Posted by Seth Burgess on Thu, Sep 02, 2010 @ 03:45 PM
Getting Horse Farm Work Done - Let's Make a Deal.
Making a profit in the horse business is difficult. Sooner or later most every stable owner considers alternative ways to obtain their personnel and save money. There are three basic ways to obtain help, (1) hire an employee, (2) take on a partner, and (3) lease your facility and contract with the lessee. At the worker level (Groom, Stable Help, Barn Manager, etc.), horse people are usually hired as employees. The other two options are usually considered for upper level management people, typically a Trainer or Manager/Trainer. Here are some of the pros and cons of each approach to obtaining a Trainer.
(1) Hiring a Trainer as an employee gives the facility owner the greatest amount of control over how and when things will be done. The facility owner takes the majority of the business risk and should be in line for most of the financial gain (or loss.) The owner's horses and needs come first. However, hiring an employee can require a financial commitment the owner is not ready to make.
(2) Sometimes when an employer is not prepared to hire a Trainer on salary, they will consider a partnership. Typically, the employer offers to provide the facility in exchange for allowing a Trainer to run his training business out of the facility and in exchange for training the facility owner's horses. This approach is usually a "recipe for disaster." It is very rare for this kind of solution to work. As a partner, the facility owner is no longer taking all of the business risk and must give up some of the control over what happens in their facility. But, as a partner, the business decisions still materially affect the owner. Arguments over who will maintain the facility and how are common. Training of the facility owner's horses and providing for the owner's other needs usually end up last on the list. Any savings in cash outlay is usually more than offset by the trouble this kind of arrangement causes.
(3) Leasing a facility to a Trainer at "arms length" for a fee can be a viable solution. Under this arrangement, if the owner has horses to be trained, he or she simply becomes a regular client of the Trainer and pays the normal training fees. Business risk for the facility owner is largely eliminated, so that the loss of control over business activities and decisions has minimal impact. The owner's horses get equal treatment with other clients. The financial impact of the arrangement is minimal and predictable for the owner.
Posted by Seth Burgess on Mon, Aug 16, 2010 @ 04:46 PM
Turnover is Not a Delicious Pastry for Equine Employers
Turnover in horse industry businesses is a killer diet. Nothing will kill a business faster, and nothing has more hidden costs. Start by understanding that well trained, loyal, productive employees are the single most important element in a successful horse business. Do not underestimate the value of hiring and keeping good employees.
Having said that, personnel management can be a can of worms at times. Both employers and employees have strengths and weaknesses, hopes and dreams, expectations and disappointments. Whatever we do, sometimes employment relationships don't work out.
However, turnover can be excessive and damaging to a business. Excessive turnover exists when staff is being replaced at such a rate that continuity of expertise and productivity suffer dramatically.
A farm that replaces a trainer more often than every 24 months, replaces barn help more often then every six months, or replaces a Farm Manager more often than every two years is in trouble. A farm that replaces more than one of these key people in a two year period, needs to take a serious look at it's approach to hiring, training, and retention.
It is very easy to take turnover for granted miss the costs to the bottom line. There are direct costs and intangible costs here they are:
Direct Costs
(based on an hourly rate of $25 per hour for your time)
Write job description - 2 hours - $50.00
Write/place ad - 1 hour $25.00
Cost of ad - $85.00
Handle initial responses – 6 hours - $150.00
Select/contact applicants – 2 hours - $50.00
Interview – 6 hours - $150.00
Background checking – 4 hours - $100.00
Orientation and paperwork – 2 hours - $50.00
Initial Training - 2 hours - $50.00
Pay for Trainee - 2 hours @$8.00 per hour - $16.00
Coworker's Assistance - 2 hours @$10.00 per hour - $20.00
Trainee's first 30 hours @$8.00 per hour - $240.00
Follow-up Training - 2 hours - $50.00
Paperwork, payroll, insurance, etc. - 1 hour - $25.00
Total Direct Cost for Hiring ONE Stable Help level employee - $1061.00
Hidden Intangible Costs
Slowdown in operations – decreased productivity
Manager distracted from supervision of other employees
Manager does not have time to do things to improve the company Poor customer service from untrained help
Lower staff morale – getting to know the new help
Increased employee theft
The conclusion is obvious. Develop techniques for reducing turnover before turnover reduces your business to rubble. For more tips on good personnel practices, subscribe to our Employer Newsletter.
