So you want to start a horse business? That is great news! There are tons of successful businesses in the equine industry. First thing is first. You need to decide on a specialty and figure out how you will get started financially. Will you go at it alone, or with a partner? What kind of liability do you need? Below are the types of companies that you can have, along with the advantages and disadvantages.
Advantages and disadvantages of the 6 types of business:
Sole Proprietorship
Advantages: Easiest, losses may be deducted from personal income, least expensive
Disadvantages: Owner has unlimited liability, no protection from a company, raising capital can be difficult.
General partnership:
Advantages: Shared expenses, each partner has equal say in management decisions, losses may still be deducted from personal income.
Disadvantages: Each partner has unlimited liability for the partnership, must file separate tax return, must contribute, borrow or raise capital.
Limited Partnership
Advantages: Shared expenses, limited partners have limited liability, losses may be deducted from personal income.
Disadvantages: Passive loss limitations, limited partners have no management control, must file a separate tax return, partners must contribute or borrow to raise capital.
Regular Corporation
Advantages: Lower income tax rates, ability to raise capital through shares, shareholders have limited personal liability.
Disadvantages Losses may not be deducted from personal income, the corporation must file a separate tax return.
S Corporation
Advantages: Losses can be deducted from personal income, can raise capital through issuance of shares, only a limited personal liability.
Disadvantages: Most complicated form, corporation must file a separate tax return.
Syndicate
Advantages: Risks and expenses are shared.
Disadvantages: Complex taxes.
8 guidelines needed to have a successful horse business.
-Have a business plan, the time taken to create a good plan will pay off.
-Make sure to have enough financial reserve or backing.
-Learn as much as you can about your proposed business. If you are going to give lesson, have a certification and be a good instructor. If you want to breed, learn about genetics, defects and understand areas of concern.
- Asses the industry climate. Don't put a rodeo across the street from a successful rodeo. Know why your company will be better than competitors.
- Build a reputation. Having a good image is important to continue business.
- Get as much help as you can from other professionals. Talk to others in the business and learn from them
- Develop marketing abilities. Be aware of opportunities to promote your business and take advantage of them.
- Keep your business plan up to date. It should be a fluid document that reflects your business goals, and a roadmap to get your business to where you want it.
Explain why a business plan is essential for the success of an equine business and the possible uses once it has been put together: A business plan is essentially a roadmap of your business. Not only can it guide the business owner and help set goals, and foster new ideas, it serves as a document which the bank will utilize if a loan is needed. It should include market analysis and can give a competitive edge in the market.
Why is image and reputation so important in a horse business: Image and reputation is extremely important in tho business because word of mouth is considered a main way in which most horse owners make decisions on who to work with. The image is not only the manner in which the grounds are kept, but on how each employee conducts him or herself. This determines whether or not clients return. A good example that I often see, when it comes to image, is that of a farrier. Clients share stories, the work ethic, personality and ability to pay attention to detail is very important to the farriers image. These types of things dictate whether or not they will be called back for the next trimming.
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