Horse Business Glossary
The Horse Business Glossary is a collection of business- and equine-related terms you will need to know if you want to succeed in this industry. I’ll continually add to each alphabetical section with new terms, some of which might seem self-explanatory. However, I want to make sure all horse business owners are as equipped as possible for the challenges they face.
Abbreviations:
Inf. Informal usage
q.v. quod vide, defined elsewhere
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
A
Abortion Storm: An epidemic of several spontaneous abortions among mares who are stabled or pastured with one another. The culprit is often a virus, such as rhinopneumonitis, that has passed from one horse to another.
Abrasion: A term used by veterinarians and horse owners to describe a scrape on the surface of a horse’s skin. This is not typically considered a serious injury, and it can usually be treated with hydration (q.v.) and antibiotic ointment.
Absolute Dry Matter: The portion of remaindering feed when all water content is extracted from it. Horse business owners often use this calculation to determine the quality of feed they give their horses.
Accelerated Depreciation: A concept applied to items that depreciate at a higher rate during their primary years of use than in later years. Cars are a prime example of merchandise to which accelerated depreciation applies. Farm equipment, tack, and other merchandise can also depreciate faster during the first few years (or even months) of use.
Account: A contract or agreement with another party to conduct business. Horse business owners have accounts with boarders, riding lesson students, horse training clients and other customers. Anyone who provides you compensation in exchange for a product or service has established an account, whether one-time or ongoing.
Account Balance: The amount owed on an account with a client or customer. For example, if you are owed $200 for Susie’s riding lessons, and Susie’s Mom has only paid $160, there is a $40 account balance. (See also: Outstanding Balance)
Accounts Payable: The amount of money a horse business owner owes to other individuals, such as hay and grain suppliers. Your accounts payable books should reflect monies for products or services you have already received, but for which you have not yet remitted payment.
Accounts Receivable: The amount of money a horse business owner is owed for goods or services that have already been delivered or performed. This is different from individual accounts because the sum totals all of the accounts on the books, rather than an individual client.
Accredited: Refers to a process by which a business is declared competent and credible by an overseeing third party. Educational institutions, for example, can receive accreditation, as can laboratories and health care facilities.
Acid Brand: An identifying mark permanently rendered in a horse’s flesh with an acid, such as hydrochloric acid.
Acquisition: The process of acquiring a horse business. Acquisitions result when one company completely takes over another, absorbing its assets, brand, and other aspects. (See also: Merger)
Acre: A unit of measurement to describe a section of land that covers 43,560 square feet. An “acreage” is a collection of acres of a certain size. When you buy property for your horse business, you will want to search for a specific collection of acres, or an acreage.
Action: The particular way a horse moves. A horse with strong knee action, for example, lifts his knees higher than normal during movement. Horse dealers and sellers may have to describe the action of a horse to potential buyers.
Active Income: For U.S. tax purposes, income derived from an existing business for products or services. This is differentiated from passive income, which is earned through royalties or other passive means.
ADA: Americans with Disabilities Act. Horse business owners must make sure they are in compliance with this act to avoid lawsuits and fines.
Administrative Tasks: General office tasks performed to keep your horse business running. They might include filling out and sending invoices, recording payments sent and received, updating your schedule, or filing contracts. Horse business owners must dedicate a portion of each day to accomplishing administrative tasks.
Adventitious Marks: White hairs that grow over a horse’s skin because the skin has lost pigmentation due to external trauma. This often happens with injuries due to repetitive contact with a foreign object, such as straps or girths. Horse business owners should note adventitious marks on their horses for purposes of sale or registration.
Advertising: The process of bringing your horse business to the attention of the general public with the goal of attracting new buyers or investors. Print, radio, and television advertising are the most common forms, though this can also refer to word-of-mouth publicity.
Algae: A plant infestation of a horse’s drinking water that results when the bucket, basin, or trough is not cleaned regularly or sufficiently. Although algae is not necessarily harmful to horses, it is important to clean the items the horse drinks or eats from on a regular basis.
Alternative Dispute Resolution: The horse business can be dangerous, and therefore horse business owners often find themselves the targets of lawsuits and other legal problems. Alternative dispute resolution, or ADR, is a method of solving a legal action outside of court. Mediation and arbitration are examples.
Appraisal: A valuation of the worth of a particular property, object, or animal. Appraisals can be necessary for a variety of purposes, including insurance and sale. (See also: Appraisal)
Appreciation: The increase in value over time of a piece of property or merchandise, usually related to economic fluctuations or to other factors outside the control of the owner.
Apprentice: An amateur equestrian professional who seeks to learn his or her chosen trade from a veteran or expert in the business.
Articles of Incorporation: Official legal document that establishes regulations for an incorporated business. The laws and requirements vary, and it is a good idea for horse business owners to seek the counsel of an attorney to help prepare the Articles.
Artificial Insemination: The mechanical process of fertilizing a mare with semen introduced to her genital tract through artificial means. This is the opposite of a “live cover,” in which a stallion and mare are bred through traditional means.
