A Premier Dressage Boarding
and Training Facility
Settlement Farm
Business Plan
The name & address of the company have been removed!
AGREEMENT OF CONFIDENTIALITY
I agree that reading of this Business Plan is strictly limited to me as authorized by Mrs.
Dorothy and Settlement Farm (the Company). I agree that I shall not divulge or
reproduce the content of this Business Plan without the written consent of the Company.
I understand that any information provided in this Business Plan is in all respects
confidential in nature, other than information which is in the public domain through other
means. I agree not to disclose any information without the express written permission of
Mrs. Dorothy “Last name removed” and Settlement Farm.
Upon request, I will return this document to Mrs. Dorothy “Last name removed” and
Settlement Farm.
This Business Plan includes “forward-looking statements and projections.” All such
statements and projections within this Business Plan, other than statements of historical
fact, regarding Settlement Farm or its strategies, plans, objectives and expectations, are
all forward-looking statements. Although Settlement Farm believes that the projections
reflected in this plan are reasonable at this time, it can give no assurance that these
projections will prove to have been correct.
This Business Plan is not a financing offer. A financing offer is only valid with an
approved Private Placement Memorandum.
___________________ ___________________
Signature
___________________
Name (typed or printed)
Date
TABLE OF CONTENTS
EXECUTIVE SUMMARY
The Business Concept
The Market Opportunity
Operations of the Business
Service Offerings
1
1
2
5
5
THE COMPANY
Mission of the Company
Company Structure
5
5
5
1. Legal Status
2. Physical Location
3. Intellectual Property
5
6
6
Company History
GROWTH STRATEGY
Business Objectives
Targeted Customers
Key Initiatives
Competition and Competitive Advantages
Size of the Market
Marketing Activities
6
7
7
7
8
8
8
9
CORPORATE MANAGEMENT
Management
10
10
Founder and President:
Co-owner of the Property:
10
11
KEY FINANCIAL PROJECTIONS
Financial Needs and Use of Funds
Projected Profit and Loss
Projected Balance Sheets
Projected Cash Flow
11
11
12
13
14
REFERENCES
15
APPENDICES
12 Month Projected P & L
12 Month Projected Balance Sheet
12 Month Projected Cash Flow
5 Year Projected P & L
5 Year Projected Balance Sheet
5 Year Projected Cash Flow
16
16
17
18
19
20
21
Settlement Farm
EXECUTIVE SUMMARY
The Business Concept
Settlement Farm (S
Settlement Farm or the Company) is an equestrian facility that
currently provides boarding, limited private one-on-one lessons by the accomplished
owner, and some shows. The Company intends to expand its offerings by adding more
private lessons, filling its boarding capability to capacity and by adding more shows,
overnight stall rental and group riding lessons.
Settlement Farm is centrally located in “ANYWHERE”, MA in a beautiful rural setting.
It is one of New England's premier boarding facilities and was established in 1995. It
offers many outstanding amenities including indoor and outdoor arena areas, 18
turnabout paddocks and two barns with numerous matted and over bedded stalls.
Settlement Farm will take advantage of the very strong interest in New England for
equestrian services to drive its growth. The Company expects to grow considerably
within a very short period of time. Determinations have been made for the size of the
market, amounts of budgeted advertising and promotion dollars, and the number and
kinds of similar facilities in the area..
Projections call for the Company to generate revenues of $266,000 and operating income
of $92,000 in its next twelve months. Settlement Farm will achieve strong growth over
the next several years, reaching $420,000 in revenues and $220,000 of operating income
by the fifth year.
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Settlement Farm
The Market Opportunity
Today’s U.S. horse industry shows between 9-and-10 million equines in this country; in
2005 there were a total of 9,222,847 horses. According to the latest American Horse
Council (AHC) research, in 2005 the U.S. horse industry reported 4.6 million American
owners, employees, volunteers, and service providers, with over 2 million people who
own horses. The State of the Industry report stated, “The horse industry has a direct U.S.
economic impact of $39 billion annually and provides 460,000 full-time equivalent jobs.”
The study, conducted by Deloitte Consulting, LLC over the last year, was commissioned
by the American Horse Council Foundation with major funding support from the
American Quarter Horse Association, The Jockey Club, the National Thoroughbred
Racing Association and Breeders’ Cup Limited, Keeneland Association, American Paint
Horse Association, American Association of Equine Practitioners, U.S. Trotting
Association, Thoroughbred Owners and Breeders Association and the U.S. Equestrian
Federation. The study, titled The Economic Impact of the Horse Industry in the United
States, is the most comprehensive research document ever compiled on the American
horse industry.
Key industry statistics and economic indicators reflected in the study include: 1