Posted by Seth Burgess on Tue, Aug 10, 2010 @ 03:10 PM
15 Step Code of Conduct for Horse Industry Employers
Employers in the horse industry are as diverse as clouds in the sky. There is not a universal standard of conduct that all equine employers adhere to. In many cases, horse industry employers simply don't understand how to manage personnel effectively. Employees are the single most important asset to the success of any equine business. Here is a suggested code of 15 rules for equine employers to follow to achieve the basics of good personnel management:
1. Always have a written job description for each job in your organization. This vastly improves employee understanding of their duties and responsibilities. It also creates a basis for performance evaluation, and termination (if that becomes necessary).
2. Always pay promptly in the amount agreed upon. Employees are not creditors. Set your pay levels realistically.
3. Explain to each employee how their job contributes to the over all mission of your business.
4. Apply policies across the board. Don't have different policies for different employees.
5. Assess employee strengths and weaknesses. Be ready to give praise for strengths and to assist with improving weaknesses.
6. Be ready to repeat instructions patiently or give more detail. Employees are human and may not hear clearly or may forget.
7. Always tell an employee when they have failed to perform in some way and give them a chance to correct the failure. Any person you terminate should know exactly why they have been terminated, because you gave them a chance to correct the problem.
8. Follow employment law including wage and hour laws, and employee/contractor employment status.
9. Avoid illegal discrimination. Judge job applicants based solely on their ability to perform the duties and responsibilities of the job.
10. Listen to employee ideas and concerns. Your employees may be closer to the situation than you are.
11. Pay attention to safety in the workplace.
12. Give employees time off to recharge or to attend to personal matters. One full 24 hour day off per week is a minimum for full time employees. At least two weeks of paid vacation per year for year round employees is advisable. 8-10 paid personal/sick days are a good idea. Without sufficient time off, employee loyalty and productivity will drop.
13. Provide adequate equipment and supplies for employees to do their job.
14. Reimburse employees for business expenses including miles driven for your business in their personal vehicle.
15. Respect employee privacy. Do not enter employer provided housing unannounced or when the employee is not at home. Do not involve yourself in employee personal matters without permission from the employee.
Good compensation does not guarantee a good employee. However, bad compensation DOES guarantee a bad employee. For information on salary, benefits, vacation, housing, and more, take a look at the Horse Industry Compensation Study.
Posted by Seth Burgess on Thu, Jul 29, 2010 @ 03:43 PM
In our recent equine employment satisfaction survey, the most important element in equine employment for most every horse industry employee is "being appreciated for what I do." It even ranks ahead of getting a high salary.
All employees like to feel they are appreciated, they are doing important work, and they are contributing to the success of their employer's business. However, most employees won't know how they are doing unless you tell them. Employees at the groom and stable help level are far removed from the facts and figures that indicate success and may not be able to see how their job is vital to the organization. Even managers and Trainers may have their particular focus and not be aware of the big picture.
Here are ten ways in which you can make your employees more aware of their contribution to the success of your horse business and make their work more meaningful.
1. Be quick to praise your employees for a job well done. If you praise them in front of other employees, the value doubles. Praise in public, but reprimand in private.
2. Explain to each employee how their specific job contributes to the success of the business. For instance, cleaning stalls may not be glamorous, but when customers see dirty stalls, they will be turned off and are likely to spread the word that your horses are not well cared for.
3. Explain your philosophy. Tell employees about why your are in the horse business and how your products and services make your customers happy and the world a better place.