Asset: An item of value. It could be an object or piece of merchandise, such as a saddle; an animal; a piece of property; or even monies owed from accounts on the books.
Asking Price: The amount of money the seller would like to receive for an item or animal for sale. The asking price is sometimes a starting point for negotiations. A “firm asking price” is one for which no negotiation is possible.
Auction: An event during which animals or merchandise are offered for bidding by attendees. The customer who offers the highest price takes the item for sale. Horse auctions are notorious for drawing horse meat manufacturers, and there is often little opportunity to evaluate the health and abilities of a horse at an auction.
Audit: The examination of accounts payable and accounts receivable of a business, as well as tax preparation and other financial matters related to the business. An audit is usually conducted to find mistakes or intentional omissions in the books.
Avoided Cost: The amount of money saved by investing in a product or service that prevents a future cost from being incurred. An example would be paying for regular maintenance on farm equipment so you don’t have to replace expensive parts or the entire machine down the road. The avoided cost is what it would cost to conduct those repairs or buy a new tractor.
B
Barter: The process by which two parties exchane merchandise or services rather than paying one another in currency.
Bad Debt: A debt that you are unable to collect from the person or entity that owes you. If a client declares bankruptcy while owing you for back boarding, for example, the amount owed might be considered bad debt.
Back Pay: Also called “retroactive pay,” an amount owed to an employee of a horse business for work performed in the past. This usually happens when paychecks are calculated incorrectly or when a payroll administrative error occurs.
Balanced Budget: Usually refers to a cash-positive situation in which all the expected expenses for a certain fiscal period can be satisfied with projected income/earnings levels.
Balance Sheet: This is a document that lists all of a horse business’s assets and debts.
Bankruptcy: When a horse business is unable to satisfy existing debts and continue operating, it might be necessary to declare bankruptcy. This effectively dissolves the business and uses all assets to repay debts owed.
Barefoot: A veterinary and farrier term referring to horses that live without shoes. Also known as “unshod.”
Barrel Racing: A speed event in equestrian sports in which a single horse and rider runs a clover-leaf pattern among four barrels. Riders and horses are judged on speed. This is a common rodeo event.
Barn: A structure in which horses are stabled. Some horse business owners build several barns, while others construct a single large barn. Single barns can also be used to house stallions, mares in foal, quarantined animals, and other subsets of horses on the property.
Bedding: The material used to line the base of a horse’s stall. Bedding can consist of shavings, straw, and other materials, and should be changed on a regular basis (every few days).
Benchmarking: An effective means of comparing the products and services of a horse business against those of its largest or most successful competitor. Horse business owners can use benchmarking to improve the quality or variety of their products and services to exceed industry standards.
Bill of Sale: A legally-binding document that expresses the terms and conditions of a sale between buyer and seller. A bill of sale is used in the trading of horses, farm equipment, property, and anything else that is sold.
Bloodlines: The ancestral lineage of a horse. Bloodlines are recorded for registration purposes and to establish parentage. In some cases, bloodlines can make a horse more valuable simply because of what horses in his lineage accomplished.
Boarding: Keeping a horse at a place other than the owner’s home or property. A boarding stable often offers a stall and/or paddock as well as other amenities, such as feeding, turning out, and blanketing.
Boarding Contract: A legal document setting forth the terms and conditions of a boarding agreement. It will include the payment requirements, the amenities provided, and any other details the horse business owner wishes to include.
Bottom Line: An informal financial term referring to the net earnings or income of a horse business. If your expenses exceed your bottom line, you are said to be operating “in the red” or below your break-even point.
Box Stall: A large stall intended for one-horse occupancy. Common sizes are 10′ X 12′, 12′ X 12′, and 8′ X 8′.
Branding (business): The process of creating a unique set of identifiers for a horse business. Branding can include business philosophy, logos and trademarks, customer service and a wide variety of other aspects of business.
Branding (horse): The practice of rendering a symbol in the flesh of a horse for the purpose of identifying the animal’s owner. Hot brands, freeze brands, and acid brands are all common methods.
Breach of Contract: A legal term that describes a situation in which one party renders a contract null and void by failing to fulfill some aspect of the agreement.
Break-even Point: The point at which a horse business begins generating a profit. If a business is operating “in the red” (i.e. debts exceed income), it is operating below the break-even point. If income exceeds expenses, the business is above the break-even point.
Budget: A recorded allocation of funds to certain expenses. A horse business must operate within a budget to survive. Money is allocated for utilities, grain, hay, employee salaries, and other expenses. Most budgets are calculated on a monthly basis.
Business Bank Account: Horse business owners can open bank accounts in the name of the business. A business bank account is differentiated from a personal account, and may be managed by more than one person (e.g., in a partnership).
Business Plan: A document expressing the intentions of a horse business owner with regard to business structure, marketing, advertising, products, services and other aspects. (Get more information about horse business plans).
