6 Steps to Improve Your Horse Business Model
Elisabeth McMillan
Last week, we talked about how to identify a broken business model. This week, we are going to discuss tools and tips for repairing and/or improving your business model.
When a private consulting client asks us to help them with their business, we generally take them through the six step process outlined below. Most of the tools we use in this process are available to our members and we will provide you with a list of these tools at the end of this article.
I. Value Proposition
Generally, the first step in creating or repairing a business model is to take a look at the company's value proposition. Unfortunately, this is a step that many horse business owners skip.
Your value proposition is a description of the customer's needs, how your business addresses those needs and the value of this solution from the customer's point of view.
And while it may sound simple, your value proposition is far more than words on paper. It is the core of your business. The tricky part is that your value proposition is from the customer's perspective. Far too often, we see horse businesses that have been designed around what the business owner believes has value (or around things the business owner enjoys doing) and the customer has been left out of the equation.
II. Market Segment
The second step is to analyze your market segment. Sometimes, changes in your current market's needs can make it necessary for you to adapt your business model. Other times, a new market segment must be identified in order for your business (and equestrian career) to truly reach their potential. Horse professionals that have connected with the right market segment find it far easier to progress their businesses - their business and their clients have shared goals. Constantly battling your customers in order to progress your business is a sign that you may have an issue with your market segment.
III. Revenue generation and margins
Which activities bring in the most revenue? Which activities have the highest profit margin? What profit margins are necessary for your business to thrive? If you don't know your profit margins you may inadvertently build the least profitable areas of your business. Or you may offer a service that is costing, rather than making you money.
IV. Value chain analysis
This is a fairly complex process and the value chain structure is different for service vs. product oriented businesses. For example, a training business is service oriented and will have a different value chain structure than a breeding business which is product oriented. However, for both types of businesses, value chain analysis can include identifying possible areas of diversification and additional points of service in order to add more value to the customer and generate more income for the business.
V. Positioning and value networks
This step includes identifying both your competitors and your "complimentors". Who are your competitors and where would like your business to be positioned amongst them? Are there strategic alliances you can build with other businesses (complimentors) that can help you to provide more value to your customers? If you are a trainer, this could include building a good relationship with a sales barn so that you can consistently find good horses for your clients. If you are a breeder, it could be locating a breaker that makes your horses substantially more rideable than your competitors. Properly positioning your business and developing your value network not only makes you business more profitable, it helps to create differentiation, which is essential to your competitive advantage.
VI. Competitive Strategy
How will you develop a sustainable competitive advantage? Will you compete on cost? Differentiation? Niche? This is a fairly complex piece of the puzzle. It is also unique to each business, so we won't go into too much detail here. However, what we can tell you is that competing on cost is rarely sustainable for any horse business. One of the most common failures we see in horse businesses is because they have not developed a true competitive advantage - they are trying to be "all things to all people". On the other hand, the most financially successful horse business owners have developed a clear competitive advantage based on differentiation and niche.
Tools and Resources Clearly, hiring a private consultant to take you through these steps is extremely beneficial. However, its not always necessary. Here are some of the tools that we use and make available to our members. If you are not a member and would like to preview how some of these tools work we encourage you to go to visit our YouTube Channel.
1. Value Propostion Tools
Why Equestrian Businesses Need Strong Value Propositions & How To Develop One That Works
 As an equestrian business owner your answers to two questions essentially determine the success of your equestrian business. 1. Who are my ideal customers? 2. What do I have to offer them? The best way to answer these questions is to determine and develop your customer value proposition. A strong customer value proposition is perhaps the single most important thing your business can have. It is absolutely essential to . . . More
2. Market Segment Tools
Horse Business Assessment & Profit Development Plan
 If you know you need to fine tune your business or marketing plan but hate the thought of all the time it may take you to get it done OR have never written down your business plan but know you need one - This is the right download for you. A series of key questions help you identify important strengths and correct weaknesses in your business. . . .
3. Profit Margins & Revenue Tools
Equestrian Business Profit Calculator
 O.K. This is totally cool!! Use this online calculator to check your profits and profit margins in individual areas - like Training versus Sales or Boarding versus Lessons and in it's entirety. Use it to test new ideas and different business scenarios. Use it to help price your services, products and more . . |
4. Value chain Analysis Tools
Seminar Replay Video: Income Diversification and Development for Horse Professionals
 Members! If you missed the Horse Business Seminar - Income Diversification and Development for Horse Professionals - Be sure to watch the video! We posted it on the site for you! . .
5. Positioning Tools
Getting Your Team on The Same Page - How to Write an Equestrian Brand Positioning Statement
 Sure - The benefits of branding are clear but how do you apply them to your horse business? And how do you get your employees to represent your business the way you need them to .
6. Competive Advantage Tools
Horse Business Assessment & Profit Development Plan
If you know you need to fine tune your business or marketing plan but hate the thought of all the time it may take you to get it done OR have never written down your business plan but know you need one - This is the right download for you. A series of key questions help you identify important strengths and correct weaknesses in your business. . . .
If you found this article helpful you may want to take a VIDEO TOUR to learn more about us and (if you haven't done so already) be sure to sign up for our FREE NEWSLETTER! We'll also send you “The 10 Best Ways to Make Your Horse Business More Profitable” free. Just fill out the form below, confirm your subscription and you will be all set to receive weekly business tips just for horse professionals.
| 
Our Guarantee
del.icio.us
Digg
Reddit
Facebook
StumbleUpon
GoogleBookmark
Technorati
Furl
Twitter