4. Create a diagram of the jobs in your organization and connect each job with lines that lead to things like sales, customer satisfaction, better horses, better riders, and a better-looking more-profitable business. Hang this diagram in your workplace.
5. Create a mission statement for your organization, so that everyone on your staff can identify with the mission, and you can refer to it when explaining the value of a particular job.
6. Ask your employees for input on a regular basis, so they can feel like contributors to your success.
7. Have a written job description for each horse job type. Give each employee a copy of their job description. This will not only help everyone be on the same page about the job, it will give each employee a template by which they can judge their own performance.
8. Consider linking compensation to job performance and business success. Give bonuses based on measurable performance, either work performance or business success. Tell your employees about your bonus program to give them something to work towards.
9. As best you can, hire people who are excited and passionate about your mission in the horse business. Avoid hiring people who don't really care about your mission.
10. When you hire, integrate your workers into your mission as part of the orientation and training process. Then commit to enhancing the personal success of your employees in your organization as the months and years go by.
Attitude starts at the top. If you are discouraged about your horse business and pessimistic about it's future, your attitude will rub off on your employees. Take our horse industry economic survey and see the results instantly for free. It might surprise you how most horse people are optimistic about the future of the horse industry.
Posted by Seth Burgess on Mon, Jul 12, 2010 @ 03:27 PM
The most common mistake made by equestrian employers is to let bad experiences in the past color their search for new help. Let's face it, having employees can be a can of worms at times. The list of things that can go wrong in an employer-employee relationship in a horse job is long. Employers can be burned, cheated, and taken advantage of by their equine help. Frequently this leads to employers going into "prevention" mode. Instead of trying to be positive and work on attracting the best possible applicants, many equine employers seem to go negative and start warning applicants about all the things they DON'T want. This approach tends to warn off the good applicants and result in continued difficulty finding and keeping good help. We see this tendency in the wording of equestrian job ads every day. Here is an example of a job ad that suffers from the "negative, fair warning" syndrome:
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Equestrian Teaching-Training-Boarding barn needs ethical, reliable and hard working person who cares deeply about horses and wants to provide premium care for them; must have a positive personality, good people skills, and a well developed sense of personal responsibility. Must be productive with minimal supervision. Responsibilities include daily horse care, stall cleaning, barn up-keep, horse prep, tractor operations, basic record keeping, supervision of part-time staff. Do some teaching and/or riding if capable. Be prepared for hard work and long hours. Only serious applicants need apply.
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Now, do you think this employer has been burned in the past? You bet! You can just imagine the trouble this employer has had with lazy, dishonest, and careless employees, and you can see how much this employer wants to avoid ever hiring that kind again. Unfortunately, posting an ad like this will just about guarantee that this employer will end up with the same kind of employee again. Good help-wanted advertising is written to ATTRACT the best possible applicants, NOT to ELIMINATE the undesirable applicants. Here is my rewrite of the same job listing.
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Equestrian Teaching-Training-Boarding barn with solid reputation and happy clientele has great opportunity for experienced horse person to excel in daily care of horses, facility maintenance and other essential tasks. Your teaching and riding skills will be utilized. We know that good employees make a successful business, and we can provide you with on-the-job training from a successful trainer and coach. You will have the opportunity to advance to your maximum skill level. Build a future with an employer who appreciates good help. Contact us today.
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Will this kind of advertisement attract undesirable applicants? Of course it will. However, unlike the first ad, it will also attract the good applicants. As an equine employer, your job will be to sort out the applicants as they come along. Don't let your past experiences with equine help affect your ability to attract good applicants. Be sure your ads are written to attract the best and see that your entire approach to hiring follows suit.
For continued help with equine employment issues, subscribe to our free monthly email newsletter.
Posted by Seth Burgess on Mon, Jul 05, 2010 @ 04:38 PM
Equine Working Student or Apprentice
Some time ago, I received this query from a concerned parent.