By: A word referencing the sire or father of a horse. (See also: Out Of)
C
Capital: The amount of money available for investment or spending. For example, if you need a new truck for your horse business, you can buy with available capital or secure an auto loan.
Cash Flow: The rate or method by which money flows into and out of a horse business. Cash flow is often erroneously used to represent earnings or income, but it is actually a two-way street.
Cavalletti: Poles on the ground or raised by small stands on either end that horses walk, trot or canter over, either singly or in a line.
Certified Riding Instructor: A riding instructor who has been certified through a recognized governing body in the horse industry. The American Riding Instructor Association (ARIA) and the Certified Horsemanship Association (CHA) are examples.
Chain Twitch: A device used to clamp down on a horse’s muzzle for the purpose of controlling him or keeping him distracted. Controversial.
Chamber of Commerce: An organization, frequently centralized to a specific geographical area, of which horse business owners can be members.
Chest Bar: A rubber, metal or plastic bar used to keep a horse in place in a stall, stocks or trailer.
Client Base: The group of consumers to which a horse business is accountable. A client base is made up of people who have purchased products/services in the past, are purchasing in the present, or will purchase in the future.
Client Retention: The ability for a horse business owner to retain the business of a customer or client over a long period of time. This is especially important for the horse business because most services tend to be ongoing, so clients moving to other service providers means a lapse in customer service.
Clinic: An instructional event during which a recognized and experienced professional teaches a group of clients a specific skill set. For example, Charles de Kunffy gives dressage clinics all over the United States.
Coggins Test: A diagnostic tool used to determine whether a horse is infected with Equine Infectious Anemia (EIA). A Coggins test is usually required for a horse to be transported anywhere, such as to a horse show, and in some states is required to cross the border. The Coggins test was developed by Dr. Leroy Coggins in the 70s.
Collateral: Something of value, such as property or a vehicle, that is offered to ensure repayment of a loan.
Commission: A percentage of the total sale price of a horse or a piece of merchandise that is given to a third party who facilitated the sale. Standard commissions are usually between 10 and 15 percent.
Confidentiality Agreement: A contract between two or more parties in which each party promises not to disclose certain information regarding a business transaction or partnership. (See also: Non-disclosure Agreement)
Consignment: The process of offering something for sale through someone else. Horses are often sold by consignment when a horse owner asks an equestrian professional to facilitate the sale. A commission (usually 10-15 percent) is offered to the professional in exchange for their assistance and expertise.
Consultant: A private party professional who provides advice, guidance, and structure to a business or business department. Horse business owners might use a consultant to assist with program development, for example.
Continuing Education: Taking classes or courses beyond a single degree or certification in an attempt to keep abreast of changing trends, technology, and methods in the horse business.
Contract Employee: See Independent Contractor.
Cooler: A special blanket put on horses to help them cool down gradually after a workout or a bath. They are most frequently used during cool and cold weather.
Corporation: A business structure wherein a charter is granted so that the business can be recognized legally and financially as an exclusive legal entity, separate from its owners.
Co-Sourcing: When work at a horse business is performed by both internal employees and external service providers. An example of co-sourcing would be a horse show in which the competition is managed by the farm, but specialty tasks—such as judging or stewardship—are performed by an outside individual. (See also: Outsourcing)
Cost of Borrowing: The direct and indirect costs associated with borrowing money from someone else. Examples include interest and amortization fees.
Credit: The borrowing of money to pay for products or services prior to actually remitting money. Credit cards and lines of credit are examples, though a particular business or entity can also extend credit to specific customer.
Creditor: An individual or entity that lends money to another individual or entity. Creditors for a horse business might include credit card companies and mortgage companies.
Crisis Management: The process by which horse business owners handle an event which changes a significant aspect of operations and requires immediately (time-sensitive) attention. If you were to discover that one of your clients was stealing at your barn, for example, crisis management would be necessary because 1) You would need to change (adding security to your facility, providing better locks for tack); and 2) You would need to react swiftly (so that no more tack disappeared).
Curriculum: A guideline for teaching a particular subject or concept, such as riding instruction. It consists of elements such as step-by-step instructions for explanations, directions for activities, and materials used in the teaching process.
Customer Satisfaction: The degree to which customers are pleased (or displeased) with a horse business and their products/services. Customer satisfaction can be ascertained in a variety of ways, from surveys to anonymous feedback requests.
Customer Service: The interaction between customers and horse business owners during a transaction, whether abbreviated or ongoing, with the business owner attempting to increase the customer’s level of satisfaction.
Cutting: An equestrian sport in which a single rider must separate a calf from its herd and keep it separate for a specified period of time. Riders are judged on precision and style.
D
Daily Energy Requirement: The amount of calories a horse requires to maintain weight and overall health. The DER can change for a number of reasons—if a mare is pregnant or lactating, for example.
