Every business has a profit pencil, but no business as a cash pencil. What does that mean? What it means is, profit is an accounting opinion and cash is fact. You can fool yourself and others about your profit, but you can’t fool anyone about your cash. You can under or over report your profit by moving expenses and income to a different reporting period. But, you always need to know if you have enough cash to pay you help, pay yourself, purchase your feed in two weeks and make that truck payment on the 15th of the month. In a horse business, more so than most other businesses, budgeting and cash management are both extremely important. Cash flow is king in a horse business. However, ...
Branding is one of the most important activities within any business. Branding generates market awareness. Market awareness generates potential customers. Potential customers become customers. Customers buy your products. That was easy! Now the world knows about you, wants your product, you’re having fun making money, and life is good! From 50,000 feet you might think that is all that needs to happen if you want your business to become an icon in your market space and have the world demand your products. Unfortunately, at 50,000 feet it is difficult to see what really needs to happen unless you have the business discipline to take a high resolution look. When you are in business, ...
The majority of horse business people think their financial transactions are financial records they only need for filing their taxes, and occasionally satisfying their banker. While financial transactions are a starting point, and in some cases all you need for your taxes, they are not sufficient when your tax authority or banker requests supporting documentation. And don’t get caught in the ‘receipts are documentation’ trap! Receipts are only a small part of the supporting documentation a tax authority will want to see. Your tax authority will want you to prove that your financial transactions are legitimate and your business is viable if you are reporting a loss. Your ...
When most people start a horse business the last thing on their mind is business management. Hopefully, I can convince you why business management should be at the top of your list before the end of this blog. Now I have your attention let’s break a horse business down into three simple principles.Marketing and Sales: No customers, no business.Income and Expenses: It’s not what you make, it’s what you keep.Business Management: If you can’t measure it, you can’t manage it.Most horse businesses start from a love affair with horses. That isn’t a bad thing as long as you don’t let your heart dominate your business decisions. Don’t get me wrong ...
We all use vehicles in our horse business, but we generally don’t do a good job tracking, documenting and managing their use. It is often said, ‘the tax man doesn’t know a lot about horses, but he sure knows a lot about mileage, trip logs, and vehicle personal use.Time is a priceless commodity in any business, but particularly in a horse business – there is never enough. Many horse businesses that fail, fail because of the lack of business discipline in prioritizing their time so they have enough time to manage their business. In a horse business too many ‘things’ fall through the crack because of available time. Unfortunately, vehicles are too often one ...