Equine Entrepreneur 101
8 Keys to Making Your Dream Horse Business Profitable
By Tania Millen
One of the biggest challenges for equine entrepreneurs is viewing their business as a business. Many riders and horse lovers get into business as an extension of their love of horses, but a horse trainer, coach, or rider who is paid for their services is a self-employed professional. They’re operating a business just like anyone else selling goods or services.
Additionally, horse businesses often require specialty skills and knowledge. Selling, training, or boarding horses involves caring for animals. Coaching involves teaching, educating, and developing riders. Equine businesses that use horses have much higher financial outlay than businesses that don’t require horses. Also, equine businesses often provide a luxury service — not a necessity — so they may be affected by societal economics beyond their control. However, regardless of the goods or services that a horse-related business provides, it’s still a business.
Here are eight keys to making that business profitable.
Dr. Julie Cooney Fischer teaches equine business management virtual courses at University of Guelph. She also operates Meadow Mountain Ranch in Allenspark, Colorado, which offers horse camping and pack trip opportunities to Girl Guides.
1. Know Your Market
The horse industry is affected by trends, styles, and consumer whims like any other industry. Riding attire, horse blankets, and even horse breeds go in and out of fashion. Equine entrepreneurs need to figure out who will buy their products or services in the current economic climate.
“The biggest pitfalls for equine businesses are timing, location, and demographics,” says Julie Fischer, who teaches Equine Business Finance & Risk Management at Equine Guelph and lives in Allenspark, Colorado.
Timing relates to when the business starts. For example, starting a horseback riding lesson business that caters to lower income families may not be successful during periods of high unemployment.
“Assess family income and whether luxury horse-related activities [there] are within financial reach,” says Fischer. “Find out what other facilities are nearby and whether the needed resources (vet, farrier, feeds) are available. Being isolated can hurt your business. More populated areas tend to have more customers, can operate year-round, and can charge higher prices.”
You also need to know who the competition is and how your product or service will stand out. That means offering a slightly different product that satisfies the unmet needs of customers. For example, a riding coach may specialise in teaching dressage to beginner adults, but after researching the potential customer base, could find there’s a higher demand for children’s lessons in Western tack.
“I think there’s a big difference between businesses that cater to the Western and English worlds,” says Fischer. “English schooling stables in the big cities seem to be doing okay. Some rural Western tourism-based services are struggling.”
“Equine-related businesses that seem to thrive are those that sell novelty goods such as home décor and clothing — things that are trendy, but that people will wear or use in their house,” says Fischer.
Research the market, find a niche, and figure out how your business can fill it.
Related: 10 Tips to Help You Build a Better Barn Business
2. Make a Profit
It sounds obvious that a business must earn more than the costs of operating. Yet it’s easy to get caught up in “doing” without figuring out how to actually make money. If there’s no profit, then your operation is simply an expensive hobby.
“The most common businesses that I see start up and then fail are instructors teaching lessons,” says Fischer. “A lot of lesson programs go out of business due to the cost of maintaining horses.”
“If you’re researching a potential lesson program or just starting out, then start small, partner with a facility, and grow your customer base and name brand,” Fischer says. “Don’t buy five or ten horses and think that people are going to come to you quickly.”
It’s also important to determine whether you want to provide a service or sell products year-round, seasonally, part-time, full-time, or just on weekends.
“Performance horses are ridden year-round (unlike most trail and outfitter horses) so those riders have ongoing needs for farriers, feed and supplements, veterinarians, tack stores, etc.,” says Fischer.
Your standard of living, personal expenses, desired savings, and retirement plans will also affect how much profit you need to make from the business. Once you know what you need to make, then determine the volume of products or services you have to sell to be profitable. Overhead costs and sales prices will determine whether the business is viable.
3. Choose a Structure
Before registering a business, you’ll need to decide what type of business structure is best. There are four types in Canada: sole proprietorship, partnership, corporation, and cooperative. They each have advantages and disadvantages, and address liability, taxation, and record-keeping differently. Researching and understanding each structure, then speaking with a lawyer and accountant, can help with this decision.