Dam: The mother of a horse. (See also: Sire)
Debt: Money that a horse business owner owes or that is owed to the owner. You can accumulate debt by borrowing money (e.g., loans), using a credit card, or running a tab. You can also extend credit, which puts other people in debt to you.
De Facto: A legal term frequently found in contracts and other forms that describes something that is true but not officially recognized. A de facto owner, for example, is someone who owns a piece of property but does not possess any paperwork to that effect.
Default: To fail to make payments as agreed between buyer and seller (or consumer and creditor). One of your clients might be in default, for example, if he fails to pay for riding lessons received.
Depreciation: The decline in value of an object over a period of time due to economic fluctuations, changes in supply and demand, or other external factors.
Digestible Protein: The usable protein nutrients found in horse feed. Used to compare grain, oats, and other feeding options in the horse business.
Direct Selling: A salesmanship method that requires the buyer and seller communicate face-to-face. This is often used in reference to door-to-door or business-to-business marketing.
Disaster Planning: The process of preparing a horse business for a natural disaster or other untoward occurrence. Planning escape routes, posting contact numbers, and establishing safe places to go in an emergency are all part of disaster planning.
Disposition: The personality of a horse. Disposition usually characterizes the ways in which horses interact with one another and with humans.
Dissolution: The process of dissolving a business or part of a business. A dissolution plan describes what will happen in the event the horse business is shut down.
Distributor: An individual or entity responsible for distributing products to consumers. The business that sells you horse feed, for example, might be a distributor of certain brands of grain, oats, or other products.
D.M.S.O.: Abbreviated term for dimethyl sulfoxide, which is applied to the skin of horses to reduce inflammation. It also acts as an antibacterial and analgesic solvent.
Dressage: An equestrian event in which horse and rider work together to perform a pattern in a dressage arena. Emphasis is placed on roundness, impulsion, precision, horse-rider communication, and a host of other factors.
E
Earnings: Positive cash flow (q.v.). Earnings describe the amount of money coming in to a horse business. (See also: Profit and Income)
E-Commerce: The practice of selling products (and sometimes services) over the Internet.
Effective Date: A date written in a contract or agreement that determines when that contract becomes legally binding. For example, in a boarding contract, the effective date is usually the date on which the horse is moved into the stable. (See also: Termination Date)
Efficiency Metrics: The calculation of how a horse business uses its resources. Accounts receivable are often measured using efficiency metrics, as is asset turnover.
Egg-Bar Shoe: A horse shoe that is oval-shaped with a bar running underneath the heel. This type of shoe is common among horses with flat soles or navicular disease.
Elimination: Disqualification of a competitor in an equestrian competition for violating a written rule of said competition. For example, a rider is eliminated in dressage if her horse steps outside the dressage arena.
Employee: An employed individual. Employees are paid on a specific date by their employers and taxes are removed from their paychecks. They usually have set hours to work and may be eligible for benefits. (See also: Independent Contractor)
Employee Turnover: The rate at which employees must be replaced in the horse business. High employee turnover means that employees stay less time with a specific business and must be replaced at a greater rate. Low turnover is desired in most industries.
Entry Fee: The fee required for a competitor to enter an equestrian competition.
Equal Opportunity: A philosophy and policy that requires horse business owners to make hiring decisions based on the fact that all applicants are equal in terms of race, gender, nationality, religion, disability, sex. It also requires horse business owners to not disqualify an applicant based on a disability. Equal opportunity is not only a sound business policy regardless of industry, but also a law in most jurisdictions.
Equestrian Center: Inf. An equestrian facility that offers numerous amenities and caters to a wide variety of potential clients. Most equestrian centers are both boarding facilities and competition venues.
Equine Acquisitions: The purchase of horses either singly or in large numbers.
Equity: The percentage of an asset that is wholly owned by an individual or horse business. For example, if you have purchased land worth $100,000 and you’ve paid of $50,000 of it, you have 50 percent equity in the land. Equity can also be expressed as a dollar amount (e.g., $50,000), or refer to the percentage of a business you own with partners or shareholders.
Ethics: A set of rules, guidelines, and expectations set forth by a company or individual regarding acceptable and unacceptable behavior and actions. Ethics can be written or unwritten.
Eventing: Also called combined training, an equestrian sport which tests riders’ abilities in three main events: Dressage, cross-country jumping, and stadium jumping.
Exhibition: An equestrian event that is designed to showcase a particular horse breed or discipline. Performances rather than competitions are common in exhibitions, and there is often an auction (q.v.) or sale involved.
Exit Interview: An interview conducted between a horse business owner and an employee (q.v.) just before (or directly following) that employee’s departure from the business. It is used to ascertain the reason for the employee’s departure and to glean any bits of information that might assist in future employee retention.
Exit Strategy: A plan for the dissolution of a horse business. It includes details like who will be responsible for outstanding debts, who will keep property, how property will be disposed of, and more. It is essential for any business with more than one owner or stakeholder.
Expenditure: The amount of money set forth for the purchase of goods or services.
