5 Tips for Riding Out the Recession

The recession has been hard on the horse industry, maybe harder than some other industries, because it relies so heavily on discretionary income. With so many people out of work that means that discretionary income has evaporated for those folks, as they scurry to keep their personal basic survival bills paid. So what can you do to minimize the impact it has on your business? As the economy continues to throw a few bucks at us all, consider the following tips to ride out this recession.

1) There are a variety of strategies that most small businesses take when the going gets tough. The first is to find ways to cut costs. You can be much more selective and strategic about which shows and clinics you choose to attend and go to half as many. This saves you gas money, accommodations, and entry fees. It also frees up more time that you can redirect in other ways. Looking to cut costs is a no-brainer and is usually the natural starting place.

2) You can look for ways to increase operational efficiency. What resources do you have that aren’t being fully utilized? For example, do you have dead time in your arena? Consider other uses for the space during those hours including uses outside of the industry. Make sure you do the research to find out if additional insurance is required to bring in another group, and if doing this truly does result in positive financial gain for you before you make the move. Other resources include your horses – are they all earning their keep? Review your horse business for quality, safety and liability issues as part of this operational audit.

3) Learn a new skill on the business side of the house. There are lots of ways to get new professional development on line these days that are low cost and sometimes free. Marketing is a good topic to explore, and getting better at marketing may increase your income as you discover how to get your message out to more people in way that encourages them to contact you. Understanding more about the financial side of the house is another great skill to add to.

4) Develop new networks. Join a new association or networking club, get involved with your local chamber of commerce, volunteer for a cause close to your heart. This broadens who you know and who knows about you.

5) Stop looking for the world to be the way it was. It isn’t going to be that way again. That was then, and this is now. See it for how it’s changing and what direction it’s heading. Adapt your business to the new direction. You’ll discover the new opportunities that are emerging if you look ahead.

As the economy continues to improve you’ll find that you’ve sat the bucks out and have quite a nice horse under you to ride into the future.

How to Get a Logo for your Horse Business

Branding, branding, branding…it’s all around us these days. Branding is certainly an important concept to understand as a horse business owner - it embodies your essence and conveys to your audience the feeling of what your business is about. Your logo is the visual representation of your brand, and must convey the feeling of your brand.

In a perfect world, you hire a graphic designer as you’re in the start-up stage of your business. You work together to develop your logo based on your vision and mission, and from your first days you have a logo to use with all your marketing materials and initiatives. Yup, in a perfect world that’s how it goes.

More often than not, businesses are started without a logo and on a shoe string budget. As much as you might want a logo, it slips down the list of priorities. There are a variety of ways you can get a logo on a shoe string budget.

1) Send out an email to your list of contacts looking for someone that does graphic design. Many people in the horse industry do more than one job to earn a living, and some do graphic design. You can then ask the graphic designers that you learn about to provide you with samples and pricing for a logo. This gives you a few proposals to compare.

2) Local colleges that offer graphic design courses often require students to work on projects. Contact them to see how you might become a student project. The logos that the students develop are usually done for no charge. If you don’t like what they come up with you are under no obligation to use it and have not spent money on it. If you do like it, you might ask the instructor if you can make a small donation, perhaps to a graphic design club at the school. You can also offer to provide a recommendation for the student which can come in handy as they look for work in the graphic design world.

3) There are some interesting options available online too. Check out www.99desgins.com. This is a crowd sourcing design service. That means that you choose how many designs you want to see based on pricing, and that many designers will submit one. You choose which one you want.

No matter which method you choose, when you have a logo design you’re interested in; show it to a few people that are your clients, colleagues, and friends. Ask them what they think. Ask them what their first impression is when they see the logo. Ask them if your logo will be easy for someone to recall and bring to mind. Ask them if the logo is “you.” You’ll be able to make changes based on their feedback so that your logo will speak to your audience and reflect you and your horse business.

Are You Listed in Google Places?

There’s so many great ways to increase your horse business exposure that are free. Of course, when I say free I mean that you don’t have to pay for them, but you will have to devote some time instead. One way is to get your horse business listed on Google Places, and in fact you may discover that it’s already there. If it’s already there, you’ll want to be sure the information is representing your business correctly. If it’s not already there, you are missing a chance at an online yellow pages of sorts. Plus, it helps to drive more traffic to your website. You can create coupons for those that find you this way, which provides you with some information about where your prospects and business is coming from. And on top of that, you can upload photos and video.