4. Plan to Succeed
Creating a written business plan is another key to success. If you don’t need financing, the business plan can be a simple spreadsheet that summarizes costs, potential earnings, and likely profits. Planning two to five years into the future will help direct the business, attain milestones, and produce profits. If you need financing, lenders will request a more substantial business plan.
Related: 7 Steps to Better Barn Leadership
5. Names and Branding
“What’s in a name…?” William Shakespeare famously wrote in his play Romeo and Juliet.
Your business name tells potential customers what the business does, what products or services are for sale, and reflects the brand, too.
The brand on a horse’s hip visually indicates whose herd the horse belongs to. Business branding is similar. It’s a visual statement about the business, illustrating who you are and what you stand for. It’s the colours and logo on your website, social media, clothing, and barn. It’s your values, policies, and how you interact every day with horses and clients. It’s the consistent representation of your products or services so that customers know what they’ll be getting when they purchase from you. Ultimately, it sets you apart from the competition.
6. Market and Diversify
Once you’ve created a unique brand that stands out from others, it’s time to market that specialness. Marketing can range from hosting welcome events, to signage, advertising, special offers, and partnering on deals with complementary businesses. Marketing is communication. It’s the only way your business will become known to customers who can then purchase your products or services.
Our very own I Love Horses tote bag with gloves and carrots
Ensuring your business is viable in the long term can involve diversifying, too. Diversification means offering a variety of products or services so that if one doesn’t sell well, maybe another will. Essentially it spreads your sales across different items. For example, if the business provides services perhaps it can sell products as well (a lesson barn might sell branded hoodies or swag); a Western tack store may partner with a craft beer company for evenings of tasting and shopping whenever a new brew launches.
“Innovation is definitely creeping into the horse industry and people are thinking outside the box,” says Fischer.
Related: Why Advertise Your Horse Business During an Economic Slowdown?
7. Get Insurance
Insurance can protect you and your business from financial losses when things don’t go as planned. One way to determine your insurance needs is to make a list of “what ifs?”. For example, if you’re a coach, what if your student’s horse kicks a spectator at a show while you are coaching? Do you require insurance? Does your student? The facility? The show organizer? Speak with an insurance agency that is familiar with your type of business to find out. Not all agencies are familiar with horses and equine businesses, plus every agency offers different products. Call around to find the insurance you need so that you’re protected against possible “what ifs?”.
8. Embrace Change
Global changes are impacting the horse industry and business owners must consider how best to embrace them. For instance, because horsey customers are prevalent online, ensure your business has a website and is active on social media. Wearable and video technology has advanced, allowing many instructors to teach from afar. Meanwhile, boarding facilities and transportation operators can send electronic videos of client horses, to assure owners of their horse’s well-being. As sport rules relax, riders are enthusiastically embracing more interesting and elegant attire, increasing sales of fashionable tack and clothing. Finally, in the face of climate change and environmental issues equestrian businesses need to consider their environmental footprint.
Shutterstock/Boxerx & iStock/Groomee
Ultimately, small businesses drive Canada’s economy and that includes equine entrepreneurs. Over 55 percent of Canadian businesses have fewer than four employees and over 70 percent have fewer than 10 employees. Those businesses last, too.
“Over 67 percent of new businesses in Canada survive five years,” says the Business Development Bank of Canada’s website. “Ten years after opening, about 49 percent of goods-producing businesses and 44 percent of services-producing businesses are still operating.”
For new businesses, finding an unfilled niche is key, along with understanding the market and ensuring the business can actually be profitable. Fortunately, there’s lots of help available. Equine breed, coaching, and sport organizations are well-connected, so reach out to the horse community for help, then work hard to fulfill your entrepreneurial dreams.
Related: Family Farms and Ranches
Resources: Many free resources are available for start-ups and small businesses in Canada. Here are some contacts...
- Business Development Bank of Canada
- Canada’s Regional Development Agencies
- Chamber of Commerce
- Community Futures Canada
- Co-op Creator
- Equine Guelph
- Futurpreneur Canada
Related: How to Understand Horse-Related Contracts
To read more by Tania Millen on this site, click here.
Main Photo: iStock/Sasha Fox Walters