animals and thinking, feeling humans who dedicate their lives to those animals, so many things are unpredictable and curveballs are common.

However, ask anyone who works outside of the horse world in startups, technology, innovation, healthcare, non-profits, solopreneurs, or entrepreneurs... They'll all tell you that it's the same in every industry, just with a different landscape.

Horse business opportunities have vastly expanded from what was previously available, and there is now more opportunity than ever to build a career or business in the equestrian space—and, yes, to make a profit doing it.

Money can and should be made in your equestrian business, just like it can and should be made in any other business. While we're here for the love of it, if you're running a business, you should aim to make a profit. Even if you have a small equestrian side hustle, you should treat it as a legitimate business. We need to start changing the horse world's culture and making profit a normal part of the horse business.

What's more, guess what? We can do so while remaining supportive, inclusive, and transparent to members of our equestrian community.

You don't have to completely change your business model; simply approach your money and finances as a successful business owner, entrepreneur, or executive would. You can make a profit in your equestrian business if you manage your money properly, plan strategically, and adjust when necessary.

In the end, efficiency & financial operations are critical in any business. Money influences every aspect of a business, from how you serve your customers to how you grow internally. Because there is both a stigma associated with making money as an equine professional and an abundance of money in other areas, we are culturally not approaching pricing, profit, and money management in the same way that other industries are.

Profit is frequently elusive in the horse industry because we rarely price based on actual data and do not manage our equestrian businesses' money strategically.

Before your sales, regardless of the niche of the horse world you operate your business in, begin to make you money, it's critical to understand your baseline: the amount of money needed to cover the bills and keep you out of "the red."

You must also understand your customer, the market gap you are filling, your competitors' pricing structures, and test out different pricing models to gather information on how your target customer operates.

By pricing based on real, hard data, you can ensure that you're creating a funneling system for your business income that leads to measurable profit, rather than just money flowing in and out at random. This process begins with recording all of your expenses over a period of months so that you can begin to recognize and analyze patterns and arrive at as accurate averages as possible.

Before you can strategize, you must first gather information that will serve as the framework for your strategy.

Before you set your pricing, consider the following:

  • What are your start-up expenses?
  • In the current state of your business, what are your ongoing monthly expenses?
  • What will your monthly expenses be if and when your business grows?
  • Who do you want to collaborate with? What are their earnings and spending patterns?
  • How much tax do you anticipate paying now? What happens when you scale?
  • How does your current or planned pricing compare to that of your competitors?
  • How frequently do you want to work?
  • What kind of lifestyle does your business need to support for you?
  • How much money do you want/need to reinvest in the business each month?
  • Once you've gathered this information and thoughtfully answered these questions, set your prices and run experiments to see how those prices perform, then adjust accordingly.

Top tip -  Don't be afraid to charge what you're worth and the value of your service. As long as you are going about your work efficiently and effectively, then your charges are definitely worth it!

Like many business operators, a lot of equestrians underprice themselves in order to attract customers. Not only do ultra-low prices often turn customers away (there is some psychology behind associating low cost with low value), but they also frequently set you up for a situation where the only way to make a profit is to work more and harder, which is neither sustainable nor typically profitable.

Begin by analyzing expenses and developing pricing and business structures that will break even and cover expenses. This is critical if you do not have other sources of income. Bills must be paid. Then, you must include a buffer in your pricing to a) contribute to profit and b) adequately compensate you and your company for the value you bring to the table.

You want to make sure that your pricing and structure are set up in such a way that you and your business can actually handle the number of customers or clients required to turn a profit, without having to take on so much that it runs your business into the ground, exhausts and overworks you, and prevents you from ever being able to scale.

Once you've decided how you're going to make money and how you're going to price your products or services, the hardest but most important part begins: actually managing that money. Horse people are notoriously bad at this; perhaps it's because we've had to turn off that logical, frugal side of our brains so we don't go insane, or perhaps it's because many of us learned our trades in barns rather than business schools.

Regardless of how unpleasant it may be, managing money in your business is just as important as bringing in money in the first place.

Everyone despises it, but it must be done. Bookkeeping is your company's financial storybook. It contains the answers to many of the questions that equestrian entrepreneurs have like:

  • How much money do I make?
  • Can I pay myself / raise myself?
  • Which invoices have clients not yet paid?
  • Is it true that I have paid all of my bills?
  • Do I have to raise my prices?
  • Which services generate the most revenue?
  • Where am I wasting my money?
  • Are there more effective ways of achieving what I am doing?
  • Can I afford to go to the horse show?

Many equestrian entrepreneurs and small businesses owners don't avoid money management because they're lazy or don't know how. They avoid it because they believe it is frightening. The time commitment and risk of messing it up keep them from starting and finishing it, and it can also be intimidating to face where they're losing money and falling short.

Get rid of the spook in all things accounting, computer and online technology. They are the biggest barriers to succes as a small business. Educate yourself on what you need to do and why it is necessary. Empower yourself to believe that you are deserving of money and that you can manage it properly.

Here are a few pointers to help you get started on your money management (and profit!) journey:

  1. Learn about what is included in bookkeeping and why. Spend time researching on your own, purchasing a digital course, or working with a bookkeeping coach.
  2. Introduce an accounting system to your company. There are numerous options.
  3. In the operating system, automate as much as possible. The less work you have to do, the more likely it is that you will keep on top of your business.
  4. If you take bookings or appointments - make sure it is automated. Doing this sort of work manually is a huge waste of your limited time. Online systems are affordable and effective, so don't be spending hours and hours of your time each month managing the mundane as that is the quickest way to undervalue your time.
  5. To save for taxes, open an additional savings account with your business bank.
  6. Make a monthly plan to sit down and keep on top of your office work. Schedule some time off, grab some snacks, light a candle, and spend a couple hours recording your income, expenses, and digitizing those receipts, organising your online presence, streamlining your business operatiions.

Most importantly, remember that our first riding lesson did not teach us to jump, piaffe, or slide stop. Your business management journeys are similar. Before you can scale and grow, you must first research, learn, and collect data to lay the groundwork. Growth is frequently unpleasant, and as the CEO (Chief Equestrian Officer!) of your equestrian business, you must gradually become comfortable with being uncomfortable in your business, just as you are when working toward your riding goals in the saddle.

You can make money with horses and make a profit doing something you enjoy in the equestrian world. It is entirely possible if you have the proper tools, education, and strategy.