It’s really easy to either correct your listing and/or add to it, or to set it up if there isn’t one there. Follow these steps:
1) Go to www.google.com/places. Log into your account if you have one. If you don’t have one go ahead and create one. Google has lots of cool tools to use once you have an account and I’ll talk about more of these in future blogs.
2) After you’ve logged into your account or created a new one a link will appear that says “List your business.” Click on that.
3) The next piece of information Google asks for is your phone number. By filling this in, the system looks to see if it has any information on you. If it does have information it will pop up. You can correct the information that may not be right. If they don’t have you yet, fill in the information they are asking for.
4) Since Google doesn’t want just anyone signing up somebody else’s business with false information, the next thing that they do is to verify that you really are a representative of the business. They do this by giving you a PIN that you will have to enter online. You can choose one of two methods for them to send you the PIN. They can call you with it or you they can send it to you on a postcard. I did all of these steps in one sitting and chose the phone call, which came instantaneously. The postcard method will take longer.

Now you should be all set. You can create coupons for prospects and clients to download which offers another promotional tool for you. And it’s fun to go to google.com/places and enter your business name and see it pop up. Don’t expect overnight results from having listed yourself here, but do include it as one thing you can measure about your marketing and track quarterly and annually. You may find that during some seasons you have more contacts this way, which in turn can help you plan out promotions you might want to offer at different times of the year.

Is Break-Even the Most Important Question to Ask Here?

I get asked for advice all the time - after all it is the nature of my business! Recently someone contacted me out of concern for a friend. The friend has been around horses and showing all her life, and owns one horse. The friend currently has one student that she just began giving lessons. The horse that she gives the lessons on belongs to the person that owns the private farm where the she keeps her horse. She doesn’t use her own horse because it isn’t a suitable beginner mount. She is able to keep her horse at the private farm at no cost because she occasionally takes care of the farm owner's other horses. She is now considering buying a second horse with the hope that she could turn it over right away or keep it to give lessons with. She does have a buyer in mind, but not confirmed. My friend’s concern is that if she continues giving lessons, that the farm owner will not want the friend to use her horse for lessons anymore.

The person that contacted me didn’t think this sounded like a good business plan and wanted to know how many lessons her friend would have to give in order to reach break-even. Well…yikes! This situation raises several red flags for me. Break-even is not the top one either. There are lots of elements that go into deciding to buy a horse as a lesson horse in this situation. I’ll list some of them here – but I often find that once someone has decided to buy a horse that it can be very difficult to get them to change their mind – somehow they have already made an emotional commitment within themselves. They could be in love with the horse, or in love with the idea.

1) If she is going to be operating a business on this property owners land, she and the property owner should have an agreement in place first. If there isn’t an agreement, it could easily blow up and your friend will be looking for a new place for her TWO horses!

2) If this is a private farm – is anyone covered by liability insurance for the lessons your friend is giving? These days most public facilities require free lance instructors to carry their own policy in addition to what they carry as a stable. If this is a private facility – they may not carry this type of insurance at all. This is a HUGE risk for all involved.

3) To calculate break-even for buying a horse you should take into account all the operating expenses for keeping that horse, as well as business costs, for example:
a. Board
b. Veterinarian and other complementary therapists
c. Dentist
d. Farrier
e. Supplements/medicine/wormers
f. Insurance – liability and horse
g. Tack, blankets, leg wraps and other horse clothing and equipment – these are more of a one time expense, like the horse – but breakage and wear and tear should be considered
h. Phone
i. Advertising

If you calculate these expenses for a year, and then break that into how many months out of the year she can teach, it will tell you how many lessons she needs to give (based on what she charges) each month. Sometimes people aren’t able to teach in the winter – their students aren’t interested in riding then (if in northern climate – could be summer if in southern climate) and/or the instructor doesn’t have access to covered facility to make it possible, so the annual expenses need to be divided by the number of months she is actually able to teach.

There is no single answer for how many lessons she would need to give because horse keeping costs vary from region to region, and lesson fees vary some too.

These operating expenses don’t take into account the cost of the horse itself. The horse can be resold and she may get her investment back. But she may not. And in the current economy, the market is full of horses for sale at low prices as well as being given away free.

