Every horse business should have a written business plan. There are a couple of reasons for this. First, if your business is a start-up, the business plan will help you reduce financial risk by realistically assessing anticipated income and expenses before the business is launched. Second, a written and regularly-updated business plan will help you in the case of an audit by the IRS, especially if the IRS suspects that your horse business may actually be a "hobby" or that you did not actively participate in the management of the business. Finally, a written business plan, especially if attractively packaged, can help foster good business relationships with banks, creditors, and others in the horse industry who can either send you business or help you in some other way.
Since there is really no downside to have a written business plan, I suggest that every horse business (including businesses that have been operating for a while without a written business plan) keep an electronic and hard copy of a business plan that addresses the following items:
1) A summary of the business goals and objectives of the business;
2) An outline of how you will attain your business goals;
3) A list of the types of advisers you will consult (such as horse industry mentors, accountants, and attorneys);
4) How the business will be owned (i.e. through and entity such as an LLC, who all owns an interest in the business, the percentage interest each owner holds, etc.);
5) How the business will be financed (i.e. where you will obtain the initial capital needed to start up the business, and the amount needed);
6) Projected income and expenses for the next 6 months and year (be conservative…most business plans underestimate expenses and necessary capital; also, you should avoid projecting income and expenses further out than one year as these often become meaningless due to changing conditions and strategies);
7) The method(s) you will use to find and secure good clients (advertising, networking, shows, etc.).
There really is no "magic formula" for a good business plan, nor should it be set in stone. Your business is your dream, and your plan needs to set out your unique and individual vision and talents. Your business plan will act as a "road map" for your business to help you stay on course with your goals and avoid foreseeable hazards. It should be updated and revised at least once per year, if not more often.
To help you get started, see the attached Sample Equine Business Plan, to which you can add information to fit the needs of your particular horse business. As you can see, my sample is fairly basic. There are a lot of sample business plans you can pull up online, and most of those are pretty complex. One site that provides sample business plans is BPlans.com. Do not let the complexity of others’ business plans intimidate you into not doing one at all. While more detail is better in some instances, do not put off doing a business plan just because you don’t know your exact numbers or you see others putting pie graphs in their business plans. The key here is to have something in writing that you can add to and enhance as your business grows.