Posted: 6th April 2017 | Back to news feed
For many of you horses are a hobby, whilst others have a dream of living and breathing horses, turning a hobby into a business. It’s certainly a noble thing to look to launch a future born of a passion, but are you really ready to take on the challenge?
Paul and Jenny had kept horses at livery for years and recently found a small yard that was up for rent. They had a plan to run a small livery service specializing in very high end care so they made an appointment to visit the bank manager to discuss a loan.
“Do you have a business plan I can look over he said”
If you’ve never owned or run a business then the idea of having to document your ideas may seem alien to you, but it could be the difference between profit and loss for any new startup.
The business plan is crucial and forces you to structure your ideas and figures that may not always seem obvious in your head. It’s not worth rushing the plan as this is the foundation of your business.
So where do you start
1) An Executive Summary is the part of the document that puts all the key points into a succinct list defining:
- The general idea, be it a short description of the product or service
- The definition of your target audience
- Costings, for both the startup and ongoing running expenses
- The company structure outlining roles of all persons involved
- The type of business model, be it Sole Trader, Limited Company etc.
We would recommend making this about half a page long as it is really a quick insight into the project.
2) A more detailed business description
This part of your business plan should go into more detail about the project. As an example you may want to highlight how your project fits into the current equine sector, so let’s say you are starting a livery yard: talk about the current service providers in your area and how your project will compete and differ. Show facts to highlight demand.
You’ll also want to talk about the business structure such as Sole Trader or Ltd company etc. Give reasons for your choice along with more detailed information about those persons also involved in the business with you and their experience.
3) Demand and market plans
Now you can talk about your market research to show there is a demand for your services or product. This should be backed up by researched figures and survey data. This needs to be accurate and not based on your mates assumptions.
How will you position your business compared to already established companies offering what you do. A difference analysis is one way of looking at it.
4) Competitor analysis
Identify some of your main competitor’s and describe their strengths and weaknesses. After listing these for each competitor, make a final summary and show how you would address your business to take on the positives and overcome those listed weaknesses.
5) A complete development plan
This is your complete pathway to launch. It will include timescales and costings for any works needed to be done along external supplier details.
As you start developing this staged listing you will find you need to make amends so I would suggest a regular review of it and make sure you speak to suppliers over and over again – don’t just think it’s gonna be ok.
The secondary part to any development plan is a risk assessment , so covering the what I scenarios. This is much harder, especially if you haven’t worked in this way before so getting help from an experienced small business coach is invaluable.
6) Management, operations and assets
Let’s now list out the team and their roles within the business. These roles need to be clear and show that the business is sustainable on that staffing level.
You’ll need to show the running costs of those staff members and that there is money available to launch the project.
We also like to see costings shown for the purchase of any major assets that are needed such as tractors, showjumps, a portacabin etc.
7) Financial statements
This is where it all comes down to figures. Let’s be honest, nothing runs without money and this is a business so every penny counts.
You’re going to need to produce:
- Income statement
- Cash flow statement
- Balance sheet
Obviously, these initial statements are merely projections, so be as accurate as possible based on your research and long thought out calculations. Do not just throw some exciting big numbers on paper.
As your business starts to take shape, you’ll continue to produce income and cash flow statements every month along with an annual balance sheet per annum.
- Income statement: shows your ability to make revenue
- Cash flow statement: is the difference between your income and expenses. It’s a clear indicator that you may be overspending or needing to increase your customer base
- Balance sheet: is the culmination of everything and I would recommend you use a good accountant who can advise on all parts of the business cycle
There’s a lot of help out there
Knowing about horses is a good start but is not going to make you an overnight success. Knowing about business is invaluable and the key to surviving those very early years as you establish your brand.
I would suggest to anyone starting out to get professional help, from either an accountant who can offer business advice or a mentor or business support network.
Stable Management https://www.stable-management.co.uk has helped Riding Centres around the world to grow for since 2004. We offer a range of services as well as access to our combined network of specialists who can support your business on any level.
The Equestrian Index newsfeed is compiled from articles submitted by advertising members and expresses the opinions of those members. Watsons Directories Ltd shall not be held liable for any inaccuracies or mis-statements therein.