You can have the best employees in the world but the reason most clients will start to do business and stay with your business is because of you. This business was your brainchild, is your heart and soul, you who makes or loses money...no one should be more invested in your business than you. But sometimes, it's not just working hard. It's working smart.
For example, you could try to save your business some extra dollars by doing all of the office work yourself. But if you are out in the barn, instead of in the office, you can connect with clients and employees. Checking in with clients may result in additional lessons, training or showing and can certainly result in more revenue for your business than whatever you'll save working in the office. You don't have to hold big parties or give great Christmas gifts. It can be as easy as taking a couple of photos of great moments in a lesson and e-mailing them to the student (or student's parents) later on.
Clients want to be treated "professionally". By dressing appropriately and focusing on your clients' needs, you show that you value the time and money that they are spending on your business.
You can also create goodwill by being approachable when you are away from home. Potential clients frequent the rail to watch how you interact with your students and horses in training. But be sure that potential clients can identify who you are by jackets, saddle pads, etc with logos that are easily readable from a distance. Check with your showing association to see what is allowed.
Try to find high exposure opportunities to which you can donate your time - clinics to benefit a cause, speaking at your breed or show association, etc. The return on your time will be rewarding to your business in terms of good PR and eventually, in dollars of revenue as well.
In the end, EVERY business decision you make (and remember, not making a decision is really making a decision not to act) effects the bottom line of your business. Represent your business well and work smart and you'll get monetary as well as personal satisfaction from your career.
Even the most diligent employees won't watch over your money as carefully as you do. So if you aren't responsible for all of the purchasing decisions at your farm, you need to create incentives for employees to make cost-conscious purchases. The easiest way to do this is to set an annual budget for each type of recurring purchase - feed and grain, supplies, maintenance, etc. The budget should be attainable and realistic and there should be some reward to the person responsible for purchases (e.g. barn manager) for coming in at or under budget. Suggest possible strategies for reaching the budget goals - purchasing in bulk, buying generic rather than name brands, etc. Require that any major changes be subject to your review before making the change. You want to save money but you don't want to replace a satisfactory product with an inferior one.
Another way employees can help save you money is by following established safety procedures. Accidents or injuries due to an employee neglecting to follow established safety rules will be reflected in increased rates for your workers compensation and general liability insurance. If your worker is injured, it will cost you money in the form of additional labor costs, possible reimbursement of medical costs and even potential lawsuits.
Is it possible to utilize your workers to do some of non-income producing work that you currently do? If you could be producing income but are instead stuck behind a desk, that's a lost opportunity cost. For example, if you can find a suitable substitute, you can hand over responsibility for monthly invoicing of clients and start teaching more lessons yourself. Finding a suitable substitute may mean hiring a part-time bookkeeper at an hourly rate less than what you'll be making teaching lessons. You'll be making more than you are spending for the bookkeeper and you'll be interacting with clients, where you belong.
Ask your employees for suggestions for cost-saving measures. They may notice poor quality or waste that is costing you money. They see a side to your business that you may not and can be a great source for ideas. Also, including your workers in the decision-making process is great for team-building and instilling a greater sense of responsibility.
Your employees can be a drain on your business or a resource for your business. It's up to you to create a work environment to benefit you both.
Equine Accounting: Looking for "People People"
When you look for an employee for your horse operation, you want someone who is good with horses, someone who can paste worm the most difficult horse in the barn with one hand tied behind their back, clean five stalls in less than five minutes and other equally impossible tasks. A big part of your livelihood comes from horses so, of course you want to hire employees who are strong in those skills - "Horse People"
But horses are only half of the equation. Horses are owned by people, expenses incurred by horses (like hay, grain and shavings) are paid by people and some people can complain a lot more loudly than most horses if they aren't happy with the services provided. Yet most employers don't consider the skills that are required for good customer service when making a hiring decision - "People People" and not just "Horse People".
While it isn't likely that most of the job applicants for horse businesses have had extensive training in customer service, some may have had experiences that will serve as a good basis for developing awareness and consideration of customer needs. So don't just focus on how many barns the applicant has worked at in the past. Also ask about experiences working in retail or service industries, where customer service is key.
No matter what their experiences, you need to provide training so your employees KNOW how you want them to handle a situation. Role play scenarios and offer suggestions for responses. When a client mentions that she heard that her horse wasn't turned out today as promised, "I forgot" is not an appropriate response but "Let me find the barn manager/owner and I'm sure she can answer your question" might be one example of how you'd like your employees to address the situation.
Spend some time in your barn and listen with the ears of a customer, not the owner. You might be surprised at what you hear - a barn manager berating an employee at full volume, a barn employee explaining to a customer why she hates working there, etc.
Good "People People" employees = satisfied customers who are eager to patronize your business and put money in your pocket. So invest in your employees by providing them with the customer service skills they need to help make your business a success.
Visit my website www.blueribbonaccounting.com to learn more about equine businesses.
But horses are only half of the equation. Horses are owned by people, expenses incurred by horses (like hay, grain and shavings) are paid by people and some people can complain a lot more loudly than most horses if they aren't happy with the services provided. Yet most employers don't consider the skills that are required for good customer service when making a hiring decision - "People People" and not just "Horse People".
While it isn't likely that most of the job applicants for horse businesses have had extensive training in customer service, some may have had experiences that will serve as a good basis for developing awareness and consideration of customer needs. So don't just focus on how many barns the applicant has worked at in the past. Also ask about experiences working in retail or service industries, where customer service is key.
