The Horse Business Series: mastering your business plan
Creating a business plan can sound a pretty daunting. How much detail do you include? Where is the best place to start? Putting things in writing can seem pretty real, but that’s the point! A well-written business plan will help you to transform your dreams and passion into strategic, well-planned action, and it’s an important step that you shouldn’t skip. Many equine businesses struggle or even fail when they don’t develop a proper business plan, as a well-researched business plan can uncover risks and help you avoid them well in advance. Research from the agriculture industry shows that farms with written business plans average returns on assets that are five times higher than those without business plans. One of the great things about a business plan as a tool is looking back on it as years and milestones pass. You’ll see things that you achieved, things that you changed, challenges that you met and, very likely, many ways that you surprised yourself!
So how do you write a good quality business plan?
Success comes with careful planning and preparation. This is something you’ve likely had plenty of experience with already, when you consider your life with horses in a new lens. Maybe you are a regular on the competition circuit, in which case you likely map out everything you need to do in the run-up to a competition. You’ve practiced your test or patterns, you’ve planned all the logistics, you’ve prepared as many details in advance to take the pressure off on the day. You’ve probably got back-up options ready as well, like extra tack packed away on the trailer or maybe a friend to lend some support. You should use this same way of thinking when it comes to planning your business and tackling your business plan. You wouldn’t go into a competition without a solid foundation of preparation, so why wouldn’t you do the same for your business?
What should a great business plan include? Here are six key topics you need to cover:
Executive Summary – this is a one-page outline of who you are, what your business is or will be, what you envision for your business’s short to mid-range future (think the next five years!), and how you will be successful. Provide a brief overview of your current financials and your future needs. If you’re just starting from scratch, you might not yet have much information about financials, so provide a summary from your more detailed projections of revenue (the company’s income), expenses (money going out), and profit (what remains of the revenue once all expenses, including debts and operating costs, are subtracted). Importantly, remember to include why you care – injecting your passion and your unique voice into your business plan will make it stronger.
Product or Services – outline exactly what your business will offer, and what is unique about what you provide. What makes your service or product marketable? What do you provide that is unique, and why do people want it? Make sure to listen to your customers; find out where they are, what they care about, and why they want this product or service.
Marketing plan – how do you plan to attract and retain customers? First you need to know your target market, and then you can develop a strategy for attracting those customers. Outline your strategy for the next year, including a budget and your approach for analyzing how your plan is working, and cutting out what isn’t successful in order to make the most of your money.
Competition – find out who your main competitors are and list out their strengths and weaknesses. This is where you demonstrate your ability to fill a gap in the current market; talk about what you would do differently from your competition.
Goals – where do you want to take your business within the next year? Three years? Five years? Outlining realistic goals that you hope to achieve over varying time frames will not only help potential investors to see that you have thought through a realistic, achievable, forward-thinking plan for the business, but it will give you something to measure your own performance against. Writing your goals into your business plan will help you stay accountable to your success path.
- Financial Projections – you’ll want to map out projections of revenue and expenses for the next three years, along with monthly cashflow for the next two years. Doing so will help you to plan for leaner months and will help you to identify those times when you might have extra funds available to invest back into your business to achieve your goals. The easiest way to do this is to put everything on an Excel spreadsheet – include everything that you could think of that might come in and go out of your business account.
There are other elements that you can consider including within your business plan, but these are the must-haves that will provide you with a solid foundation. The more time and effort you dedicate to your business plan, the more you increase your likelihood of setting up a successful, self-sustaining business that will last for years to come. In the next article, we’ll discuss the importance of finding a mentor to provide objective feedback on your business plan and help guide you on your entrepreneurial journey!
If you have questions about writing a business plan, please let me know! You can find me at firstname.lastname@example.org