Expense: The amount of money spent in operating a business or selling products. Operating expenses, for example, include things like utilities and payroll.
External Funding: Money used in the operation of a horse business that comes from outside the company. Loans (q.v.), investors, and lines of credit (q.v.) are all examples of external funding.
F
Family-owned Business: A horse business owned and operated within a family.
Fiscal Year: Refers to the financial or budget year, and is used to prepare annual income statements (q.v.). The fiscal year begins on October 1 in the United States.
Farrier: Also known as a blacksmith, a farrier is a professional trained in the care of horses’ hooves. They put new shoes on horses, trim hooves, help correct movement problems, and remove old shoes. They often work directly with veterinarians to solve gait and structural problems involving the hooves and legs.
Fox Hunting: An equestrian sport in which riders in a group of riders chases after a fox (or facsimile of a fox) with a pack of scent hounds. They often move quickly, jumping common obstacles found in the field.
Futurity: An equestrian competition and exhibition specifically designed for young horses. In some cases, horses must be nominated for entry, and they must usually be registered. Quarter Horse futurities are especially common. (See also: Exhibition)
G
Gelding: A castrated male horse over four years of age. (See also: Stallion)
General Partnership: A business structure in which two or more people are equally invested in and responsible for the business. In some cases distribution among partners is not equal, but precise percentages must be established to determine investment and profit.
Generic: A product, especially a drug, that is less expensive because it is not manufactured by a brand-name company.
Grant: A sum of money or object of value that is given to an individual or entity with no expectation of repayment. In most cases, grants are distributed by governments and organizations.
Gross Profit: The amount of money earned before costs of doing business, such as taxes or fees, are deducted. The net profit (q.v.) is the earnings minus the deducted expenses.
Grounds Fee: An expense commonly required for horse show registration that is intended to offset the operational costs of maintaining the facility (“grounds”) during the event.
Guarantee: In business, a leverage tactic that provides a buyer reassurance in the event a product does not work or does not satisfy. Horse business owners should be careful about offering guarantees for client satisfaction. (See also: Incentive Program)
Guarantor: An individual or entity that agrees to pay back a loan (q.v.) if the borrower is unable to fulfill his obligations. Also known as a Cosigner or Cosignatory.
Guerilla Marketing: A marketing technique wherein a horse business attempts to increase its favor among potential clients by harming the reputations of competing businesses.
H
Hack: Inf. To ride a horse with no particular training purpose in mind; to ride for pleasure.
Hard Sell: A sales technique characterized by high-pressure tactics designed to browbeat the customer into purchasing. Can also be manipulative.
High-End: A product that is considered better than average, perhaps due to the brand name on the item. Always more expensive; may or may not denote higher quality.
Horse Business Amenity: Any perk or benefit a client derives from becoming a client of a horse business. This can include simple benefits, such as access to arenas and wash stalls, to more elaborate benefits, such as access to Olympic-caliber trainers or use of extensive trails.
Horse Rescue: The act of saving a horse from slaughter, abuse, or neglect. Horse rescue farms take in many rescue horses and provide them with food, water, shelter, and medical care until they are able to be re-homed.
Horse Trainer: Someone who makes his or her living training horses. Some trainers work only with their own horses, while others accept clients. There are numerous horse training specialties, and some trainers align themselves with particular equestrian philosophies, such as natural horsemanship or centered riding.
Human Resources: The function of a business dedicated to managing employees (q.v.) and independent contractors (q.v). Although a horse business might not have an HR department, there must still be human resources policies in place to protect and provide for workers.
Hunter: An equestrian sport in which horses are judged on fluidity and balance of movement, consistency, finesse and other qualities, either over fences or on the flat. Hunter-over-fences classes usually involve straight-forward obstacles set in three- and four-stride lines.
Hydration (thirst): To entice a horse to drink more water because he or she suffers from dehydration. Can also apply to any other living thing.
Hydration (injury): The process of treating an equine injury with a stream of water to help lower swelling and clean the wound. Inf. ‘to hydro an injury’.
HYPP: A genetic disorder that manifests in both human beings and in equines. It is most common in the American Quarter Horse and related breeds. The AQHA now requires that foals testing homozygous for the gene are not able to be registered.
I
Incentive Program: A set of offers and promotions offered by a horse business to convince new or existing clients to buy. The goal of an incentive program is to offer more than the usual product/service to increase enthusiasm. Often time-sensitive.
Income: Positive cash flow; the amount of money earned by a horse business owner or individual equestrian professional. (See also: Earnings and Profit)
Income Statement: A financial document detailing the positive and negative cash flow (q.v.) of a horse business. Usually completed at the end of the fiscal year (q.v.).
Independent Contractor: An individual who works for a horse business on a contract basis. The independent contractor may or may not have set hours, and taxes are not removed from his or her paycheck. They might run their own businesses, and many work for several employers at once. (See also: Employee)
Insurance: A financial product designed to protect investments. Horse business owners need insurance for workers, themselves, their property, and their animals, the most important of which is liability insurance.
