The Money Series: 3 Finance Tips for More Profit in Your Equestrian BusinessJul 06, 2022
by Christa Myers
What separates a business from a hobby or passion project? Easy: a business is designed to turn a profit. Your equestrian business is no different, no matter if you're trying to make an extra $500 a month in horse show money with your side hustle or generate a six-figure revenue and make waves in the horse industry, every business needs to have a strong, stable financial foundation at its core in order to function and grow.
If you don’t know how much money your business makes (or loses), how can you plan, budget, and grow? And without a plan, you'll end up spinning your wheels and fast-tracking yourself to overwhelm and money troubles, which doesn't leave a whole lot of room for enjoying time with your four-legged best friends.
The goal in your business should be to make money, plain and simple. This doesn't mean that you can't also make a positive impact on your community, change people's lives for the better, be creative, and love what you do – it just means that you need to keep the numbers in mind while you do all of the things that fuel your passion, so that your business can stay financially healthy, you can feel successful, and you can be in a position to scale, increase profits, or hire help when the time is right.
Developing a financial foundation in your equestrian business is just as important – if not more important – as building a beautiful brand or having a killer social media strategy. With the right approach you can create a stable and profitable business within the horse world. Yes, I know "stable" isn't sexy (unless we're talking about a beautifully designed stable full of stalls, of course), but it's important. Trust me.
The horse world is just beginning to shift the overall mindset towards the ideas that you can be work in horses and run a business based on profitability and ease. It's time we leave the overworked, perpetually broke equestrian professional stereotype behind.
A financial foundation shouldn't be scary or intimidating. At its core, it’s just setting your business up to receive, handle, analyze, and spend money with the intent to generate more revenue. That might sound boring, but let's break it down to something more exciting: the better your financial foundation, the more money you'll have for horses, and the more money you'll have to be able to scale your business and get some help so you can make even more of that money and have more time to spend doing what you love (which I'm guessing is... riding horses).
Every section of your business directly or indirectly affects how much money comes in and how much goes out, and it's critical to have all of the data that you need to be able to operate your business efficiently, as well as understand how to actually handle the money that comes in so that you're able to eventually make more of it and to be able to have longevity in what you're doing.
In this month's finance course releasing in the On Course library, we'll be breaking down 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 choose to price inadequately from lack of information or self-doubt, you are making it that much harder for your business to grow. Services and products that are priced to create profit allow a business to reinvest in the business and support itself. Remember too that there is a psychology to pricing: price too low compared to your competitors in the market and your customers won't see added value, they'll wonder what's wrong with your offer that makes it so much cheaper. It's one thing to be competitive in your pricing, but another to undervalue yourself. Do market research, then evaluate what you bring to the table, set your goals assess your expenses and projects and make sure you have an appropriate profit margin, and price accordingly.
2. Track your financial data.
Separate your business and personal finances.. and no, not just a little. Entirely separate your personal and business finances. Open a business bank account or at the very least a separate bank account on its own when you’re starting up. This makes tracking your financial information much easier as it’s not intermixed. I advise that you set up a Quickbooks account from the get-go and link it directly to your business account and any business credit cards so that every transaction is tracked. If you're not feeling ready for Quickbooks and have few expenses and purchases, you can track financial data on an Excel or Google spreadshet manually.
Whether you begin tracking your finances with spreadsheets or with accounting software, just make sure you do it. Intimidation and lack of available time is often the reason most equestrian entrepreneurs don’t do their bookkeeping. Take the time to educate yourself on how to complete your bookkeeping until you’re able to outsource it. If you really struggle with managing your finances, hire a bookkeeper as soon as you're able to and before you move to the next step of growth in your business. You absolutely must prioritize the financial health of your business above pretty much everything else.
Bonus point: tax agencies also appreciate separation and data collection.
3. Actually read, analyze, and utilize the financial information you gather.
The report section of your accounting software? It’s not just for show. That data can tell you so much about your business and can be the catalyst that helps you strategize your growth plans, your marketing, your next offer, your prices, and so much more. If will give you insight into where you can decrease your expenditure, if you need to raise your prices, how much more you need to make each month to reach your goals, if you can afford to hire help, and if there are any red flags you need to be concerned about. Go through your financial reports at the end of each month, and take the time to analyze and reflect in-depth at the end of each quarter and the end of each fiscal year. This data can truly make or break your profitability and can – and should – influence every element of your business strategy.
Bookkeeping is the financial life story for your business. How do you want your story to go?
Photos by Gold Horse Photography.