Horse business management is not possible without business operations management. Business operations management is the important functions of managing your horse business resources and optimizing your use of cash. Business operations are concerned with overseeing and controlling the process of:
• Purchasing and managing your business’s supplies;
• Maintaining and managing your business assets such as your equipment, vehicles and buildings;
• Administering and managing your employees, and tracking their job assignments.
Business operations management involves the responsibility of ensuring that your business operations are efficient in terms of using as few resources as needed, consequently minimizing you use of cash, and effective in terms of meeting your business’s operating requirements.
You might be asking, why be concerned with tracking and managing my supplies? After all, I can go count my bales of hay, bags of grain, vaccination vaccines, breeding supplies, etc. – And you can, if you have nothing else to do with your valuable time. Why not let your management system manage and track your supplies while you do something to improve your business that your management system can’t do.
Unfortunately, most people don’t associate their supplies with their cash flow or their supplies consumption cycle and shelf life. Having the ability to make sure you always have what you need, when you need it, but never too much, not only optimizes your use of cash, but ensures that your vaccines haven’t expired, or your feed hasn’t lost its nutritional value, or you have enough breeding supplies when you need them.
If your business uses its vehicles to haul horses, it is critical that you know your vehicle’s fuel, maintenance, repair and depreciation cost per mile or kilometer so that you’re pricing your hauling competitively, but still profitable. Charging what the ‘other guy’ does, does make your price equal, but not necessarily profitable or the hauling business of choice in a competitive market. Knowing your cost not only enables you to use horse hauling as a worthwhile source of cash and profit, it also allows you to price your hauling more competitively, thus giving you the opportunity to get more business than a competitor and still make money.
If you only use your vehicles within your business, knowing a vehicle’s cost is just as important. It helps you make the best decision when selecting a vehicle for doing a particular task. Knowing a vehicles cost helps you make efficient and effective vehicle decisions.
If your business has employees or contractors; administering, reporting, managing and tracking their contribution is an operations function that can be both time consuming and expensive, but necessary. A horse business management system will assist you with managing their employment status, their cost to your business and their work assignments so that you know how efficient they are and how effective their contribution is to your business.
I am sure you can think of many more examples were business operations management assists you in making good business decisions. In any type of horse business the majority of its cash is consumed in purchasing, managing and maintaining its supplies and assets, and covering the cost of its employees.
When a business needs to reduce its costs, it is best to look at reducing its operating cost before reducing its sales and marketing expense. Cutting back on your sales and marketing effort without reducing your operating costs will generally only reduce your revenue and create a bigger cash flow and profit problem. Good business operations management enables you to know your operating costs and know where you can be more efficient and effective using your business’s resources. The same sales volume with reduced operating cost equals more profit and better cash flow. Successful horse business management always includes business operations management.
‘Profit is an accounting opinion, cash is fact’.
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Happy Trails, Good Management and Business Discipline Always!
Bob Valentine, Ph.D.
President
GenieCo, Inc.
Box 271924
Ft. Collins, CO 80527
970.682.2645 or 970.231.1455
bob@genieatwork.com
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