Inventory: The goods a horse business owner maintains in stock. Although most horse businesses are in the business of services rather than goods, many equestrian professionals sell products—such as supplements, tack, and equipment—as well. It is important to keep track of inventory.
Investment Horse: A horse purchased for the purpose of re-training or polishing and re-selling. The horse is bought for future profit rather than for pleasure or competition.
Invoice: A document or notice sent to a customer as a demand for payment. Invoices are the best way for horse business owners to remind their clients that money is owed. (Download a free invoice template)
J
Joint Account: A horse business bank account (q.v.) that is held by two or more people. All persons included on a joint account have access to the funds therein.
Joint Ownership: A horse business that is owned by more than one party, either in equal or differing shares.
Junior: In equine competition, a junior is a competitor under the age of majority (usually 18). In most cases, juniors and seniors compete in separate classes or events. (See also: Youth)
K
Kiting: When an individual or business drafts a check for which there is insufficient money. Check kiting is a problem for all horse business owners because, if a customer pays you with a bad check, you will incur fees (and loss of income) as a result. This is one reason why many equestrian professionals have begun accepting credit/debit card payments.
L
Lameness: Any condition of the horse’s body that causes him or her to be unable to travel correctly on all four hooves. Lameness may or may not appear to be limping. (See also: Soundness)
Lease: An arrangement wherein the owner of a horse allows someone else full or partial access to the animal for riding, grooming, competing, and other activities, in exchange for monetary compensation.
Lemon: A defective product. Usually used to describe a motor vehicle that does not operate.
Lesson Horse: See School Horse.
Lesson Plan: A document prepared by a riding instructor prior to the start of a riding lesson. Riding lesson plans help keep riding programs organized and goal-oriented.
Liability: The obligation of a horse business owner to make good on a debt. The levels and complexities of liability are numerous, and it is important for equestrian professionals to work hard to limit their liability, by following the law and by establishing safety guidelines for employees and clients.
Liability Waiver: A legal document used in the horse industry to decrease or eliminate the liability of the horse business owner in the event of an accident. A client or visitor signs a liability waiver to assume responsibility for whatever happens to him or her “resulting from the inherent nature of equine activities.” (Download a liability waiver)
Limited Partnership: A type of business structure akin to the general partnership (q.v.) in which certain partners are limited in their ownership by the amount they invested in the company.
Line of Credit: A form of loan in which the consumer or business is given a limit to how much money they can borrow from a lender, then given the freedom to take what they need, when they need it. This is different from a loan because a lump sum is not given to the borrower up front.
Liquidity: The measure of a horse business’s assets (q.v.) that can be automatically converted to cash (or already exist in cash form).
Live Cover: The breeding of a mare and stallion in controlled circumstances. There is still some risk of injury to either the mare or the stallion, which is why artificial insemination is an increasingly popular alternative.
Loan: The lending of money from one person or entity (lender) to another (borrower).
M
Management: A person or group of people responsible for overseeing the work of other employees in the horse business. A stable manager, for example, is often in charge of assigning duties to other staff members, such as horse trainers or stable hands.
Marketable: A product or service that is commercially viable in the current market.
Market Research: The process by which a horse business owner learns about potential clients and competitors. (Learn more about creating a market analysis section of your horse business plan).
Market Value: The price of a product or service that will still allow it to compete in the current marketplace.
Mediation: A form of alternative dispute resolution (q.v.) that allows two or more parties to come to an agreement on a dispute in a relaxed, amicable environment.
Merger: Combining two businesses into one. This is similar to a partnership, and usually occurs when two business owners decide they would be stronger if they merged their businesses. (See also: Acquisition)
Mission Statement: An outline of the purpose of a horse business, including how it plans to fulfill its vision. (See also: Vission Statement) (Learn how to write your horse business mission statement)
Mystery Shopping: A quality-control process during which a third party poses as a client or customer to evaluate the staff of a horse business. This can help to identify weaknesses in customer service.
N
Negotiation: The process of agreeing upon a price. In most cases, negotiation is a back-and-forth process that might be handled by an intermediary (e.g., a real estate broker) or by the parties themselves.
Net Profit: The amount of earnings or income minus any fees or taxes that must be deducted from the gross profit.
Net Worth: The value of a horse business.
Niche: A narrow cross-section of a given market. This is the group of consumers to which your product/service is most suitably marketable (q.v.). For example, a horse business niche might be high-level competitors.
Non-compete Agreement: A non-compete agreement, clause, or addendum is a contract between two or more parties that limits one party’s right to obtain work within a specific industry in a specific geographical range.
Non-disclosure Agreement: A legally-binding contract that limits one or more people from disclosing the details of a business transaction or project. (See also: Confidentiality Agreement and Trade Secrets)
Non-recurring Expense: An expense (q.v.) that is incurred only once, never to be repeated (at least in the foreseeable future). An example might be a major repair to a vehicle.
