Running a profitable boarding stable is challenging. Increasing feed, grain, fuel and land costs combined with rising client expectations require stable owners to maintain a delicate balance between client satisfaction and profitability.
For stable managers, keeping the doors open can be a day-to-day struggle between the labor demands and the finances required simply to keep the facility afloat. However, a business plan can provide stable owners with guidance while allowing them to anticipate and prepare the business for change, both expected and unexpected.
“If you speak with many business owners, they will tell you they started their business without a business plan,” said Johanna Mather, instructor for Accounting, Entrepreneurship and Marketing at Hudson Valley Community College in Troy, New York. “Some will tell you that is a fine line between taking action and planning. Others will tell you that they didn’t think about planning until after they immersed themselves in the business, but it is essential to think about what the entrepreneur wants as an end result or exit strategy.”
Though most people tend to consider a business plan only at start-up, a well-crafted business plan is an important component to a business at any stage.
“A business plan forces the business owner to take a deep dive into the intricacies of running the business,” said Erin Boggan, vice president, Community Reinvestment Officer at Berkshire Bank. “This way, the business owner knows exactly what the product will be and who the targeted demographic audience [is that] he/she will serve.”
Business plans are “living documents” that can be updated and modified over time and as realities change. They take into account what you would like your stable to look like in the present day, as well as three and five years into the future. If the time is taken to correctly develop a business plan, it also outlines the path to achieving your goals. Once created, update the plan so that it truly supports your stable’s development over time.
It is easy to be overwhelmed by the details included in a formal business plan. “The best advice would be to find a mentor with entrepreneurial experience to help you,” Mather said. “Even if you use consulting services, mentors will serve you throughout the life of your business.
The most difficult part of creating a business plan is getting started. “I usually tell people to just get their idea down on paper,” Mather continued. Business plans vary in length, but typically contain similar parts. “It is important to clearly define the goals that the entrepreneur has for the business,” she added.
If you don’t have a business plan drafted for your stable, read on to learn more about the important components of any formal business plan.
Drafting a Plan
“A business plan doesn’t have to be a specific length,” Mather said. “The quality of the plan is important, and the type of business will also determine the length. Many plans are long, but say nothing.”
Every business plan opens with an Executive Summary, a concise explanation of your expectations for the stable or farm. The Executive Summary is a one-page synopsis that highlights the major points that will follow later in the business plan. This is the place where you share your goals for the operation, the disciplines that you plan to serve and the services (training, boarding, breeding, etc.) that you would like to provide.
A Company Description follows the Executive Summary. In this section, you will fully explain why you were motivated to open your stable and how you first became involved in the industry. Include any milestones or awards the stable has earned, your mission statement and the type of horse owner you plan to serve.
Essentially, the Company Description “provides information on what you do, what differentiates your business from others, and the markets your business serves,” notes the Small Business Administration website (http://www.sba.gov/content/company-description).
Next you’ll need an Industry and Market Analysis. This is especially important for new stables, but it also can make a big difference in the success of existing barns. Research the local horse market to find out how much horse owners are willing to pay, which services they are looking for and what other stables are offering; in other words, find out who your competition is and what they are doing right or wrong.
You will need to describe your client base. Are you serving recreational horse owners? Hunter/jumper competitors? Western performance riders? The rates you establish and the services rendered will be specific to each demographic.
Take the time to understand and explain how your facility will differ from others. Will you provide access to alternative therapeutic services, extra turnout, training, trails or an indoor arena? Figure out how you are different or special and include that in your business plan.
“Predict future sales for the next three years minimum,” Mather urged. “Most entrepreneurs will tell you that this is impossible, but it does give people a reality check as they usually grossly overestimate sales.”
A Marketing Plan is an important section in the business plan, as it details why clients will choose your stable over another, as well as highlighting how you plan to introduce your stable to new clients. It will include your pricing structure and plans for advertising, marketing materials, use of digital marketing tools and general promotional strategy.
Regardless of the size of your facility, a business plan will require a management team and company structure section. Within this section, explain whether you will be the sole owner and employee, or whether you will have additional owners and staff. It is also helpful to describe your stable, the amenities it includes and any equipment, such as tractors, manure spreaders, trucks, trailers, etc., that are necessary to run the business.
A formal business plan also addresses financial projections. If your stable is an established business, outline all income generated by each service offered. Expenses should be acknowledged and be inclusive of every cost associated with doing business. Provide between three and five years’ worth of information, if available, especially if you are seeking a line of credit. Income statements, balance sheets and cash flow statements for at least three to five years provide supporting documentation.
New stables, on the other hand, will prepare Prospective Financial Data, often called a Pro-forma. A pro-forma highlights anticipated expenses and income in year one, year three and year five to demonstrate growth and viability of the business.
To visualize what should be included in a pro-forma, “I usually have students close their eyes and picture walking through the front door of their business,” Mather explained. “Everything they see and touch, they have to purchase, lease, make or hire. And there is a cost associated with that.”
Close your eyes and picture the stable you plan to operate. Does the barn have heated wash stalls? Outlets in front of every stall? Will you be providing alternative therapies such as treadmills, cold compression systems or plate-vibration therapy? Each of those items and many more have associated costs. Account for those up front and consider whether there are ways to provide board or training services that can be more efficient while providing the same or better outcomes.
“Make sure that your projections match your funding requests; creditors will be on the lookout for inconsistencies. It’s much better if you catch mistakes before they do,” notes the Small Business Association (http://www.sba.gov/content/financials).
Securing funding for first-time businesses is difficult in our present economic times. “However, a solid business plan highlights the consumer need for the product and the opportunity for this business to have a monetary significance when considering the supply and demand of the current market,” Boggan said.
An appendix is not required, but it is an ideal place to attach additional information such as photos of your facility, snapshots of your website or other marketing materials, contracts for boarding, training or a lesson program, insurance, letters of reference and any awards or recognition your stable may have achieved.
Your business plan is just that, a plan; it is a road map designed to help you achieve your goals. It was created by you and can be changed by you if you think it needs adjusting. “It will never play out exactly as you have planned; even though you plan a straight path, it ends up looking more like a zigzag,” Mather said. “You have to try implementing your plan to see what works and what doesn’t, and keep changing accordingly. Sometimes your biggest failures later become lessons for your greatest successes.”
If your head is spinning from the details required in a business plan, don’t despair; you’re not alone. Fortunately, there are numerous resources available to help you get started. Use one or several of the free or low-cost resources listed below:
The U.S. Small Business Administration (www.sba.gov) provides detailed information and support for new and existing small business owners, also offering templates to help you begin your business plan.
SCORE (www.score.org) is a non-profit association dedicated to helping small businesses get off the ground, grow and achieve their goals through education and mentorship. The website provides advice and templates for drafting your first business plan.
Local Chambers of Commerce provide excellent advice on getting a business plan drafted.
Local community colleges with an entrepreneur or business program can also provide resources. The Ice House Entrepreneurial Program (http://www.kauffman.org/what-we-do/programs/entrepreneurship/ice-house-entrepreneurship-program) makes resources easily accessible on its website.
Entrepreneur Magazine’s website (http://www.entrepreneur.com/magazine) provides free access to a wealth of knowledge. Simply enter “Business Plans” in the search bar and advice on how to create a business plan, what information to include and templates for getting started are available at no charge.