The One Thing Nobody Tells You When You Start Your Horse Business…

By: Doug Emerson, the Profitable Horseman

Anyone who has started a business knows the excitement and satisfaction of being one’s own boss. No more orders to take from superiors, total control of how you spend your time, and, best of all, the freedom to keep the money your business earns by your hard work!

I felt those exciting feelings when I started working for myself and also enjoyed a feeling of self-confidence that things could only go right. After all, I was the boss now.

Here is a short story about the one thing people don’t tell you when you start a business.

My mentor, Mike, was an experienced business owner for over 40 years when I first met him. Born in Denmark, he immigrated to the United States with knowledge of the world and how it worked. He’d served in the North Atlantic during World War II as crew on a fast moving patrol torpedo (PT) boat. As a result, he was disciplined and had learned to control fear. Tough but fair is an accurate description of his demeanor.

We were having a conversation one day about business when he spoke a disturbing sentence to me. “Doug, someday, no matter how careful and diligent you are in your dealings, you’re going to lose money. You see, all business transactions involve an element of risk for you to earn money. And eventually, risk catches up to you, and that means you’ll provide goods or services in good faith and not get paid. When, not if, it happens, acknowledge the loss and keep moving forward.”

Those two words, “lose money,” were chilling to hear. I chose to bury Mike’s gloomy message deep into my subconscious, convinced that if I didn’t think about it, it would go away.

Eventually as predicted, I lost money on a business deal. Mike’s wise words replayed in my head immediately. That “someday” had arrived, and I sure didn’t like the feel of it. How could I’ve been so blind, so trusting, and so stupid not to see it coming? If Mike had not told me earlier that losing money was part of playing the game of business, my agony would have endured much longer than it did.

Heeding his advice, I acknowledged the loss, analyzed why it happened, and then moved on. Since then, I’ve lost money from time to time in a variety of businesses, including the horse business. Mike’s philosophy has helped greatly, and I smile now as I vividly remember our candid conversation long ago.

Since you are a business person operating as a professional horseman, you too will have or already have had customers who don’t pay you in your businesses of boarding, lessons, training, and horse sales. You will lose money.

You will buy horses for resale and not be able to recover the maintenance expense, training time, and marketing effort you put into the project. You will lose money.

You’ll lose money when you buy equipment, vehicles, and saddles that don’t perform as you hoped.

You will lose when you hire people who turn out to be total duds as workers.

Here are ways to minimize your losses when they occur:

Boarders, just like apartment renters, who get behind more than a month usually will never get caught up and remain habitually delinquent. Give them legal notice that you are evicting them for non-payment. If necessary, settle for a lesser amount of the past due board for cash payment for them moving their horse out immediately. It’s better to get some of the money and their horses out of your barn so you find a paying customer to replace the income. If you are “nice,” chances are excellent the boarder will soon be six months behind and you’ll have a lien on a boarded horse of low value, which needs a farrier and veterinary care, and will be difficult to sell within the requirements of state laws. Your boarders will respond to “tough but fair” policies much better than “nice and lenient.”

Collect training fees in advance for customers you have no experience with. It’s a reasonable expectation.

Collect lesson fees in advance with package lesson programs. Your income will be more predictable and your students won’t have to worry about paying every time they have a lesson. If a “pay as you go” lesson model is better for you, insist payment is due the day of the lesson, not next time. Next time may be never. Continuous accommodations for forgetful students who don’t show up or need to cancel or change lesson times frequently should be avoided. Remember, as an instructor, all you have to sell is your time. A cancelled scheduled lesson or a no-show student robs you of non-recoverable income dedicated to that time slot.

For purchases of equipment, vehicles, and tack, a bargain price is never rationalization for accepting inferior quality. Experience shouts that it’s better to pay a little more for quality than to pay twice for inferior products.

You’ll know at the end of the first week on the job by your new employee if you’ve hired a keeper. All too often, employers think they can fix and train an unskilled employee. You can’t afford to find out. Let the employee go immediately to find more suitable work. You’ll be doing yourself and the employee a huge favor. Prolonging the inevitable dismissal results in a huge monetary loss in many ways.

To sum up:

• Accept the certain truth- you’re going to lose some money along the path of success.
• Cut your losses by resolving problems quickly.
• Procrastination never helps.
• Don’t wallow in self-pity due to your financial loss.
• Learn from the mistake and get out there and sell something-lessons, boarding, training, or a horse.

You can’t go back in time, and you can’t go forward into the future. Your choice is simple. Do your best work today and every day and your business will continue to improve.

If you are looking for horse business help, need a speaker for your equine event or are interested in attending or hosting a horse business workshop, email here: doug@profitablehorseman.com or call 716-434-5371.

Doug Emerson helps professional horsemen struggling with the business half of the horse business.

Visit his website:  www.ProfitableHorseman.com for more articles like this one and to subscribe to his free electronic newsletter about being profitable in the horse business.