O
Operating Costs: Expenses associated with the running of a horse business. They might include payroll, utilities, grain, hay, equipment, maintenance and a host of other costs.
Out Of: A phrase referencing the dam or mother of a horse. (See also: By)
Outsourcing: When horse business duties are performed by an outside individual or entity. An example might be a clinic or seminar where a third party is invited and paid to facilitate the event. (See also: Co-Sourcing)
Outstanding Balance: The amount of money still owed on an active account. (See also: Account Balance)
P
Partial Board: An arrangement between a horse business owner and a horse owner wherein the horse owner pays for part of his or her horse’s board and does the rest of the work him- or herself. For example, the horse owner might pay the farm to feed and turn out his horse, but muck the horse’s stall himself.
Pasture Board: A form of equine board wherein the horse is housed in a paddock or pasture (usually with a small three-sided shelter) rather than a barn or stable. Usually less expensive than full or stable board.
Patent: Rights granted to an individual or entity by the government for a product that has been invented by the asignee.
Pole Bending: An equestrian sport in which riders maneuver their horses in a weaving pattern between poles placed perpendicular to the ground. Riders and their horses are judged on speed and their ability to avoid touching the poles during the serpentine.
Pre-Purchase Exam: An examination conducted by a licensed veterinarian prior to a horse being purchased. The vet looks for any health issues or abnormalities that the buyer should consider. In most cases, vets will not make a recommendation for or against buying the horse, but will simply give the buyer all the facts.
Press Release: Also called a news or media release, a press release is a statement given by a horse business owner that makes some sort of announcement. Situations that might warrant a press release include acquiring a new horse or placing in a competition, so long as something about those events makes them newsworthy.
Profit: Positive cash flow, usually calculated after expenses, taxes, and other costs of doing business are deducted (net profit). Gross profit is the amount of money earned before those deductions. (See also: Earnings and Income)
Program Development: The process of building and organizing programs for a horse business. Riding lessons, summer camps, horse training, clinics, seminars, and trading are all aspects of the horse business that might require program development.
Promotion (business): A special marketing or advertising initiative intended to draw new customers to a horse business. It might involve a discount or special inclusive offer that is available for a limited time.
Promotion (employee): To increase the responsibilities (and sometimes the salary) of an employee by elevating his or her status in the horse business. A promotion can be given toward an existing position or a new position can be created for the employee. For example, a riding instructor might be promoted to head riding instructor, and given the responsibility of managing all the other teachers at the facility.
Q
Qualified Professional: An equestrian professional who possesses the necessary credentials and educational background to perform the services in his or her area of expertise. The definition of a qualified professional is not concrete in most areas of the horse business.
R
Reined Cow Horse: Also called working cow horse, an equestrian event that combines many qualities of cutting and reining into a single event, during which riders cut a cow from its herd and perform a reining pattern.
Reining: An equestrian sport that involves riding a pattern that includes movements such as roll-backs, slides, circles, flying changes, back-ups, and spins. Riders are judged on the precision and finesse of their patterns.
Retirement Plan: A financial instrument which is designed to provide workers with income after they are no longer able (or no longer desire) to work. Pensions, 401(k)s and Keogh plans are all examples. The Keogh is often most appropriate for horse business owners because it is designed for people who are self-employed.
Retirement Planning: The process of preparing oneself financially for retirement. This might involve restructuring pensions, making new investments, and budgeting expenses.
Rider Sponsor: An individual or business that invests in the career of an equestrian competitor. They might provide a specific amount of money, purchase equipment, or otherwise contribute to the expenses incurred by the rider.
Riding Horse: An equestrian competition in the UK where horses are judged on conformation, movement, and manners. The competition has aspects in common with dressage, saddle seat and hunters.
Riding Instructor: A professional who teaches children how to ride and work with horses. Duties and specialties vary significantly within the profession, and may include teaching horsemanship, running summer camps, sponsoring clinics, and other responsibilities. Some riding instructors specialize in specific age ranges of students, specific disciplines, or specific riding abilities.
S
Saddle Seat: A style of riding and equestrian competition that places emphasis on exaggerated action and the high trot of certain breeds (e.g., National Show Horse, Morgans, American Saddlebreds, Friesians).
Safety Evaluation: A comprehensive evaluation of numerous aspects of safety protocol at a horse business.
School Horse: A horse used primarily or exclusively in riding lessons for students who do not own their own horses.
Schooling Fee: Money charged to competitors in an equestrian show by riding instructors or trainers who will assist the competitor in preparing for the event.
Schooling Show: An informal equestrian competition, commonly held for just the clients of a single facility, that often includes fun games as well as serious events or classes. (Learn more about schooling shows.)
Seasonal Employee: See Temporary Employee.
Senior (horse): The term given a horse of advanced years. There is no set guideline for determining when a horse becomes a “senior,” but when animals move into their teens they often require special supplements, feed, and training schedules.