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Recreation: 3,906,923 horses
Show: 2,718,954 horses
Racing: 844,531 horses
Other (includes farm and ranch work, rodeo, carriage, polo,
police work, and informal competitions: 1,752,439
Estimated number of horses by Breed:
 Quarter Horse, 3,288,203
 Thoroughbred, 1,291,807
 Other Horses, 4,642,739
The study also revealed:
 An industry that is both large and economically diverse, as well
as a key contributor to the overall fabric of the U.S. economy;
 Horse owners and industry suppliers, racetracks, and off-track
betting operations, horse shows and other industry segments all
generate discrete economic activity contributing to the
vibrancy of the overall industry.
Jay Hickey, President of the AHC said, “This study paints a portrait of an industry that
operates in every corner of the country and contributes mightily to the American
economy and culture. Never before has the impact of our industry been so dramatically
demonstrated.” David O’Connor President of the United States Equestrian Federation
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Settlement Farm
and an Individual Olympic Gold Medalist added, “Millions of Americans have a personal
commitment to the horse industry, from the grassroots to those who compete nationally
and internationally. Some are kids riding their backyard horse for the sheer joy of it,
some support their family working for an equine business, and others are breeders and
competitors at the highest levels. Together they contribute billions to the economic health
of our country through their shared passion for the great American icon, the horse.”
Congressman Don Sherwood (R-Pennsylvania) agrees, stating: “Horses have a special
place in America’s history and culture. This study clearly demonstrates the horse
industry’s significant role in America’s economy.” Representative Joel Hefley (RColorado) added, “As someone who has spent a lifetime around horses, I understand how
much they are a central piece of our nation's fabric, from rodeos and trail riding to
racing and showing. This report demonstrates how horses of every breed positively
impact our economy and our way of life.” Senator Mitch McConnell, (R-Kentucky)
commented, “This study confirms what many of us in the Congress already knew, that the
American horse industry is a vital contributor to the U.S. economy while bringing
pleasure to millions of people.” 4
The NCGA’s Equine Industry Study released in January 2007 reported the overall
economic impact of the equine industry in the United States in 2005 totaled $101.5 9
billion: 3




$32 billion from recreation
$28.8 billion from showing
$26.1 billion from 10 racing
$14.7 billion from other activities
Dr. Freeda Isaac, Staff Veterinarian of the National Center for Import and Export, VS,
APHIS, stated as of February 2007, “The U.S. horse industry is a $102 billion industry
that supports 1.4 million full-time jobs. There are tens of millions spectators that
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Settlement Farm
participate as well. The U.S. horse industry is an international one and increasingly more
foreign horses are being brought into the U.S. for racing, showing, sale, breeding and
pleasure. Often there are not enough quarantine spaces to accommodate them all. The
need for additional quarantine space has increased dramatically and more facilities are
needed to handle the additional commerce. The AHC supports the establishment of
permanent, privately-owned horse quarantine facilities for permanent entry horses to
address the growing need for additional import quarantine facilities.” 2
Agritourism markets also encompass equine tourism. Equine tourism includes using
horses for:




