Business Plan for Horse Trekking Business in Australia

This business plan outlines the history and background of the horse trekking business in Australia, short term, medium-term and long-term goals, market analysis, marketing plan, five-year financial plan, risk assessment and mitigation, and exit strategy for investors.

Running head: BUSINESS PLAN
Business Plan
Name of the Student:
Name of the University:
Authors Note:

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1
Table of Contents
Executive Summary:..................................................................................................................2
History and Background of the Business Idea:..........................................................................2
Short term, Medium-term and Long-term goals with Milestone and Schedule:........................4
Market Analysis:........................................................................................................................7
Marketing Plan:..........................................................................................................................8
Five-year financial plan pro-forma income statement, balance sheet, cash flow statement:...10
Risk assessment and mitigation:..............................................................................................16
Exit Strategy for investors and valuation at exit:.....................................................................17
References and Bibliography:..................................................................................................18

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Executive Summary:
The main goal of the business is to fully operate in Australia and obtain high end
customers to increase its overall revenue generation capability. There is relevant need for the
opportunity, as the business is still flourishing, where the attraction of horse trekking could
boost the hospitality industry in Australia. The initial penetration in the horse trekking
industry with adequate marketing strategy and business plan might help in generating high
level of income from the business. The target market is the customers from Asian and
America, while the business model is dependent on the number of sales made by the
company during the fiscal year. However, with the use of adequate internet and tourism
marketing strategy the business might attract the relevant customers. The operation is
adequate, which can be controlled with high end marketing strategies. The prepared financial
analysis relevantly indicates the financial performance of the business, which is positive.
Therefore, with the acquisition of adequate business capital the operations of the business
plan can be completed, which might help in generating high level of income from operations.
History and Background of the Business Idea:
Tourism in Australia is one of the significant part of the Australian economy.
Sydney, Brisbane, Queensland and the Great Barrier Reef are some of the popular
destinations for tourists in Australia. The growth of Australian tourism has increased despite
the various economic challenges. Equestrian tourism has been quite famous in Australia for
the past few decades. Victoria’s love affair with the horse riding is deep roots with the state’s
history and culture. Horse riding is one of the main attractions for tourists in the Rainbow
Beach because of its most beautiful beaches in the world (Buchmann 2017). The importance
of horseback riding has been increasing although it has been quite expensive. Equestrian
tourism in Australia has a quite high expenditure and the tourists have to spend a lot of

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money during the field riding. Over seventy percent of the gross domestic product of
Australia is associated with entertainment and recreation industry. The main activities under
the horse renting industry consist of racing, breeding and equestrian events. It has also been
found out that Equestrian brings about more than $1 billion to the economy.
As Australia is famous all over the world for its natural wonders along with wide
open spaces, deserts and beaches, horse riding business is therefore very famous in Australia.
The horse industry had made a quite huge progress in the last few years in Australia. The
horse industry is known to contribute over $6.2 billion every year. Horse business, equestrian
events, racing and breed events along with the maintenance of horses contribute a huge
amount to the Australian economy (Ekegren et al. 2018). Most of the horses are sold either
directly or through auctions. Though horse riding business is quite popular in Australia, the
maintenance cost of the horses is very high Presence of strong tourism culture in Sydney and
Australia makes equestrian tourism quite popular. Australian beaches, large islands,
accessible fringing reef and the perfect whether makes beach rides. The above reasons
therefore prove that the horse renting business in Australia will be quite successful.
The business name of the horse renting company is Spirit of the High Country which
will be set up in Victorian High Country in Australia. Renting of horse for tourism has huge
benefits. The arrangement consists of a formal agreement between the owners and the riders.
Horse renting has been a popular business even in economically challenging times
(Buchmann 2017). Therefore, riding stable business can be highly profitable when it is
planned and managed properly.
The management team of the horse renting business includes experienced staffs and
riding instructors who are quite experienced in training horses. Staffs that can assist with the
ventures are also need to be hired (Björlinger and Johansson 2016). The facility should have a

