☛ So You Want To Be A Horse Trainer 3-11-15
SO YOU WANT TO BE A HORSE TRAINER!
IT MAY NOT BE AS EASY AS YOU THINK
By Rick Dennis
March 11, 2015
Many an aspiring horse enthusiast has looked to the professional horse-training occupation as a lifelong career in the equestrian world. I receive a lot of inquiries pertaining to the business matrixes involved in becoming a self-employed horse trainer. Equally, the next phase of questioning involves outlining a business model or guide he or she may use to establish a private entrepreneurship in the equine industry. My answers are generally always the same: “Becoming a self-employed horse trainer as a general occupation requires a lot more knowledge and involvement than just training horses.”
Chelsi Guillory, a student of Rick Dennis, Gonzales, La., rode Some Hot Chic (Cali), to the Louisiana Stock Horse Association Triple Crown Championship and are money earners in reining, cutting and cow horse competition.
Even though becoming a successful and talented horse trainer and/or an instructor able to teach students how to win in the arena, may be someone’s ultimate goal, it’s equally important for the entrepreneur to understand and apply basic business principles from the onset of his or her entrepreneurship to avoid certain pitfalls associated with marketing, taxes, IRS 1099 issuance, insurance, banking, bookkeeping, accounting, operating costs, cash flow, equipment costs or determining if you, or those who may work for you, are employees or contract labor.
To the aspiring horse trainer and/or instructor, my first recommendation is to locate a higher educational training facility specializing in business courses or locate a business tutor from an individual just graduating from college with a business degree. From this interaction the aspiring horse trainer will receive an invaluable wealth of knowledge in understanding basic business principles, which are conducive to starting and operating a successful privately owned business. The business world is filled with pitfalls the young trainer should be aware of prior to engaging in self-employment and the only avoidance available is education through a business curriculum, private tutorship or on-the-job training.
Many a private-sector business has failed due to the latter, simply because the first-time entrepreneur doesn’t understand the basic principles of business, is not properly prepared to balance income and expenses, doesn’t allocate money to pay required business taxes plus penalties (where applicable), and at the end of the year finds his or herself in a deep hole from which there is no recovery. In order to run a successful business, the manager must be a master in time management, use common sense, and do the right thing. During the day, the manager of a privately owned business wears many hats to ensure every phase of the business is properly addressed in order to stay in operation and ensure profitability.
YOUR BUSINESS PLAN
Each new business should start with a well-thought-out and written business plan. The business plan should outline not only the goals of the entrepreneur but the necessary steps to achieve success. A business plan should be assembled in a realistic and common-sense manner that transforms the business over time, with expansion or reduction being adjusted to available cash on hand and not speculation. As the old adage goes, “A bird in the hand is worth two in the bush!”
The plan should also include adding adjunct enterprises to your horse-training business as multiple sources of revenue generation (i.e.) student training, horse breeding, horse selling, horse boarding, etc. Generally speaking, the best plan is one that incorporates many sources of income instead of relying on just one type. This ensures a steady cash flow when other sources of business income are experiencing a decline in revenue.
Charles Richardson, Jr., a top student trained by Rick Dennis, won five World Championships and one Reserve World Championship. He has won AQHA.LQHA State Championships and money earnings of over $417,000 in team penning, team sorting, reining, cow horse and NCHA.
The next step is to decide how you are going to receive the necessary training to enable you to open, operate and maintain a successful, privately owned horse-training facility. Generally there are two ways of going about receiving the proper training: either you work for a trainer as a “contract laborer” or an “employee.”
The difference between the two is a “contract laborer” is responsible for paying his or her self-employment taxes to include individual state and federal income taxes, federal Medicare and social security taxes, which includes the initial self-employment taxes as well as the employer match. At the end of the year, you’ll receive an IRS 1099 from the trainer you are working for, stating the exact amount of gross money you were paid ($600) and over) for which you will be responsible for paying your share of taxes to the taxing agencies. The combination of Medicare and social security taxes alone computes to 15.3 percent of your net profit.
On the other hand, if you have “employee” status, these taxes are automatically deducted from your payroll check and the matching amount is paid for by your employer. At the end of the year, you will receive a W-2 from your employer. It will state the exact amount of money you were paid along with the total itemized deductions. You will then file the IRS W-2 form with your annual federal and state tax filings.