Horseback riding lessons
Trail-riding opportunities
Boarding facilities
Reproduction services
In 2007 a separate study on “backyard” horses was released by the American Horse
Council. As stated earlier, there are over 3.9 million horses used specifically for
recreational activities, of which 1.4 million were quarter horses, another 228,000 were
thoroughbreds and 2.3 million were listed as other breeds. The backyard horse study
showed that of this $32 billion market, $11.9 billion was in direct effects and $20 billion
in indirect and induced effects. 5
According to Ingrid Andrews of Equinnovation Equine Marketing, a Michigan-based
horse business consultant, the average number of horses per owner has risen from 3.6 to
4.6, an increase of almost 28% in recent years. As competition between sellers of horses
intensifies, their costs of breeding and maintaining horses kept for sale have gone up
dramatically. Andrews said, “Competition is good for the industry, as it ultimately should
drive breeders to produce horses of greater quality.” 6
In the U.S., horse riding, shows, and clinics, including dressage competition, (a French
word meaning training) are amazingly popular. Since 1912 dressage competitions have
been included in the Olympic Games, with riders competing individually and in teams.
Equestrian sports involve the execution of precision movements by a trained horse in
response to barely perceptible signals from its rider. Particularly important are the
animal's pace and bearing in performing walks, trots, canters, and more specialized
maneuvers. According to the Wikipedia, an online encyclopedia, “Dressage is an
egalitarian sport in which all breeds are given an opportunity to successfully compete.
Therefore, many other breeds are seen at various levels of competition.” Any riding
horse can benefit from use of dressage principles and training techniques. 7
There is a large opportunity to build a dominant and premier equestrian training and
boarding facility in this market area.
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Settlement Farm
Operations of the Business
Settlement Farm targets prospective
customers within a 30 mile radius of
“ANYWHERE”, MA. It also attracts
customers outside this range for its many
shows.
Marketing efforts of the Company will focus
on several activities. These include:




Advertising
Signage
Referrals
Website
Service Offerings
Settlement Farm provides a wide range of services for horse owners and riding
enthusiasts. Services include:






Boarding
Lessons
Shows
Overnight stall rental
Clinics
Private lessons
THE COMPANY
Mission of the Company
Settlement Farm’s goal is to foster the relationship between man and horse by providing a
relaxed, nurturing environment. Exceptional care of our equine charges is our primary
function. No matter the discipline, success can only be achieved with a willing, content
partner. We are committed to helping you and your horse achieve whatever goals you set.
Company Structure
1. Legal Status
Settlement Farm is a Sole Proprietorship organized in the state of
Massachusetts. The Company is owned by Mrs. Dorothy “Last name
removed”.
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Settlement Farm
2. Physical Location
The Company operates out of facilities at 123 Any Road,
“ANYWHERE”, MA 12345. This property is owned by Mrs. “Last
name removed” and her husband. The property includes numerous
buildings. It provides easy access to clients with ample free parking.
Settlement Farm offers many amenities including a 70 x 200 mirrored
indoor arena and a 100 x 250 outdoor, both with superior footing. It
also has two barns with 27 stalls; one of the barns is heated with
automatic watering system. All stalls are matted and over bedded.
The farm has 18 turnout paddocks with safe three rail fencing.
Individual lockers are provided for boarders as well as an oversized
tack/viewing room with refrigerator, microwave and vending machine.
There is also a bathroom and washing machine in the smaller barn.
3. Intellectual Property
Settlement Farm maintains a web site at “The web address has been
removed” to market its services. There is no other proprietary
intellectual property owned by the Company.
Company History
Settlement Farm started in 1996. The owner, Dorothy (Dot), and her husband Nick built
Settlement Farm from the ground up. Dot has managed boarding facilities for over 25
years. She is a USDF bronze, silver and gold medalist on horses she has trained herself.
The owner has performed extensive research to determine the market viability and
operational challenges of this type of business. Questions that were addressed include:

What is the market opportunity (is there a need for the business)?
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Settlement Farm





What type of competition is located near-by?
Can the targeted market support the business expansion?
What types of customers will the business attract?
How much additional costs are needed?
How much monthly revenue is needed to achieve break even?
GROWTH STRATEGY
Business Objectives
The Company is planning on strong growth in the next twelve months. It plans on
achieving the following objectives:





Increase its boarding revenue
Offer more lessons
Sponsor more shows each year
Add riding lesson programs
Grow twelve month revenue in excess of $266,000
In succeeding years, Settlement Farm will continue to grow its business and will achieve
these objectives:




Grow the annual number of new customers each year
Develop a reputation that will exceed competitors in every area
Achieve excellent customer loyalty by placing strong emphasis in the
areas of outstanding service and support
Attain $420,000 in annual sales in Year 5
Targeted Customers
Settlement Farm has identified a clear and substantial target market. Targeted customers
include:





Horse owners
Riding enthusiasts
12-year olds up to seniors
Families with incomes in excess of $25,000
Horse show participants
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Settlement Farm
The Company targets these types of customers within a 30 mile radius.
Key Initiatives
Settlement Farm has developed the following key initiatives to achieve its growth goals:





