Horse Business Management
Operating a successful horse business is a laborious task by any measure. Not only are the days long and the work hard, but the ever increasing cost in an unpredictable market only adds to the difficulty and risk.
A horse business, like any many other businesses, comes down to three simple principles.
- Marketing and Sales: No customers, no business.
- Income and Expenses: It’s not what you make, it’s what you keep.
- Business Management: If you can’t measure it, you can’t manage it.
Most horse businesses start from a love affair with horses. That isn’t a bad thing as long as you don’t let your heart dominate your business decisions. Most horse businesses require putting in long hard days. Often the only reward is the nicker when you walk by a stall or the peaceful munching of hay when you turn out the barn lights after a hard day’s work.
If you are in any business there are an incredible number of things to think about and a horse business is no different. In fact, there are far too many to list. One of the most important initial business decisions you will make is selecting a horse business management system. And yes, you do need one! There is just too much at stake to try and manage your business using scraps of paper, depending on your memory or only using an accounting system like QuickBooks. You need a management system that not only helps you manage your business, but also helps you measure it by providing the information you need to make good business decisions. A good management system will become a trusted assistant and help improve your business acumen.
Unfortunately, many business owners confuse an accounting system, like QuickBooks, with business management. Accounting software is not management. It is only recording your financial history. It is equivalent to riding your horse backwards. You know where you have been, but you have no idea where you are going! There is a lot more to managing a business than just recording expenses and sending out invoices. There are many products advertised as horse business management that only keep records. By definition, recordkeeping records an activity or task. There is no mention of management in a recordkeeping definition. If you select a recordkeeping system you will need to purchase additional software, or use multiple spreadsheets to manage your business. There are many advantages to using a business management system that includes your financials and financial analysis that cannot be achieved using a recordkeeping system.
Because a recordkeeping system doesn’t connect your financials, you are subjected to the ‘Checkbook Management’ trap. Running your business out of your checkbook is a path to going out of business – unless of course, you have an infinite source of funds. You might have checks, but just having checks doesn’t tell you if you have the cash to meet your next payroll, or make your next horse trailer payment, or purchase the feed you will need in two weeks.
There are some recordkeeping systems that include invoicing, but they are still missing the financial connection. Without the financial connection you cannot easily connect an invoice with managing of the money you receive, or your business’s operating margins and profitability. You are unable to easily manage or analyze your income sources for breakeven or ways to increase your profitability. You are unable to easily manage or analyze your customer’s receivables and any past due amounts without additional expenditure of your valuable time – and time is money. The true cost of using a recordkeeping system instead of a management system is not in its purchase price, it is its cost of ownership.
A smartphone App might appear convenient, but is really no more efficient than writing it on a piece of paper. It adds too many additional steps in the management, accounting and analysis process. A smartphone App is really just a more expensive scrap of paper. I can see no advantage to keying in information instead of using a pencil. Both methods need to be entered into additional software programs for your accounting, financial management and business analysis. The ideal solution is a management system that operates on a remote device that connects to your management system’s database. Then you are ‘one and done’! clientGenie meets that requirement when networked to your equineGenie database.
Believe it or not, your horse business management system has a lot do with your business’s degree of success or failure. Selecting the ‘right’ horse business management system can assist you in making good business decisions while minimizing your information entry process. It does this by providing you with up-to-date information that is analyzed based on the intersection and the interaction between your many business activities, tasks, income and expense all in one management system.
‘If you can’t measure it, you can’t manage it’
This isn’t just a nice cliché, it is a fact! The right horse business management system will organize your business so that it can be measured, thus allowing you to manage your business’s finances, horse care, business operations, inventory and customers and their intersections and interactions. You won’t have to purchase additional software. You won’t have to enter your information more than once. The ‘right’ horse business management system will save you time and money. You will have the information you need in a single system that will provide you with intelligent reports that will assist you in making good business decisions. Getting organized is easy. Organizing and managing your horse business requires a ‘real’ management system.
The majority of horse businesses are service businesses – boarding stables, equestrian centers, training facilities, or a combination. I haven’t forgotten horse breeders – I am one. Horse breeders are essential to all horse businesses – no horses, no horse businesses. But, they are not a service business. They are a manufacturing business. I wouldn’t say a horse breeding business is any more or less difficult to operate, but it does have its own market and operating challenges. A simple example is cash flow. Cash flow in a horse boarding business or a horse training business is much more predictable than it is in a breeding business. Cash planning and the use of cash are important in both businesses, but critical in a breeding business because of random sales. Cash is king in all horse businesses! A ‘real’ management system will help you manage your cash!
