By Lisa Derby Oden
There are six comments that I hear often enough in the horse industry that they could be considered our industry's "urban legends".
Maybe they will come, and maybe they won't.
Whether they come or not depends on a variety of factors.
As a horse business owner, it's very important to "have vision" — meaning you can see a thriving business in the future.
It's equally important to know how to go about turning that vision into reality.
Factors to take into consideration before you build it and expect them to come include:
- Location – Will your clients have easy access to your horse business?
This can mean physical location for stables and retail establishments, or it could also mean easy access through the Internet and a Website for online business.
Maybe you'll have to get to them instead of them coming to you.
- Product/Service/Facility – What is "it" that you're building and why will "they" want it?
How is it different from all the other "its" out there?
- Target Market – Who do you think "they" (your clients) will be?
How many of these prospects are there — and most important — how many do you need to make it?
- Your Reputation – If you've started out by running your business part-time and have developed a good reputation for quality, knowledge, skill, and/or customer service, then you're better positioned for growth and building it than someone who has no industry experience, no experience running their own business, or has a checkered reputation.
- Current Market Conditions – What is the market like in general?
Fads come and go quickly in the American culture, and the horse industry mirrors that. Is the breed, performance discipline, or product you're selling in a growing market or a declining market?
The best bet is to conduct a feasibility study before you build it and expect them to come.
This will help to fine tune your vision for success, rather than setting the stage for becoming a small business failure statistic.
In the retail world, it's not unusual for a store to lure you in with a price on something that is at or below its wholesale cost.
This is a market strategy based on the concept that once you're in the store, you'll buy more, and the store will subsequently more than make up for the nominal loss incurred by this one specially-priced item.
The item being sold at or below cost is called a "loss leader".
Typically the loss leader is not a product central to the store's reason for existing, but rather an incidental item.
In the horse breeding, boarding, instruction and training business, boarding is an essential service.
It's also widely known in the horse industry that boarding is typically "break-even" at best.
That doesn't mean that there are no facilities that make money on boarding, but rather that boarding is thought of as a service that provides cash flow for the operation and keeps the lights on.
The profit is subsequently made with other revenue generators, such as lessons, training, showing, retail sales, and other services and product sales.
Losing money on boarding is not a good strategy.
It can be very difficult for a stable to compete with other stables that operate under the table, without insurance, or relying on illegal labor — but these are also not good strategies.
Make your mark by setting the bar high for professionalism within the industry and providing quality services.
You'll attract a clientele that values that. If you're losing money on boarding, it sets you up for wanting to cut corners and for treating the customers poorly.
If you're losing money on boarding, it also means that, in effect, YOU are paying part of their board — so YOU are paying your clients to keep their horse with you.
It's best to take a look at your pricing strategy as a whole.
Do your boarders have the choice of taking lessons from you, or do you require your boarders to take lessons?
Each of these strategies has its own pro's and con's — but if you're losing money on boarding and the customer is not buying anything else from you, then your pricing strategy has not been well thought out and is weak.
You can make it without business skills to start out with IF you know how important business skills are and plan to address them in some other way.
Over time your business skills will grow, just as your horsemanship skills did.
Every Olympic level rider knows their strengths and weaknesses around horses, and seeks out training to fill those gaps.
It's the same when you're running a business — you must know your business strengths and weaknesses, and seek training to develop your weaknesses or hire someone that fills the gaps.
Most horse professionals consider themselves a horseman/woman first and a business person second.
Once you go beyond being involved with horses recreationally, challenge yourself to view it the other way around.
Sure you can.
There are lots of people that do earn a living with horses.
Your best bet here is to look for role models to learn how they went about developing their career in the industry.
You'll find that there are many different paths to get there.
While you discover a career pathway, also do some soul searching to truly determine whether this is the lifestyle for you.
If you have horses on your property, they are 24/7, 365 days a year responsibility.
Perhaps you're better suited to working for someone else, though this also usually means long hours and hard work — it's the nature of the industry.
The flip side of thinking you can't earn a living is thinking that you can get rich with horses.
Here again, there is a very small percentage of people that perhaps do get rich — the odds are most likely similar to winning the lottery.
Whether you're seeking to earn a living or hoping to get rich, you'll find that they have something in common — both involve time, commitment and lots of hard work.
The IN-Box is always full, no matter what kind of business you run.
If you don't strategize, you aren't looking at your business as a whole and from a broader perspective.
If you don't strategize, you may not be keeping an eye on the industry, and an ear to the ground for what your competitors are doing.
Strategizing is a dynamic process that gives you the best shot at keeping your business viable and vibrant.
Make an appointment with yourself at least once a year to look at: your financials; the horse industry in your region, country, and worldwide; your competition; your customer needs, customer service, and customer satisfaction; and your marketing.
Give yourself some time for brainstorming.
Then create business objectives based on what you see, what you know, and where you hope to take your business.
And what if your IN-Box isn't always full?
Then, you have a different problem, and only strategizing will help you.
This is a really nice sentiment.
Maybe you can make horses more affordable for your customers.
Whether you can achieve that will depend on your business plan and business strategy.
First, you must acknowledge that there is a cost to horse ownership and care, and that varies from region to region around the country.
You may have cost advantages over your competition if you can produce your own hay, have lots of pasture, can trim and shoe the horses yourself, have access to low cost bedding, or any number of other advantages.
This is one way to keep the cost to your customers down.
Then, who are your customers? What income bracket are they in and how much discretionary income do they have to spend?
Affordable to one can be out of the question for another. And finally, what kinds of packages can you offer that break up the expense into smaller pieces?
For example, if you lease your horses by the day, 2 days, 3 days, 5 days, a week, and a month, you leave it up to the client to choose what they can afford.
Remember that your "affordable for them" strategy must also be one that generates for you what you need to keep the business going.
For Your Consideration
The great enemy of the truth is very often not the lie — deliberate, contrived and dishonest — but the myth — persistent, persuasive and unrealistic.
~ John F. Kennedy
Lisa Derby Oden is principal and owner of Blue Ribbon Consulting www.horseconsulting.com which offers business development, marketing and professional development to the horse industry.
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