The IRS has common-law rules to determine whether or not your relationship with a trainer falls in the employee or independent contractor category. In an abundance of caution, it’s advisable for the entrepreneur to seek counsel with a tax attorney or a certified public accountant to determine which category your relationship status falls into. Preplanning on your part may save you a lot of grief when it comes to tax filing time. For example, you could think you’re an “employee” and at the end of the year you receive an IRS 1099 advising you that you’ve been working as a self-employed individual (contract laborer) and you haven’t set aside the proper IRS or state withholding taxes during the year. This means that at the end of the year you may owe a significant amount of taxes for your failure to set aside the proper amount of withholding money.
Also, once you feel you have learned enough to become a trainer on your own and hire help, the above information is very important to help you run your own training business.
To protect his or her assets, the entrepreneur should be well educated in business insurance requirements. It’s advisable to sit down with an insurance agent specializing in the business needs of the horse industry to insure that you, as a professional trainer, are well protected in the event of litigation, accidents, injury or environmental disasters. If your horse-training facility is located on your personal property, a qualified insurance agent can steer you in the right direction concerning required insurance applications.
LEGAL BUSINESS STRUCTURE
The next addressed item in your written business plan is to decide what type of legal business entity you should use to best address your needs as well as protecting your assets in the event of litigation. The common names for a legal business entity depends on your needs and are often referred to as: a Corporation (S & C), Limited Liability Company, Sole-Owned Proprietorship, Partnership, etc. A visit with a business attorney should answer which category is best for you.
MARKETING YOUR BUSINESS
Danetta Comeaux shown with WR Masters Lady and Dual Peps Taffy. Trained by Rick Dennis, she and her horses won AQHA/LQHA State Championships and were World Qualifiers in reining and working cow horse. They were also reined cow horse champions and money earners.
The most advantageous way of marketing your newly formed business is by winning in the show arena in performance horse competition. Once you have established yourself as a winner, your client growth is due in part to word of mouth. A good website is another way of marketing your training facility and yourself. There are a lot of good, do-it-yourself websites out there in the industry to help you out. Still another way is to attend marketing seminars to educate yourself in the most advantageous means of marketing your training facility.
The first premise of business is to understand the banking world. Balancing a checkbook not only ensures that you have a daily working knowledge of the amount of cash on hand in your bank account but it also protects you from an overdrawn bank account. Another important aspect of banking is maintaining a great credit rating. A good credit rating is a vital necessity to the privately owned business owner to ensure credit card issuance, loan availability or a line of credit to run your business while you are waiting for accounts receivable to come in.
Another important aspect of running a successful business is to have accurate bookkeeping records. This is the part of your business that sends out invoices for services rendered or out-of-pocket reimbursable expenditures, accurately records accounts receivables, accounts for cash receipts or money spent, and overall balances the books for accurate tax filings. A good bookkeeping system can be set up and maintained by you or your wife, or you can hire an outside person or agent to perform this job. Either way, an accurate set of accounting records is the heart and soul of a properly run business.
Over all, I’ve been in business since 1984. Unlike most professional trainers, where horse training is their principle line of employment, my professional horse-training facility was added as an adjunct business to an already existing business as another source of revenue. This concept has afforded me the opportunity of enjoying my passion of training and showing reined cow horses, while at the same time providing my business with a cash infusion from another revenue source. The advantage of having a professional horse-training facility as an adjunct business, instead of a principle business, is that while my horse business may decline from time to time, my other sources of revenue ensures my business remains in operation and financially balanced.
So in the end, if your desire is to become a professional horse trainer, an education in basic business principles is a prerequisite to operating a successful horse-training facility, along with feeding horses, mucking stalls when the help doesn’t show up, exercising and training horses, learning to take care of a sick or injured horse, hauling up and down the road to show client horses as well as learning to win in the performance arena.
“Until Next Time, Keep ‘Em Between The Bridles!”
© copyright 2015, all rights reserved.
Wind River Company LLC
Richard E. “Rick” Dennis
Office/Mobile: (985) 630-3500
Web Site: http://www.windrivercompanyllc.com