Final Report for CNE12-101
Project Information
This project addressed the uncertainty of the New Jersey equine industry and the effect that individual businesses can have to stabilize the industry as a whole. It was established that the majority of equine operations in the state do not write or utilize business plans, which is an excellent way to analyze the potential success or failure of a venture. A team of equine and farm management specialists, along with farmer collaborators, developed a new educational program designed to walk equine business owners through writing a complete business plan. The process of writing the plan requires market analysis, self-reflection, and financial analysis to truly determine if a business is sustainable. The educational program consisted of a seven-week course and an interactive workbook with examples and questions to answer. The first offering of the course was highly successful with glowing reviews from 31 participants about how much it helped their businesses or business ideas. The workbooks were then offered for sale to another 26 participants. While it is nearly impossible to measure the actual effect on the New Jersey horse industry, we are confident that an increased number of carefully planned businesses will act as a stabilizing force to the entire agricultural sector.
Performance Target: Equine business owners in New Jersey now have a new tool to help navigate the myriad considerations when running a business. Thirty one New Jersey business owners spent a considerable amount of time analyzing their market, strengths and weaknesses, current operations, and finances during a seven-week course and 26 more nationwide now own the materials to walk them through that same process.
- Objective 1. Increase awareness of business planning in the New Jersey horse industry.
- Objective 2. Provide live business planning training for horse business owners or potential business owners.
- Objective 3. Distribute educational materials to additional business owners or potential business owners.
New Jersey’s equine industry is currently in a precarious position. In these economic conditions, equine operators need to be more business-savvy than ever in order to stay afloat. The Equine Business Planning course taught 31 of these entrepreneurs located in the New Jersey area how to plan and run their businesses more effectively, plus 26 more nationwide, through a workbook that was made available to those who missed the course. The equine industry tends to be treated separately from the rest of agriculture, but it is important to remember that horse owners support many other segments by purchasing hay and grain, seeking veterinary care, and patronizing local businesses for other supplies. The horse industry also plays a valuable role in preserving New Jersey farmland that would otherwise be developed. New Jersey’s equine industry is made up local communities of equestrians who seek information and advice from one another. This dynamic means that if a few horse business owners take this course and complete business plans, then they have the potential to benefit the entire community by sharing their successes and encouraging others to complete business plans. Making sure that equine operations stay in business is one way to help ensure a sustainable agricultural community in New Jersey.
Cooperators
Research
Our team began by giving an online survey to determine the New Jersey equine industry’s opinions on business planning and found that a lack of information and materials was a major setback to our business owners. We then held meetings with key players (including Rutgers equine team, Rutgers farm management team, and equine farmer collaborators) to develop a plan for course development and curriculum. The curriculum was based on existing materials written by collaborator Dr. Robin Brumfield (“Business Management”, Chapter 17 of Greenhouse Operations and Management and “To Market, To Market”, a marketing workbook designed for beginning production farmers), which were edited to serve the horse industry specifically rather than the greenhouse industry. Since many aspects of business planning are similar across industries, the majority of the work was in developing examples. We created a sample farm and wrote its business plan and financials using the workbook. Our farmer collaborators were instrumental in providing insight into topics such as equine insurance, finances, and the day-to-day considerations in running an equine business.
We solidified the course schedule, which consisted of seven three-hour long classes on Tuesday evenings in two separate locations from February to March. The locations were linked through an online video conferencing program, so speakers could present in one location and be seen and heard in the other location. Each evening covered a major section of the workbook and featured presentations by Robin Brumfield and industry leaders. The topics were Introduction, Strategic Planning, Production and Operations Plan, Marketing Plan, Management and Personnel Plan, and Financial Plan (for a detailed weekly topic schedule see the agenda). We also included a graduation/networking session as the last class so that participants from the two locations could meet as we concluded the course. Thirty-one participants completed the course. Evaluations were given during the last class session.
Based on the evaluations, we edited the workbook a second time to reflect the participants’ suggestions. Some sections were added and the sample plan was incorporated into the workbook. We sent several press releases highlighting the success of the course and the availability of workbooks, and distributed another 26 books. We decided to charge a small fee for the workbooks for two reasons: to offset the cost of producing another round of workbooks once the NESARE grant was over; and because we have found that people are more serious about materials and classes that they have paid for compared to free ones.
Follow-up evaluations were sent in December 2014 and August 2014 to determine long-term impact of the course. All participants were informed during the course that they would be contacted for two follow-up evaluations. They were contacted first by email, sent 1-2 reminders, then by phone/voicemail. Anyone who bought a workbook was also contacted with an evaluation in August 2014. A Rutgers Fact Sheet and Journal of Extension article are being drafted based on the workbook contents and the success of the course.
Survey
Our initial online survey made it very clear that there was a need for this course. Sixty-four percent of survey respondents had attempted to write a business plan, yet only 31% had a complete written business plan. Of those who attempted to write one, 66% found the process difficult and cited reasons such as limited time, no access to appropriate resources, too many variables in the industry/economy, and feeling it was unnecessary for the individual business. Other obstacles included people problems and that the process was too confusing. Eighty percent of respondents estimated that under 25% of horse businesses have written business plans, and 82% believe that having a written business plan is important to the viability of a successful horse business. Lastly, 66% of respondents expressed interest in taking a business planning class.