This scenario is frustrating and frightening. This person is stumbling haphazardly into a business that requires high risk management diligence. For everyone's concern, break-even is not the first question that should be asked.

Planning for Success

I am changing the name of business planning to planning for success. When I start to talk about business planning, people begin to get anxious or they glaze over. Very few get that sparkly interested look in their eye and really engage. I’ve discovered that there is a fear of business planning, mostly because business planning is foreign and unfamiliar territory. I’ll bet that when I start talking to people about planning for success, they will respond in a more open fashion, be curious and want to engage.

As part of the horse industry, I’m sure that you have encountered breeds that are misunderstood. Business planning….ummmm…..planning for success is like that too. Many people say that their plan is in their head. And what there is of it may well be, but there are usually many missing elements. Just by articulating it and getting it onto paper, you provide yourself with the opportunity to read it back to yourself and see if it makes sense to you. This gives you the chance to improve on it, before mistakes are made and bad decisions have cost you a ton of money and time. No one wakes up and says. “Today I am going to make bad business decisions.” Yet, if you don’t actively engage in business planning…..ummm….planning for success….in a committed fashion, you have elected to make ill-informed decisions that may be devastating to your business.

Another misconception is that a business plan becomes a doorstop when it’s completed, or that it gets put onto the back of a deep dark shelf somewhere never to see the light of day again. Still others think that once the plan is completed that they must follow it exactly. Neither of these is correct. A businesss plan….ummmm….plan for success…..is a living document, just as your business is a living entity of its own. Going through the process of developing a plan gives you a process to follow again in the future as you consider new products, services and markets. Reviewing your plan quarterly allows you to spot variations in your projections. This gives you the time to evaluate whether your initial assumptions were off base, and if so what else is affected as you move forward. If your initial assumptions were correct, you can determine what is needed to get back on track. And as time moves forward the environment may change in ways that couldn’t have been predicted (September 11, for example). This is a good time to redirect your plan accordingly.

Do you remember what it was like when you learned how to ride without your stirrups? At first you didn’t like it much – it made you nervous, your balance and strength weren’t very good, and you were pretty sure you’d never be able to do it. But as you practiced more, your balance and strength improved and you appreciated the solid foundation it gave you as your riding skills developed. Planning for success is like that too. After you’ve been through the process once, you’ll appreciate the new contacts and resources that have become acquainted with. You’ll also know what steps to take when you are considering complicated business decisions in the future. With a step-by-step process, you can build a solid foundation for your equine business and take the first steps towards success. For more information about business planning….ummm….planning for success, check out Demystifying Business Planning: Concept, Customer, Cash.

Sustainability - What's It All About?

The Green movement is all around us and on a regular basis we hear the words “green” and “sustainable” used interchangeably. Green evokes visions of recycling, natural products, energy efficiency and carbon footprint calculations. But my guess is that “sustainable” paints a more nebulous picture in your mind’s eye. So I saw this great diagram - thanks to Teachers: California Academy of Sciences - that provides a visual for sustainability. Basically this diagram shows what is being called the TBL – or triple bottom line. Instead of considering profit only, business sustainability also considers the human element and the planet. The diagram also included this definition of sustainability: “to meet the current needs of our global population without compromising those of future generations.”

Wow, that’s a lot to think about…having what we need now without compromising the future. It provides us with a challenge and call to action. Yup, it’s about change. The challenge and change aspects could be enough of a reason just to back-burner it all given everything else that’s already on our plates. So here’s what I’m going to do to work towards sustainability, and maybe it’s an approach that will work for you too.

Unless you have a mind that already thinks from the middle of this diagram, it could certainly be overwhelming to try to leap from the outer three areas directly into the middle. (And certainly even the profitability factor frequently needs much attention in the horse industry.) So I’m going to take it one baby step at a time and look at each element individually. I’m going to write down steps that I’ve taken already and other steps to consider. For example, I use fly predators on my property instead of insecticide systems, and also use a solar fence charger. This approach is helping me to see how I can shift my resources – not necessarily spend more – but spend what I would have in a different way. The more steps I take like this, the more it opens my awareness to other steps and to a more holistic approach. So what do you think? About sustainability, about what you’ve done working towards this. I’d love to hear about your efforts towards sustainability and other ways to approach it – please share with us here.