Add additional services
Expand its marketing efforts to reach its target audience
Establish an aggressive sales program to identify and secure customers
Provide the best facilities at the most competitive pricing
Provide a satisfying experience for every customer
With the proper financing and adherence to this business plan objectives, the Company
believes it can complete these initiatives and achieve success.
Competition and Competitive Advantages
Settlement Farm has identified several hundred horse farms within a 30 mile radius.
However, less than thirty of these have indoor rings and less than ten have lesson
programs and facilities comparable to the Company’s.
Most of the competitors are running a chaotic operation. Settlement Farm has and hopes
to continue a more sedate and relaxed environment where people will enjoy their visit.
Finally, the credentials and experience of the Company’s founder, Dorothy, provide
Settlement Farm with a level of expertise that no competitor in the area can match.
Size of the Market
Settlement Farm is focused on obtaining customers in the “ANYWHERE”, MA
geographic area. This area is large enough to support the Company’s business objectives.
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Settlement Farm
Description
Townsend, MA
30 Mile Radius
Age
Median Age
35.9
Aged 0 to 5 Years
102
Aged 6 to 11 Years
109
Aged 12 to17 Years
82
Aged 18 to 24 Years
91
Aged 25 to 34 Years
120
Aged 35 to 44 Years
189
Aged 45 to 54 Years
146
Aged 55 to 64 Years
75
Aged 65 to 74 Years
52
Aged 75 to 84 Years
50
Aged 85 Years and Older
27
Total Households By Income
Less than $15,000
55
$15,000 to $24,999
31
$25,000 to $34,999
94
$35,000 to $49,999
26
$50,000 to $74,999
152
$75,000 to $99,999
40
$100,000 to $124,999
21
$125,000 and Over
23
Average Household Income
$52,242
36.2
155424
168814
159016
147802
253499
330835
260568
155453
111574
77756
28393
79115
62958
65849
98746
143753
94753
55788
81934
$71,106
2000 census Bureau
The Company estimates that 0.5% of the regional population is involved in horses.
Marketing Activities
Settlement Farm will implement various marketing efforts to attract customers, including:

Optimize its web site to describe and promote the business
The Company has optimized its web site to attract prospective
customers. The website is attractive and easy to navigate. It provides
attractive pictures of the facilities.

Direct mail activities to targeted audiences
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Settlement Farm
Settlement Farm will buy lists of names that match its targeted
customer profile. It will send direct mail pieces (postcards, letters,
etc.) to these names to attract them as customers. The Company will
use commercially available list brokers to obtain the names.

Advertising
The Company will take out ads at various shows. It will also post
ads on bulletin boards at various tack shops in the area.

Seminars and educational events
The Company will conduct seminars and educational events
describing its services.

Customer loyalty programs
The Company will develop strong customer loyalty programs to
encourage business. Settlement Farm will implement and manage
programs that reward a customer for repeat business with the
Company.