Initial Evaluation
At the end of the course (March 2013), participants were enthusiastic and rated it very highly. The course as a whole received a 4.9 on a scale of 1 to 5 (5 bring Very Valuable) from the participants. Seventy-six percent of participants who completed the final evaluation now have a business plan thanks to the course. Of those who replied that they did not have a business plan, 50% intended to finish it soon. When asked the time frame in which participants would make changes to certain areas of their business (complete a SWOT Analysis, review insurance/risk management options, change marketing activities, change handling of personnel, complete financial review, and consult with lawyer/accountant), the vast majority (81%) responded that they would make each of these changes within 6 months of the course or had already completed the actions before the course. Ten participants wrote that the course did change their opinions on the importance of business planning, with comments such as, “We had no idea the importance of business planning before starting this course” and “I knew it was important, and I knew what I needed to do, but didn’t know how to cut into manageable pieces that I could then go and use to not only develop a plan, but plan for the future and envision growth.”
Follow-Up Evaluation
The first follow-up evaluation was completed in January 2014 and we received responses from 65% of course participants. It asked the same time frame questions about certain business actions. Fifty nine percent of respondents reported that the changes had been made either before the course or since the course was completed. An additional 22% plan to make the changes within one year. To us, this shows that tasks which were not completed during the course are less likely to be completed in a timely manner afterwards. Sixty-four percent reported making specific changes to their businesses as a result of the course, including keeping more detailed records, improving networking, improved use of social media and the internet, increased insurance coverage, simplifying the business, taking on partners, changing boarding policies, seeking out new business rather than waiting for it, and deciding to invest in facilities updates.
Second Follow-Up Evaluation
The second follow-up evaluation was completed in September 2014 and we received responses from 52% of course participants. One and a half years after the course, 71% of respondents reported completing the actions listed above either before the course or since the course was completed. Two respondents reported still not having completed a business plan, while others are updating theirs regularly. When asked about the effects the course has had on their businesses, answers included higher profits due to raising board prices, expanded partnerships, restructured insurance and liability, increased efficiency using ideas learned in class, and several students networked with each other to find mutually beneficial arrangements regarding their businesses.
Three of our participants closed their businesses after the class. One specified that after completing the financial review and SWOT Analysis, she realized it was not financially feasible to own a barn, so she sold the farm and boarded her horses instead. This is one of the big problems in the equine industry; often amateurs buy farms for their personal horses with the intent to board a few horses and run a small business without running financials and find that they lose money. While it may seem counterintuitive, we are happy to see that our participants are leaving ventures that are not sustainable.
Workbook
We also collected evaluations on the 26 workbooks that we sold. Fifty percent of those contacted responded. Of those people, 61% reported not having read the workbook yet. Only 1.5% (two people) reported reading through the entire book and either making changes to a business or planning to open a new one. Of those who did not read the book, they cited reasons such as illness, life changes, or simply plans falling through as reasons. One participant bought the workbook as a training tool for Pony Club children, while another plans to implement a similar class in a horse racing-heavy part of another state.
Education & Outreach Activities and Participation Summary
Participation Summary:
The first publication is the Equine Business Planning Workbook, a 100-page binder with detailed information on how to write a business plan specifically for the equine industry (attached and hard copy being sent in mail). We presented a poster about the project at the 2014 Rutgers Cooperative Extension Annual Conference on October 20, 2014 (attached). The audience was New Jersey Extension agents, specialists, and staff.
Currently, a Rutgers Fact Sheet is being drafted to summarize the contents of the workbook. It will summarize the key points of each section in approximately 4 pages to be more easily read by equine business owners, and it will contain information on how to order a copy of the full workbook for more detailed information. Additionally, a Journal of Extension article is being drafted to document how we put together this new course and the results of evaluations.
We also plan on submitting an application to present this project at the 2015 Extension Risk Management Education National Conference when the call for presentations and posters is issued in late November.
Project Outcomes
- Quantified the opinions of the New Jersey equine industry towards business planning, understanding barriers and motivators to writing plans.
- A detailed, step-by-step workbook with examples was developed to walk horse business owners through writing a business plan. After being used in the course, the workbook was improved based on feedback for wider distribution.
- 31 horse business owners/managers were trained in business planning and an additional 26 more received training materials.
- A framework for a business planning class was created and successfully executed with high ratings from participants and easy adaptability for other states.
Potential Contributions
More equine business owners writing business plans means more stable and thoughtfully-crafted ventures in the industry. With so many external threats to our industry’s viability right now, this is one way to boost the industry’s sustainability. As more equine business owners take the time to carefully analyze their operations, the industry as a whole becomes more stable.
Additionally, we have created a framework to share this educational material with any region in the country. While New Jersey and the Northeast are very different from other areas, a business plan requires the same basic layout regardless of location. The workbook can easily be adapted to be more relevant to different areas, and the course syllabus provides an easy-to-recreate agenda with local presenters and experts. Our team has already been contacted by another state wishing to produce a similar program.
Future Recommendations
The course itself must be sustainable- the grant provided funds for one iteration, but we are experiencing demand for another session. While charging for purchase of the workbooks outside of the course could help, working this into a university’s Continuing Education department may be another solution.
The course could also be adapted into a college course (online or hybrid) or part of a course for equine business or management students.
Based on follow up evaluations ranging from 4-10 months after receiving a workbook, we appreciate the value of holding a class over simply distributing materials. Most workbook recipients have not yet read it, while nearly all of the course participants have at least a partial business plan written.
Even when participants knew to expect the follow-up evaluations, the number of responses we received were much lower than expected. While the response rate averaged about 55%, we hoped for more since the participants knew to expect the evaluations and they were contacted several times through email and telephone. A more effective way of collecting long-term impact data is needed.