No matter what their experiences, you need to provide training so your employees KNOW how you want them to handle a situation. Role play scenarios and offer suggestions for responses. When a client mentions that she heard that her horse wasn't turned out today as promised, "I forgot" is not an appropriate response but "Let me find the barn manager/owner and I'm sure she can answer your question" might be one example of how you'd like your employees to address the situation.
Spend some time in your barn and listen with the ears of a customer, not the owner. You might be surprised at what you hear - a barn manager berating an employee at full volume, a barn employee explaining to a customer why she hates working there, etc.
Good "People People" employees = satisfied customers who are eager to patronize your business and put money in your pocket. So invest in your employees by providing them with the customer service skills they need to help make your business a success.
Visit my website www.blueribbonaccounting.com to learn more about equine businesses.
Equine Accounting and Taxes: And with Sales Tax, your total comes to $$$....
Before someone goes on a horse hunting trip, hopefully they check their wallet to see that they have enough money to cover the cost of the horse, the vet check, transportation costs, tack (because the new horse is always a different size that all of your current tack), etc, etc. But many potential buyers never consider that sales tax may be due on their purchase.
There have been efforts to create a uniform sales tax that would be the same for all states but for now, each state regulates the imposition of sales tax in that state. As I mentioned in a previous post, some states charge sales tax on horse boarding. But many more charge sales tax on the sale of horses. Generally, most sales of tangible personal property are taxed and horses would meet that description.
If you purchase tangible personal property in a state with no sales tax, or the sales tax percentage where you made the purchase is less than your home state, you may be liable for use tax for the “use, storage or consumption” of that property in your state.
Because each state is different, I can’t write 50 articles about sales tax on the sale of a horse. But I can tell you about a situation which is a good example of possible sales/use tax liability for someone engaged in the business of selling horses. A regularly imports horses from Europe, both as an agent for his clients and buying horses directly himself, for training and resale later. A had a working relationship with several sales barns in Europe. So for purposes of simplification, even when acting as an agent for a client, it was A’s name on the paperwork for U.S. Customs. A was recently contacted by the Department of Revenue for his state regarding use tax liability on the horses purchased in Europe and brought to his state. If his state decides to audit these transactions, they could audit multiple years and some states have no statute of limitations for the examinations of returns. With some states charging as much as 60% in penalty and interest, this could become a very expensive problem for A.
There are many possible scenarios for the sale of a horse including: resident seller to resident buyer, resident agent (who holds no title to the horse) to resident buyer, resident agent to nonresident buyer, resident seller to nonresident buyer and nonresident seller (outside United States) to resident buyer and each may involve sales/use tax liability.
In my state of Massachusetts, if a horse residing in Mass is purchased and delivered to another state, the seller should provide the buyer with a letter of delivery. If there is sales tax in the new owner’s state, the new owner is responsible for the liability. But, if the horse comes back into Mass to live within six months of purchase, the owner would be responsible for Mass sales tax if they had not paid sales tax in their state. Sound complicated? It is. Some CPA firms specialize in this area due to the complexity and variety of regulations among states.
Though sales tax audits may not sound as familiar as an audit by the IRS, they are much more common. And with the current state budget shortages, some states look to sales tax audits as a way to make up some of the difference. So it’s important to the future of your horse sales business to learn more about the sales/use tax regulations of your state. Contact your state Department of Revenue as well as your state horse council, farm bureau or other related agency for general information. If you find that you have a potential sales tax liability, contact an attorney or CPA who specializes in this area.
There have been efforts to create a uniform sales tax that would be the same for all states but for now, each state regulates the imposition of sales tax in that state. As I mentioned in a previous post, some states charge sales tax on horse boarding. But many more charge sales tax on the sale of horses. Generally, most sales of tangible personal property are taxed and horses would meet that description.
If you purchase tangible personal property in a state with no sales tax, or the sales tax percentage where you made the purchase is less than your home state, you may be liable for use tax for the “use, storage or consumption” of that property in your state.
Because each state is different, I can’t write 50 articles about sales tax on the sale of a horse. But I can tell you about a situation which is a good example of possible sales/use tax liability for someone engaged in the business of selling horses. A regularly imports horses from Europe, both as an agent for his clients and buying horses directly himself, for training and resale later. A had a working relationship with several sales barns in Europe. So for purposes of simplification, even when acting as an agent for a client, it was A’s name on the paperwork for U.S. Customs. A was recently contacted by the Department of Revenue for his state regarding use tax liability on the horses purchased in Europe and brought to his state. If his state decides to audit these transactions, they could audit multiple years and some states have no statute of limitations for the examinations of returns. With some states charging as much as 60% in penalty and interest, this could become a very expensive problem for A.
There are many possible scenarios for the sale of a horse including: resident seller to resident buyer, resident agent (who holds no title to the horse) to resident buyer, resident agent to nonresident buyer, resident seller to nonresident buyer and nonresident seller (outside United States) to resident buyer and each may involve sales/use tax liability.
In my state of Massachusetts, if a horse residing in Mass is purchased and delivered to another state, the seller should provide the buyer with a letter of delivery. If there is sales tax in the new owner’s state, the new owner is responsible for the liability. But, if the horse comes back into Mass to live within six months of purchase, the owner would be responsible for Mass sales tax if they had not paid sales tax in their state. Sound complicated? It is. Some CPA firms specialize in this area due to the complexity and variety of regulations among states.
Though sales tax audits may not sound as familiar as an audit by the IRS, they are much more common. And with the current state budget shortages, some states look to sales tax audits as a way to make up some of the difference. So it’s important to the future of your horse sales business to learn more about the sales/use tax regulations of your state. Contact your state Department of Revenue as well as your state horse council, farm bureau or other related agency for general information. If you find that you have a potential sales tax liability, contact an attorney or CPA who specializes in this area.
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