Senior (human): In equine competition, a competitor over the age of majority (usually 18 years of age). Juniors and seniors are typically kept separate for the purpose of fair competition.
Show Jumping: An equestrian sport in which horse and rider must jump a course of obstacles. The event is judged on speed as well as the ability of the horse to avoid knocking any poles on the jumps.
Sire: The father of a horse. (See also: Dam)
Sole Proprietorship: A business structure wherein only one person is considered the owner of the company, and is therefore responsible for the business.
Soundness: The condition of a horse that is sound of body, meaning that he travels correctly and comfortably on all four legs and hooves. (See also: Lameness)
Speed Events: See Barrel Racing and Pole Bending.
Stable Management: The organization and running of a stable in a horse business. This includes feeding horses, turning horses out, cleaning stalls, maintaining equipment, and a variety of other tasks. There might be one person in charge of stable management or several.
Stallion: An un-castrated male horse over four years of age. (See also: Gelding)
Stud Horse: A stallion of reproductive maturity who is used for breeding purposes.
Sub-prime Loan: The riskiest form of consumer loan, usually sought by consumers with credit scores under 650. A sub-prime loan often carries a higher, often variable, interest rate, as well as additional fees.
Supply and Demand: An economic principle describing the negative or inverse correlation between products/services available to consumers and the degree to which consumers desire/need those products/services.
T
Tangible Asset: An asset of a horse business that can be physically touched. This excludes liquid capital, investments, and other intangible assets, but includes things like horses, farm equipment, and property.
Temporary Employee: An employee who works for a horse business for a definitive period of time, such as seasonal work. In some cases, temporary employees can become permanent if they prove themselves over the course of a probationary period.
Termination Date: The date specified on a contract or agreement that determines when said contract will no longer be effective. For example, in a horse boarding contract, the termination date will be the date the horse leaves the stable. (See also: Effective Date)
Termination of Contract: The process of severing the agreement made between two or more parties.
Termination of Employment: The process of letting an employee go from a horse business for misconduct or some other justifiable reason.
Trademark: An identifying mark or sign that distinguishes a particular horse business’s products and/or services from those of competitors. A logo is one example of a trademark.
Trade Secret: Proprietary information collected, invented or determined by a horse business that, if leaked to the general public, could compromise their position in the marketplace. Trade secrets denote an economic advantage for the holder and are generally heavily guarded.
Turn-Out: The act of putting horses in paddocks or pastures outside their stalls for limited periods of time. Considered beneficial for mental and physical health of the animal.
U
Undervalued: Used to describe an asset that is available for sale (or otherwise appraised) at an amount lower than its actual value. This is common with vehicles, machinery and horses.
USP: Unique Selling Proposition. The USP encompasses the characteristics of a particular horse business that set it apart from the competition. It is what makes the business unique.
V
Valuation: The process of determining the value of a horse business. Several factors, both tangible and intangible, are taken into account. Valuation can also refer to the process of assigning value to an object or horse. (See also: Appraisal)
Variable Costs: Expenses that fluctuate from month to month. For example, in the horse business, grain and other equine food might constitute a variable cost if horses are moved in and out of the stable on a regular basis.
Vendor: A supplier of goods or services.
Vet Check: See Pre-Purchase Exam.
Virtual Assistant: An administrative professional who provides his or her services via phone, fax, or Internet, assisting the horse business owner remotely. This is one of the easiest and least expensive methods of accomplishing administrative work for the busy professional.
Vision Statement: A statement that defines the long-term objectives of a horse business, including the ways in which it wants its products/services to change the current world or market. (See also: Mission Statement)
VoIP: Voice-Over Internet Protocol. A communication medium that allows users to speak via telephone and share multimedia via Internet connection.
W
Western Pleasure: An equestrian sport in which horses and riders are judged on the smoothness and collection of gait, balance, and a host of other requirements. Riders perform as a group before a judge or a panel of judges.
Wet Mare: A lactating mare.
Worker’s Compensation: An insurance policy carried by horse business owners to compensate employees for their medical expenses in the case of an on-the-job accident. In taking advantage of this coverage, employees agree not to sue their employers for other damages related to the incident that caused the injury/illness.
Working Student: An individual who works part-time at a horse business while attending school. He or she may or may not be compensated for his or her time, and may or may not receive educational credit for the work.
Write-offs: A debt or asset that is deducted from taxes for a specific fiscal year. Write-offs often occur when accounts receivable are unable to be collected.
X
X: The center point of a dressage arena through which several movements are performed during each test.
Y
Youth: An individual under eighteen years of age. Many horse business programs are designed with youths in mind, and some equestrian competitions are only available to youths. (See also: Junior)
Z
Zero Balance: The condition of an account with a customer that indicates the client no longer owes any money.
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
About the Author: Laura Jane Thompson is the Chief Equestrian Officer of Riding Instructor University and the Feature writer for the horses section at Suite101. She believes that any horse business can succeed provided its owner practices smart strategy.