"My daughter was offered a job as a "Working Student" at the horse farm she rides at. She would work around the horse farm and receive free riding lessons in return. Upon calling my state Revenue Department and the IRS I found out that this was "barter income" and would have to be reported as income. In addition, there are W2-related regulations and working paper issues (my daughter is 16 years old). Not doing the paperwork, and associated taxes, is illegal. The horse farm said that was ridiculous and the working student arrangement is a industry standard and they would not file any paperwork (neither 1099 or W2) nor get involved in workers comp. or other labor-reporting issues. The Dept. Of Revenue asked me to provide them with information so they could audit the farm. My question: Has my daughter been offered to "work under the table" illegally, or is this just a misunderstanding?
There is a group of "common practices" in the horse industry that are legally questionable or even down right illegal. With the way our legal system works, everyone is on their honor to obey the law. With many laws, there is no one who comes around to make sure you are complying. Wage and hour laws and other employment related laws are frequently like that. This means that all sorts of illegal employment practices may be going on, and unless someone reports the violation, the the employer is very likely to get away with the practice. However, the excuse that "everybody does it that way" while it may be true, does not make any practice legal.
There have been instances over the years of high-profile well-respected Working Student or Apprentice programs being taken to task by the authorities for questionable practices. However, the most extreme violations are usually in small operations that do not have an ongoing "program", but just hire one or two people as Working Students or Apprentices. The worst situations usually occur when someone is hired as a Working Student and there is no formal arrangement for time spent working vs. time spent learning. In cases like this, the employer is simply using the term Working Student to try to justify paying a substandard wage for a normal job. An employer does not have the right to pay less than minimum wage, just because a job includes some on-the-job training. On the other hand, if there is a formal arrangement for lessons or other advanced level training in exchange for work and the times for work and times for training are clearly spelled out, then the position may be a genuine Working Student or Apprentice position.
In situations like this the value of the training given must be commensurate with the amount of work being done, or the person must be paid some cash in addition to receiving the training. I am not an attorney and you may need to consult one. However, Working Student and Apprentice positions fall under employment laws just like any other position. Individual state laws may be more restrictive than federal laws in some states. Here is a link to the Department of Labor with information on laws relating to apprenticeships.
http://www.dol.gov/compliance/topics/wages-apprenticeships.htm.
If you hire Working Students or Apprentices, beware. Even if no cash changes hands, your Working Student or Apprentice is still your employee and must be treated as such. Child labor laws apply. Wage and hour laws apply. Tax laws apply. From my subsequent conversations with the writer of the above quote , it seems likely that the employer in question will be "turned in" to authorities and may face dire consequences. Don't put yourself in a position to be "brought down" by an angry parent or disgruntled employee. Contact your attorney or tax advisor for information on the correct way to hire Working Students and Apprentices.
If you're looking for equine employees or need to find a job, try our
free preview.
Posted by Seth Burgess on Fri, Jun 25, 2010 @ 03:27 PM
Taking Intelligent Risks in Your Horse Business
Do you consider yourself a risk-taker? Let's take it one step further and ask: do you consider yourself a risk-taker in your horse business? The latter might result in a slightly different answer than the former.
Take a look at this video on risk taking in business by Abby Johnson.
Posted by Seth Burgess on Sun, Jun 20, 2010 @ 03:36 PM
Horse Industry Business Plans
Nothing seems as scarce as a business plan in the horse industry. When most of us think about a business plan, we think about board rooms, accountants, and months of work and preparation. Besides, does a small business really need a business plan?
In some ways, business plans are more important for small businesses than for larger ones. Small businesses may be less able to adjust when mistakes are made, mistakes may have a larger impact on the over all health of the business, and small businesses may not have the resources to recover from failures. The good news is that business plans need not be time consuming or difficult.
Here are some links to resources for business plans.
6 Easy Steps to a Simple Practical Business Plan
Demystifying Business Planning in the Horse business
Equine Business Plans
Preparing a Business Plan - TOBA
How to Write a Business Plan
A business plan will not only help you create a brighter future for your horse business, it will help establish you as a real business and not just a hobby in the eyes of the I.R.S.