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feed room, water trough, stalls, proper storage places for beddings and hay. Moreover, it
should also consist of maintenance equipment along with paddocks and fields. An equestrian
facility should be created for the purpose of training, maintain and accommodating horses.
The management team will also include veterinary physician who will look after the horses.
It will also include quality farrier service along with veterinary care.
Short term, Medium-term and Long-term goals with Milestone and Schedule:
Revenue goals / customer service goals / community outreach goals:
The major revenue gaol for the business is to increase over the period of five years,
which would eventually help in supporting the finance cost and other operational activities. In
addition, the aim is to business is to increase the revenue to about 15 million until the end of
5th years, which might help in supporting the expansion plans.
In similar context, the overall customer service goal of the business is to increase its
exposure in hospitality industry, which might help in improving the current financial
performance of the company. The business aims in providing services such as hotels,
restaurants and vacation place for customers to improve their leisure experience in Australia.
The improvement in the overall service quality would benefit the Australia
community, as higher income will be generated from tourism. This would also increase the
level of employment, which might help in raising the community living standards.
Short term goals:
The short term goal of the business is to penetrate the market and make a name as the
potential competitor. This would eventually help in boosting the required level of income for
continuing the business and generating high level of income. The extensive use of marketing

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strategies and planning would eventually help the business to penetrate the market and attract
potential customers into its vicinity.
Medium term goals:
The midterm goal of the business is to obtain positive cash flow and generate
adequate returns from supporting its finance cost and improve is business operations. The
medium term goal is to increase its market share by utilising the adequate marketing
strategies and maximise the level of revenues from its operations.
Long term Goal:
The long term goal of the business is to expand its operations and generate high end
revenue. The expansion process will engulf the whole Australian continent, which is
currently restricted to a specified area. With the expansion plans the organisation will also
intend to increase its exposure in the hospitality industry, which is booming in Australia due
to high end natural beauty.
Milestone Date to be completed by Person
responsible
Details
Marketing
Realistic scalable
marketing strategies
The completion needs to
be conducted within 3
months
Review the
overall plan
This would help in
boosting competitive
edge of the business
Repeat clients The completion needs to
be conducted every 6
months
Monitoring
the process
Increase customer base
Social media updates The completion needs to Monitoring Attract more customers

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be conducted every day the process
Website The completion needs to
be conducted within 1
months
Monitoring
the process
Allow customer to
interact and obtain all the
information
electronically through
website
Summer marketing
campaign
The completion needs to
be conducted within 1st
summer season
Monitoring
the process
Finding potential
customers
Milestone Date to be completed by Person responsible Details
Financial
Monthly reviews Needs to be completed
by 5th of every month
Taking accounts of
the current position
and altering the
strategies to meet
goals
Evaluating the cash
flow statement on
monthly basis
Annual strategy
review
Needs to be completed
by one month after the
financial year has ended
Taking accounts of
the current position
and altering the
strategies to meet
goals
Evaluating the
financial report
such as balance
sheet, cash flow
statement and
income statement

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Market Analysis:
A simple marketing analysis is performed that assists in the acquaintance with the
customers as well as the competitors. A value proposition is created, and a production of
sturdy and achievable goals is performed. Thus, a transparent emphasis of the strategic
marketing campaigns is created.
Industry Outlook:
Horse riding business does not face intense competition like any other businesses, but
this requires patience, experience and the most important is the capital for getting the success.
The maximum conceivable ethical business performs for the business and a standard is
maintained during the time of commerce with the customers as well as the fellow suppliers
and the horse industry’s service providers.
Target Market:
It is very significant to maintain a great status in the industry. The primary goal is to
make sure about the growth of the level remains stable and to be the chosen one in the target
market. This is attainable by making sure about structuring a business that is continued
without any complications. The main targets from whom the business can earn revenue are
the children, celebrities, young adults, movie productions, tourists, race courses as well as the
circuses.
Competitive advantage:
For attaining goals in the business, a good training as well as experience is required
for the management staff as well as the junior staffs who are well agreed to the core values.
The employees are well salaried so that they remain motivated and thus, remains committed

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for the attainment of the vision of the business. The business should hire the best riding
instructors who are available in the country.
Market profitability:
The trading of horses and teaching are the aspects that are to be most profitable in the
business of the horses. For this there is a requirement of expertise. The top horses as well as
the amateur horses are to be imported from the international market. There should be proper
business plan and the target market is to be assessed to achieve profit for a business.
Implementation:
There should be proper knowledge of the target market as well as the competitors for
running a similar business. Thus, new procedures regarding the implementations of rewards
or discounts for the expansion purpose of the business. Proper marketing plans are to be
implemented for the expansion of the business. Social media are also to be included in the
business for the expansion purpose.
Marketing Plan:
Publicity and the strategy of Advertising:
For the expansion of the business it is very important to perform publicity in respect
to that company which is willing to begin a standard as well as a standard company when
there is a competition that arises because of the competitors. There is performance of right
strategies by the process of strategy that is drafted which increases the awareness of the
customers. A brand consultant is hired who is very much capable of the business of the horse
industry. For the revenue generation purpose advertising is performed at the fed stores for the
creation of awareness. In the local newspapers and in the magazines, the radios as well as in

