A lot of people confuse their business plan with their business model.  A business plan details how you will execute your business model. A business model is how your business is structured to make money.

If your business model is broken, no amount of planning or executing of plans will work. Moreover, no amount of marketing will work -  because either your marketing will fail to attract new customers or the customers you do attract won't make your business profitable.

You can't fix your business plan until you fix your business model.

Here are some signs that you have a problem with your business model -

1. You are not making enough money and can't work anymore hours than you already are putting in.

2. You usually don't take enough time off because when you do, everything falls apart.

3. You have trouble finding (or keeping) good help and feel like there is no one you can delegate tasks to. 

4. You keep difficult customers (or customers that are a poor fit for your business) because you can't afford to get rid of  them.

5. You need to borrow money (this includes credit card debt) for either of these two common reasons -
(a) every time you need to grow your business (to buy more horses, equipment, to implement a marketing plan, etc..) or (b) in order to sustain your business during tough times.

6. You are un-bankable –  when you need to borrow money, you can't because the bank doesn't view you as a good risk.

7. Your direct competitors seem to be making more money than you are.

8. You have little to nothing set aside for a “rainy day” and heaven forbid if something ever happens to you – your whole business (and life) would go down the tubes.

If you answered yes to many of these questions, you are not alone. The vast majority of horse business owners are struggling with a broken business model.

Why do so many horse professionals use broken business models?
One of the most common reasons is that instead of developing their own unique business model, most horse business owners simply model their own business after other horse businesses that they believe to be successful. There are two major problems with this strategy -

Problem one, is that you may be duplicating an unprofitable model.  Many horse businesses appear outwardly successful, while inwardly they have huge profitability issues.  It is important to remember that equestrian sports attract the financially elite, and some high profile horse businesses are operated by people who don't need to make a profit.  It is also common for talent and sports success to be mistaken for profitability. Even though many horse professionals (if they had to make a choice) would choose equestrian success over financial success -  it is best to have both a successful career and a profitable business!

Problem two,  if your model is too generic – it won't be specific enough to work.
If you “copy” someone else's business model, you may not properly leverage your own unique skills and resources.  Your competitive advantage will not be developed enough to attract the right type of  clients or to charge the prices you need to charge in order to be profitable.

Also, a “copied” model doesn't sufficiently address the specific needs or challenges that are unique to your location, business offerings, skill set, age, resources or goals – it simply won't be fine tuned enough to make your business profitable and secure.

This is not to say you should try to “re-invent the wheel." There are successful horse business people out there and it is fine to emulate them – just recognize that while your business may be similar, it is not the same!  Plus, since profitability can be so difficult to identify from the outside, it is time well spent to work out your own model.

Solutions
As an equestrian business coach and editor of Equestrian Professional.com, people often ask me for help with their business plans, when what they really need (and want) is help with their business model! Some businesses need a complete overhaul, but most horse business owners can markedly improve their profitability by making several small but very important adjustments to their current model.

So how do we fix it? There are several steps and tools we use to create or repair a business model. Most of these tools are available to our members on the Equestrian Professional site.

Next newsletter, we'll discuss some of the tools we use and give you some tips for improving your business model. 

In the meantime, we encourage you to get involved with our “Tell A Friend Contest” - you could win an entire year of private equestrian business consulting!

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