In roughly 60 days, many of us will be making our own personal New Year's resolutions. However, the time to get started on New Year's resolutions for your horse business is now! Why? Because your business can't react as quickly as you can! If you decide you want to start a new diet or exercise regime you can start tomorrow! But if you want to make changes in your business, for example, add new services or raise your prices - you'll need to do some homework first. And, doing that homework now can make all the difference in a happy and profitable New Year!
New Years in November means -
Reviewing the first ¾'s of the year so that you can accurately identify where your business stands. It's hard to head in the right direction unless you know for certain where you are. And so, the first thing you'll need to do is to see if your horse business is going to make a profit or if it is more likely to have a loss in 2010. Why? So that you can take action! For example:
If it looks like you have a loss -
Perhaps you will need to raise your prices for 2011?
If so, you will want to sort out what your new prices will be and give your clients proper notice. This means taking a close look at your Profit and Loss Statements as well as your profit margins.
TIP: Be sure to check your profit margins in each different area of your business. Play with different scenarios. This will help you to more accurately correct profitability issues. (The Equestrian Professional Profit Margin Calculator and video is very helpful for this - it is a huge time saver)
TIP: If you use Quickbooks use the Year to Date Comparison view and check out how this year compares to the last 2 years. This will help you see your progress and to identify temporary vs. long term issues your business may be dealing with.
If you looks like you will have a gain -
Maybe it's time to spend a little money (in your business of course) so that you can offset the gain and reduce your tax liability? If so, you will need to decide where that cash will do the most good. It's wonderful to reduce your taxes but even better to make a smart investment in your business. Do your homework and choose carefully.
TIP: Make a list of things your business needs. Note which items can be expensed vs. depreciated. And which items will have ongoing costs for example, if you plan to finance new equipment or improvements to your farm.
TIP: If you have an accountant this is an excellent time to meet with them! Most accountants have time right now where they can help you review your year to date, and can make suggestions on adjustments for year end. If you do not have an accountant - now would be a good time to start interviewing candidates!
These are just a couple examples of things you should do now for a Happy New Year in 2011! It's also a great time to review your insurance coverage and legal documents. Our next seminar - "Equine Liability Laws and Exposures - What Every Equine Business Owner Needs to Know" will help you in these areas. It is free to all horse professionals. Click here to register!
Equestrian Professional Members - Want to end 2010 with more money in the bank? Be sure to read "5 Ways to Give Your Horse Business an Injection of Cash Before the New Year"