What separates a business from a hobby or passion project? It’s simple: A company is designed to make a profit. Your equestrian business is no different, whether you’re trying to make an extra $500 a month in horse show money from your side job or you’re trying to make six figures in sales and make waves in the horse industry, every business needs to have a strong, stable financial foundation at its core to function and grow.
If you don’t know how much money your business is making (or losing), how can you plan, budget, and grow? And without a plan, you’ll end up spinning your wheels and overwhelmed with money problems, which doesn’t leave much room to enjoy the time with your four-legged best friends.
The goal in your business should be to make money, plain and simple. That doesn’t mean you can’t also make a positive impact in your community, change people’s lives for the better, be creative and love what you do – it just means you have to keep track of the numbers while doing all of those things who fuel your passion to keep your business financially healthy, make you feel successful, and be able to scale, increase profits, or hire help when the time is right.
Developing a financial footing in your equestrian business is just as important – if not more important – than building a beautiful brand or a stunning social media strategy. With the right approach to you can build a stable and profitable business in the horse world. Yes, I know “stall” isn’t sexy (unless we’re talking about a beautifully designed stable full of boxes, of course), but it’s important. Trust me.
The horse world is fair beginning shifting the general mindset to the idea that you can work with horses and Run a business based on profitability and ease. It’s time we ditch the overworked, constantly broken cliché of professional equestrian sport.
A financial foundation should not be scary or intimidating. At its core, it’s about setting up your business to receive, process, analyze, and spend money to generate more revenue. This may sound boring, but let’s break it down to something more exciting: The better your financial footing, the more money you have for horses, and the more money you need to be able to scale your business and get help with it you balance more from this money and have more time to do what you love (which I’m guessing is…riding).
Every area of your business directly or indirectly affects how much money comes in and how much is spent, and it’s crucial to have all the data you need to run your business efficiently and understand how it actually works goes handle the money that comes in so you can eventually make more of it and be able to have a long life in what you do.
In the finance course, launching this month in the On Course Library, we’ll walk you through how to build your financial foundation from the ground up. But before you get started, here are my top three tips to keep in mind when it comes to finances and your equestrian business:
1. Prioritize profit in your pricing.
If you decide to price inappropriately out of lack of information or self-doubt, you make it all the more difficult for your business to grow. Services and products that are rated profitable allow a company to reinvest in the business and support itself. Also remember that pricing has a psychology: the price is too low compared to your competitors in the market and your customers will not see any value, they will wonder what is wrong with your offer that it is so much cheaper power. It’s one thing to be competitive when it comes to pricing, but another to underestimate yourself. Conduct market research, then evaluate what you bring to the table, set your goals, evaluate your spend and projects, and make sure you have a reasonable profit margin and price.
2. Track your financial data.
Separate your business and personal finances… and no, not just a little bit. Completely separate your personal and business finances. To start, open a business account or at least a separate bank account. This makes tracking your financial information much easier as it doesn’t get mixed up. My advice is to set up a Quickbooks account from the start and link it directly to your business account and any business credit cards so every transaction can be tracked. If you don’t feel ready for Quickbooks and have limited expenses and purchases, you can manually track financial data in an Excel or Google spreadsheet.
Whether you start tracking your finances with spreadsheets or with accounting software, just make sure you do it. Intimidation and lack of available time are often the reasons why most equestrian entrepreneurs don’t keep their books. Take the time to educate yourself on how to do your bookkeeping until you can outsource it. If you’re really struggling with managing your finances, hire an accountant as soon as you can and before you move on to the next step in your business growth. You absolutely must put the financial health of your business above just about anything else.
Bonus point: Tax authorities also appreciate the separation and data collection.
3. Read, analyze and use the financial information you collect.
The reporting part of your accounting software? It’s not just for show. This data can tell you so much about your business and can be the catalyst to help you strategically plan your growth plans, marketing, next offering, pricing, and more. It gives you insight into where you can cut your spending, if you need to raise your prices, how much more you need to earn each month to reach your goals, if you can afford to hire help, and if there are any red ones flags there you have to worry. Go through your financial reports at the end of each month and take the time to analyze and reflect thoroughly at the end of each quarter and the end of each fiscal year. This data can really affect or hurt your profitability and can – and should – affect every element of your business strategy.
Accounting is the financial life story of your business. How do you want your story to go?
NOËLLE FLOYD and On Course Equestrian are hosting a 30-day intensive program beginning with a two-day live virtual event. Horses and Money: The Workshop. The live event is running This weekend, 22nd-23rd October. Register here with the code HN50 for a $50 discount on the workshop.