Texas Horse Lawyer & Attorney : Alison Rowe Law Firm : Equine Legal Matters, Racing, Thoroughbreds : Dallas, Bryan, Texas

Every horse business should have a written business plan.  There are a couple of reasons for this.  First, if your business is a start-up, the business plan will help you reduce financial risk by realistically assessing anticipated income and expenses before the business is launched.  Second, a written and regularly-updated business plan will help you in the case of an audit by the IRS, especially if the IRS suspects that your horse business may actually be a "hobby" or that you did not actively participate in the management of the business.  Finally, a written business plan, especially if attractively packaged, can help foster good business relationships with banks, creditors, and others in the horse industry who can either send you business or help you in some other way.

Since there is really no downside to have a written business plan, I suggest that every horse business (including businesses that have been operating for a while without a written business plan) keep an electronic and hard copy of a business plan that addresses the following items:

1)  A summary of the business goals and objectives of the business;

2)  An outline of how you will attain your business goals; 

3)  A list of the types of advisers you will consult (such as horse industry mentors, accountants, and attorneys);

4)  How the business will be owned (i.e. through and entity such as an LLC, who all owns an interest in the business, the percentage interest each owner holds, etc.);

5)  How the business will be financed (i.e. where you will obtain the initial capital needed to start up the business, and the amount needed);

6)  Projected income and expenses for the next 6 months and year (be conservative...most business plans underestimate expenses and necessary capital;  also, you should avoid projecting income and expenses further out than one year as these often become meaningless due to changing conditions and strategies);

7)  The method(s) you will use to find and secure good clients (advertising, networking, shows, etc.).

There really is no "magic formula" for a good business plan, nor should it be set in stone.  Your business is your dream, and your plan needs to set out your unique and individual vision and talents.  Your business plan will act as a "road map" for your business to help you stay on course with your goals and avoid foreseeable hazards.  It should be updated and revised at least once per year, if not more often.

To help you get started, see the attached Sample Equine Business Plan, to which you can add information to fit the needs of your particular horse business.  As you can see, my sample is fairly basic.  There are a lot of sample business plans you can pull up online, and most of those are pretty complex.  One site that provides sample business plans is BPlans.com.  Do not let the complexity of others' business plans intimidate you into not doing one at all.  While more detail is better in some instances, do not put off doing a business plan just because you don't know your exact numbers or you see others putting pie graphs in their business plans.  The key here is to have something in writing that you can add to and enhance as your business grows.

• Email This
• Print
• Comments (1)
• Trackbacks

Fortunately, unlike many states, Texas does not require holders of stock breeder's liens to file suit or involve the courts in order to enforce their liens—provided the enforcement provisions in the statute are precisely followed.

If you own or stand a stallion and a mare owner does not pay for the breeding services, you have a stock breeder’s lien on the resulting foal (but not the mare) under Section 70.201 of the Texas Property Code. You may sell the foal in a public sale and apply the proceeds to the unpaid stallion fee and related service charges. Your lien remains in force for 10 months after the date the foal is born, but importantly, it cannot be enforced until 5 months after the date the foal is born.

Note: If you are in possession of the mare that was bred and the owner has not paid for board on the mare, you may also have a stable keeper’s lien on the mare and may enforce it as set forth in my previous blog entry, How to Enforce Texas Stable Keeper's Lien.

STEP 1

As soon as it becomes apparent that the mare owner is not going to pay for the breeding services, it is advisable (but not required) that you file a UCC Financing Statement putting the world on notice that you have a lien on the resulting foal (whether born or unborn at the time the debt accrues) for unpaid stallion service. The Financing Statement is best filed in both the county where you stand the stallion as well as with the Texas Secretary of State. Be sure to provide sufficient information in the Financing Statement to identify the foal (registered names and registration numbers of your stallion and the mare; date and place of stallion service, etc.) Instructions on filing the Financing Statement can be found at the Texas Secretary of State's website.

STEP 2

When the foal turns 5 months of age, send a notice of sale to the debtor.  For a form of the notice of sale, click here.

STEP 3

Sell the foal at a public sale 30 days or more after you send the notice of sale referenced in Step 2.

Note: If you are not in possession of the foal when it becomes 5 months of age, you may need to take your notice of sale and UCC Financing Statement to the sheriff’s office of the county where the foal is located and have them help you seize the foal so it can be sold.

• Email This
• Print
• Comments
• Trackbacks

Fortunately, unlike many states, Texas does not require lien holders to file suit or involve the courts in order to enforce the stable keeper's lien—provided the enforcement provisions in the statute are precisely followed.

If you are boarding someone else’s horse, the board bill is 60 days or more past due, and you still have possession of the horse, you have an enforceable stable keeper’s lien under Section 70.003 of the Texas Property Code and may sell the horse in a public sale to satisfy the debt.   In order to enforce a stable keeper’s lien, you must follow the following steps:

STEP 1

If the owner’s residence is not in Texas or not known, you do not need to send the notices set forth in Step 1 and Step 2 below. You may sell the horse at a public sale without notice to the owner—provided the board bill is at least 60 days’ past due and you have possession of the horse. Still, it is advisable that you keep some proof that you billed the customer and they did not remit payment before proceeding with the sale.

If the owner’s residence is in Texas and known, you start the lien enforcement process by sending a demand for payment by certified mail and regular mail to the owner’s last known address.  Form Demand Letter.

STEP 2

If the owner does not pay the amount owed before the 11th day after the date you sent the demand letter referenced above, send out a notice of sale by certified mail and regular mail to the owner’s last known address.  Form Notice of Sale.

STEP 3

Sell the horse at a public sale 20 or more days after you send the notice referenced in Step 2.   

Note: If you are fortunate enough to get more for the horse at auction than you are owed, you must pay the overage to the owner. If the owner has moved out of Texas or its residence is unknown, you must pay the overage to the county treasurer of the county in which you boarded the horse.

Remember—the stable keeper’s lien is a possessory lien. This means that if you give the horse back to the owner before the bill is paid, the stable keeper’s lien is, practically speaking, no longer enforceable. In that case, you will need to file suit against the debtor to collect the unpaid board. This is why it is essential to obtain a written board agreement from every customer that contains the date you started boarding the horse, sets forth your fee for board, and includes an agreement that your customer will pay out-of-pocket expenses for care such as worming, farrier, supplements, and vet work.

• Email This
• Print
• Comments
• Trackbacks