Written by: Sarah Worobey, Farm Credit Loan Officer
Starting a business can be a roller coaster of emotional feelings – excitement to be on your own, finally following a passion, to the fear of the unknown, and anxiety thinking about what is needed to make it in the business.
The best way to start, before jumping head first into a new venture that could change your world, is developing a business plan. This plan will help evaluate what you currently know about yourself and your future business, and help you communicate that to others. You’ll learn what is needed to make your business viable and profitable, as well as how to ask the hard questions to prepare for any bumps along the way. Here are five tips for developing a business plan for your specific equine business.
1. Get Your Ideas Organized
Being organized is a virtue in life, but especially in a business setting. Questions to ask yourself include “Why am I doing this?” and “What are my goals?” Compiling a list of questions for yourself will not only help you evaluate what needs and wants you have for this new business, but also how to get there realistically.
A business plan should look at the startup of the business through a minimum of five years of projections to consider all income and expenses your business will create. Not only is this beneficial to you to be successful and keep you on track, but it also helps you when presenting your plan to others that will help you along the way (lender, attorney, financial adviser, etc.).
2.Understanding Your Business Income and Expenses
At the end of the day, we need to know our numbers to be profitable and measure our success. Being profitable means you covered all your expenses for the year and have funds left over to pay yourself and live the life you are dreaming of. To do this, understanding your needs, not only financially, but accounting for literal everyday needs, will be vital in creating a successful business.
To start, make a list of all expenses you project your business to have (feed, bedding, labor, insurance, etc.). Talk to similar businesses that are doing what you plan to do. Are you sure you are accounting for everything? Always project a little higher on expenses to account for the unknown. That way, when major maintenance/repairs or other unforeseen issues arise, you already have a plan in place to account for those expenses. Again, to be profitable is to plan for both the known and unknown.
Thinking about income, make sure to account for all income sources that will be part of the business (are you boarding horses, training, breeding, specialized care services, etc.). They might not all be part of year one, but thinking long term into years two through five, there may be additional sources of income that have the capability to help offset expenses. Make sure to have viable reasons as to why this income is projected to grow throughout the years. When compiling this information for a financial advisor or lender, they will need to understand your goals and how you plan to get there.
3.What Does Your Mission Statement Say About Your Business and Yourself?
You might ask – what is a mission statement? A mission statement is a formal summary of the goals and values of a company, organization, or individual.
This is not something a lender or attorney would ask for per say, but something that should always be a part of a business plan to reaffirm what goals, values and services you are providing to your future customer base, who you wish to connect with, and how you plan to accomplish that. Culture plays a large role in a mission statement, which in turn helps one to determine what the best fit for their business is, and how to shape that business around the right group of people to market your business to.
4. Ideas For Your Business Marketing Plan
Taking time to understand your target audience and business structure will allow you to develop a marketing plan that works for your needs and one you can stick to. Some items to consider would be:
- Where are your clients? Are they local and looking to be at your farm daily, or are they bringing in horses from across the state/country for your specific service? How will you reach them?
- Networking – Developing a network of trusted referral sources will strengthen your overall business. How did you get to where you are now? Do you have a circle of close clients/friends who are able to refer work to you, or groups that have the same values in business as you do?
- Tell your story – The more personal you can be with your story and tell others how you started and what your business goals are, the more relatable you become to your ideal clients.
- Why would I want to bring my horse to YOU? – This will be an age old question moving forward in your specific business plan. Why would someone want to take their horse, and its needs, to you? What do you offer specifically that connects with their needs and values and develops trust in not only your business, but you as a person caring for their animal’s daily needs?
5. Building Your Farm Resources
One other item to remember is your external farm resources. These people and groups can (and should!) include your lender, accountant, attorney, and insurance professional (for your property, as well as liability for the business), just to name a few. These people all bring different perspectives and expertise to the table to help you be as successful in your business as possible. They have all seen businesses work and some that have not, so use them to your advantage and learn from their experiences to make your business sound and successful.
Third party perspectives can feel as if they are tearing your business plan apart and scrutinizing it. Take the constructive criticism and a step back at the same time. Their goal is not to make you feel as if you cannot be successful in your new venture, but rather help you identify potential issues, and address them accordingly so they are not a problem down the road.
Although taking these first steps to develop this plan may seem overwhelming, remember: you have the passion, now you need the plan that will help you make it a reality. Face your fears, talk to your resources, and don’t be afraid to ask for help. Here at Farm Credit, we are more than a lender. We are a part of your community and a resource to help you become the successful business owner you have envisioned for yourself.
Check out our blog to learn how to create a business plan section by section and download a free fillable business plan template. If you’re ready to discuss next steps, our family at Farm Credit is here to help. Give us a call today at 888.339.3334.