Referrals
Settlement Farm will develop referral programs whereby existing
customers receive incentives to refer friends or associates as
members.
CORPORATE MANAGEMENT
Management
Founder and President: Ms. Dorothy “Last name removed”
Mrs. “Last name removed” has managed boarding facilities for over 25 years. She
is a USDF bronze, silver and gold medalist on horses she has trained herself. Her
horse Fabian was 14th for USDF Horse of the Year nationally in 2001 at the
Intermediare II level. Dorothy has many awards at the regional and national level.
She is a USEF 'r' licensed dressage judge and had been accepted into the 'R'
training program.
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Settlement Farm
Mrs. “Last name removed” is a graduate of the University of Massachusetts,
Lowell, with a BS in pure physics.
Co-owner of the Property:
Mr. Nick “Last name removed”
Mr. “Last name removed” owned and operated N. P. “Last name removed”, Inc.,
a commercial plumbing contractor that obtained profits in 24 of 25 years of
operation. He oversaw the transition from the construction to a service-based
operation. Nick was responsible for all aspects of the business. He retired and sold
the business and now helps his wife with Settlement Farm.
KEY FINANCIAL PROJECTIONS
Financial Needs and Use of Funds
The Company will fund the operations and expansion of the business with their own
funds.
Sources and Uses of Proceeds
Sources
Loan
$0
Equity
$25,000
Total Sources
$25,000
Uses
School horses/eqmt
$0
Farm Eqmt (tractor)
$25,000
Furniture/equipment
$0
Leasehold Improvements
$0
Other
$0
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Working Capital
Total Uses
$0
$25,000
Settlement Farm
Projected Profit and Loss
Settlement Farm’s revenues are projected to grow significantly in the next twelve
months. Monthly revenue will increase to $24,000. For the 12-month period, revenues
will total $266,000 and this will yield an operating profit of $92,000 and a net income of
$53,000. The monthly projections are illustrated in the following graph:
12 Month Revenues and Net Income
$25,000
$24,000
$23,000
$22,000
$21,000
$20,000
$19,000
$18,000
$6,000
$5,000
$4,000
$3,000
$2,000
$1,000
$0
Month 1
Month 4
Month 7
Revenues
Month 10
Net Income
The next two graphs show Settlement Farm’s projected annual revenues and annual net
profit over a five year period.
Projected Annual Revenues
$500,000
$400,000
$300,000
$200,000
$100,000
$0
Year 1
Year 2
Year 3
Page 12
Year 4
Year 5
Settlement Farm
Projected Annual Net Income
$150,000
$100,000
$50,000
$0
Year 1
Year 2
Year 3
Year 4
Year 5
Detailed profit and loss projections are presented in the Appendix.
Projected Balance Sheets
Based on projected revenues and expenses, the Company anticipates maintaining a strong
balance sheet.
Projected 12 Month Current Ratio
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
Month 1
Month 4
Month 7
Month 10
Complete projected balance sheet details are shown in the Appendix.
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Settlement Farm
Projected Cash Flow
The Company’s cash flow projections show that Settlement Farm will have sufficient
cash to support the business. The following graphs present a view of projected cash flow
of the business.
Projected 12 Month Cash Flow
$20,000
$15,000
$10,000
$5,000
$0
Month 1
Month 4
Month 7
Month 10
Projected Annual Cash Flow
$200,000
$150,000
$100,000
$50,000
$0
Year 1
Year 2
Year 3
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Year 4
Year 5
Settlement Farm
REFERENCES
2007 “State of the Industry”, (By Les Sellnow, The Horse News Article,
September 1, 2007) Article Found at:
<http://www.thehorse.com/ViewArticle.aspx?ID=10303&nID=22>
2
2007 “National Center for Import and Export Comments”, (By Dr. Freeda Isaac
Staff Veterinarian, Horse Council; February 12, 2007) Article Found at:
<http://www.horsecouncil.org/health/Comments%20on%20Pvt%20Quar%
20Proposal%20-%20Feb%202007.pdf>
3
2007 “Equine Industry Study Funds”, (NCGA Study, January 30, 2007)
Article Found at:
<www.ncga.state.nc.us/Sessions/2007/Bills/House/PDF/H1473v10.pdf>
4
2007 “Most Comprehensive Horse Study Ever Reveals a Nearly $40 Billion
Impact on the U.S. Economy”, (By the American Horse Council,
February 13, 2007) Article Found at:
<http://www.californiastatehorsemen.com/ahc.htm>
5
2007 “Equine Agritourism Overview”, (Agricultural Marketing Resource Center,
June 2007) Article Found at:
<http://www.agmrc.org/agmrc/commodity/agritourism/equineagritourism/>
6
2007 “Why Horse Breeders Should Worry About the Growth of the Equine
Industry”, (Equinnovation Equine Mareting, July 4, 2005) Article Found at:
<http://express-press-release.com/15/Why%20Horse%20Breeders%20
Should%20Worry%20About%20the%20Growth%20of%20the%20
Equine%20Industryphp>
7
2007 “Dressage”, (Wikipedia, Online Encyclopedia, September 6, 2007)
Article Found at:
<http://en.wikipedia.org/wiki/Dressage>
1
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Settlement Farm
APPENDICES
12 Month Projected P & L
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Settlement Farm
12 Month Projected Balance Sheet
Page 17
Settlement Farm
12 Month Projected Cash Flow
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Settlement Farm
5 Year Projected P & L
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Settlement Farm
5 Year Projected Balance Sheet
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Settlement Farm
5 Year Projected Cash Flow
Page 21