Business matters
Do You Know The Two Things Profitable Horse Business Owners Have? By Doug Emerson The Profitable Horseman The following story about my experience as
keeper to do the entry work. You’ll make
a loan officer in a previous career is a good
more money giving riding lessons than you
example for keeping good financial records.
will tapping a keyboard entering data. Use
Seated at the kitchen table with a couple who
accounting software for your business. For
ran a small dairy farm, I was taking a loan ap-
the most basic record keeping, programs
plication to build a storage building for farm
like: QuickBooks, FreshBooks and other
Is Ben a good purchase for your lesson
equipment. The couple was tired of seeing
general small business software will serve
program?
their farm equipment rust and deteriorate
you well. For those who need more detailed
when left outside exposed to the weather. I
business information, check out the special-
Depreciation
agreed protection of expensive farm equip-
ized equine software available today.
Ignoring the possibility Ben may have a re-
ment is a sound business practice.
sale value when he is retired from the lesson However, while it’s advantageous to dele-
program; the straight line depreciation over
I explained to the couple decisions on loan
gate bookkeeping tasks, no business owner
5 years for him is $700 per year. ($3,500 di-
approvals are largely based on the repayment
should ignore the reports generated by their
vided by 5 years)
ability of the borrower. When asked about
record keeping software. Up to date finan-
the farm’s record keeping system and prof-
cial information allows you to check sales
Annual Maintenance
itability, the farmer pointed to his wife and
and profitability year-round. While living
This includes trim and shoes, normal veter-
said, “I milk the cows, she does the books.”
in the moment is sound advice for a healthy
inary expense, grooming, blankets and hal-
mental attitude, a healthy financial attitude
ters, special feed supplements, applicable
includes living in the future.
insurance, etc., plus hay, grain, bedding and
At that point she reached up to the top shelf
labor for normal care.
of a kitchen cupboard and retrieved a shoe box crammed full of paper receipts and a hand
Accurate projection of income and expenses
written check register. A bit surprised, I asked
with current financial information is a must
Opportunity Cost
how they knew what their profitability was.
when applying for a loan, making capital
If Ben occupies a stall that could be occupied
investment decisions and dealing with eco-
by a “paying” boarded horse, the profit that
“Simple, once a year we take the shoe box
nomic downturns like recession and Covid
would have been generated after boarding
and check register to the tax guy in town
19. Guessing may result in financial disaster.
expenses is also an expense of Ben the lesson horse.
and he tells us how much tax we owe…” Here is an example why having accurate They didn’t get their loan request approved. Business record keeping for most horse busi-
and timely business information from your
The key to analyze the contribution to profit
electronic record keeping system helps your
generated by each of your lesson horses is
financial decision making.
to track how many lessons each is used for each month and annually.
ness owners is a tedious task. When left up to the business owner, it’s often listed as the
You are considering purchasing a lesson
last thing to do and then ignored. For most
horse. Ben, a 12 year old horse, needs a rider
Your electronic records tell you:
people, record keeping and watching paint
with intermediate skills. Ben is offered for
1. “Ben” depreciates at $700 per year.
dry share the same level of excitement.
sale to you at $3500 and you expect him to
2. Annual maintenance totals $3,040 per year.
be a lesson horse for 5 years.
3. Lost profit from a boarder stall is $1,200
If you’re busy in your business, hire a book-
20
Fall 2020 | Riding Instructor
per year.