In many horse businesses the last thing on a business owner’s mind is business management. Unfortunately, this is the norm in the world of horses – and you know I am right. I have taught equine business at Colorado State University and I have seen it all and heard all the excuses. I say, business management should be at the top, and maybe the first thing. Why? Because business isn’t about having fun, it is about having fun making money. Business success isn’t about the easy decisions; it is about the difficult decisions. If you want to attract more customers, or improve your facility, or get another lesson horse it takes money. If you don’t have a good business management system you probably don’t have a clue as to the demands on cash, or even if you have enough cash. Accounting systems only record financial transactions. They don’t manage and therefore, they don’t assist you in making good business decisions without a lot of external analysis. I have never seen an accounting system that tells you how much it cost to keep an individual horse without using additional spreadsheets. A good business management system will do your accounting and tell you how much it cost to keep that horse without you having to leave the system or spend any additional time. I wince when I hear horse business owners tell me they just give their information to their accountant. Then I wince again when they tell me they only need to keep track of vaccinations and the farrier. At the risk of generalizing, their accountant is probably afraid of horses, never mucked a stall and doesn’t have a clue about running a horse business. But, they can make financial transactions add up and balance. I am still not sure what value that adds to your business. Running your horse business with an accounting system is ‘Checkbook Management’ – I’ve got checks, I must have money. You need a good business management system that does your accounting and assists you in making good business decisions! You should know your business better than anyone else and therefore, you should know how to run it better than anyone else. You just need a business management system that frees up your time so you can do what you do best.
I have often heard that if we were bigger we could compete with the ‘big guys’. This is an unsubstantiated myth and often an excuse. Bigger has its own set of business challenges. Stop and think about the overhead, variable cost and inefficiencies the ‘big guys’ have to deal with every day. To compete with the ‘big guy’ you only have to be better, and being smaller makes it easier to be better. Granted, you have to have enough cash positive revenue to cover your overhead.
There are many successful ‘boutique’ horse businesses. Small gives you the opportunity to be unique and attract the cliental that are willing to pay for unique and special treatment. If you are small you can utilize your assets more efficiently, control your overhead better and pay more attention to your customers. A business management system will let you know how your overhead is affected and any change in your breakeven if you add another horse or lose a customer. Think about this, what if you add a horse and have to add additional barn help, but you only need 25% more barn help. Unfortunately, people don’t come in 25% slices. A business management system will help you make the right decision. Do you have your barn help work a little overtime at a higher wage and reduce your operating margin or do you add the additional barn help and add some additional services to generate more revenue to cover the added expense at your current operating margin? Bigger isn’t better, best is better!
I don’t mean to imply that running a horse business is easy and a good business management system will solve all your problems, but it will help. Believe me I know running a horse business isn’t easy. There is nothing like a ‘MBA in horse business by baptism by fire’. A well respected horse friend of mine told me once, ‘there is nothing like hanging to sharpen the mind’.
Underlying the success of any horse business and the management system you chose is your commitment to keep your system current and use the information it provides to assist you in making good business decisions. Believe me; you need a horse business management system! But, purchasing one if you do not have the ‘business discipline’ to keep it current and use it is a bad business decision, and not the fault of the management system!
equineGenie offers four horse business management solutions: equineGenie Stable; equineGenie Trainer; equineGenie Breeder and equineGenie Pro. Each management solution networks to a supporting product, clientGenie, so you can use your equineGenie management system remotely, anywhere in the world. Each management system includes everything necessary to manage and measure your business’s financials, business operations, inventory, customers, security, reminder and networking. The horse management in each solution is tailored to specific types of horse businesses. The following is a link to a digital ‘flip book’ that lets you know what is included in each equineGenie horse business solution.
https://drive.google.com/file/d/1-IV8B7Q_bind2m5LxPVBr32pGshSUiN4/view?usp=sharing
It is a downloadable (.exe) file. Google Drive and your computer may display warnings. Accept the warnings and download the file anyways. It is a safe file. The attached link will help with the warnings so you can download and open the equineGenie digital flipbook (.exe) file.
https://drive.google.com/file/d/1-KE0wipFkvPC8TWZb3NTzxDZf6ykv12H/view?usp=sharing
The flipbook cannot be opened on a smartphone. It needs to be opened and viewed on your computer.
Happy Trails, Good Management and Business Discipline Always!
Bob Valentine, PhD
GenieCo, Inc.
Box 271924
Ft. Collins, CO 80527
970.682.2645
bob@genieatwork.com
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