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the television the advertisements are provided. Adverts in the horse show programs are
placed and in the major equine events the publications are organised
Sales forecast:
For the providence of an accurate report for the determination of the sales projections,
a critical examination is to be performed in the industry of the horse riding of the business of
horse riding. Thus, the chances of analysing that derive an accurate forecast of the sales. The
sales projection that is conducted is grounded on the assumptions.
Sales and the marketing strategy:
For a business that is starting up or a business that is already established the term
marketing plays a very important role as an awareness is created by the marketing and by
creating awareness capital is made. The billboards are installed in the strategic locations with
the well-known trails. Social media platforms for instance the Facebook, twitter, Instagram
are also to utilised in this respect.
Pricing strategy:
The services should provide right prices as there are other competitors who are
indulged in the same businesses. Thus, a whole research is to be performed on the offering
that is offered by the competitors and the prices are made lower than that of the competitors.
To gain new customers discount should be offered as well as for the loyal customers there
should be rewards which is offered to them.
Payment:
The customers are to be offered with various modes of payments that are either by
cash or check or via credit card and by the mode of online payment.

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Budget:
For the beginning purpose of a horse riding business a large amount of money is to be
spent for making the business run smoothly and also for making a standard.
Five-year financial plan pro-forma income statement, balance sheet, cash flow
statement:
Income Statement:
Income Statement:
Particulars 1st Year
2nd
Year 3rd Year 4th Year 5th Year
Revenue from Tour Fees
$
7,300,00
0
$
9,125,00
0
$
10,950,00
0
$
17,082,00
0
$
17,082,00
0
Expenses:
Cost of Horse Trainer $ 15,000 $ 15,375
Dinner & Camping Cost
$
5,475,00
0
$
6,843,75
0
$
8,212,500
$
12,811,50
0
$
12,811,50
0
Food for Horses
$
216,000
$
221,400 $ 226,935 $ 232,608 $ 238,424
Wages of 4 Horsekeepers
$
480,000
$
492,000 $ 504,300 $ 516,908 $ 529,830
Wages of 3 Sales Staffs
$
180,000
$
184,500 $ 189,113 $ 193,840 $ 198,686
Salary of Guide & Tour
Manager
$
600,000
$
615,000 $ 630,375 $ 646,134 $ 662,288
Manager's Salary
$
180,000
$
184,500 $ 189,113 $ 193,840 $ 198,686
Rent of Stable $ 60,000 $ 61,500 $ 63,038 $ 64,613 $ 66,229
Rent for Sales Counter Space $ 36,000 $ 36,900 $ 37,823 $ 38,768 $ 39,737
Vetenary Doctor Fees $ 24,000 $ 24,600 $ 25,215 $ 25,845 $ 26,492
Office Stationery & Supplies $ 6,000 $ 6,150 $ 6,304 $ 6,461 $ 6,623
Maintenance Cost $ 12,000 $ 12,300 $ 12,608 $ 12,923 $ 13,246
Promotional Expenses $ 24,000 $ 24,600 $ 25,215 $ 25,845 $ 26,492
Electricity Expenses $ 73,000 $ 91,250 $ 109,500 $ 170,820 $ 170,820
Telephone Expenses $ 18,250 $ 22,813 $ 27,375 $ 42,705 $ 42,705

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TOTAL OPERATING
EXPENSES
$
7,399,25
0
$
8,821,26
3
$
10,259,41
1
$
14,998,18
7
$
15,031,75
7
NET OPERATING
INCOME/(LOSS)
$ -
99,250
$
303,738 $ 690,589
$
2,083,813
$
2,050,243
Less: Interest on Loan $ 71,326 $ 71,326 $ 71,326 $ 71,326 $ 71,326
NET PROFIT BEFORE TAX
$ -
170,576
$
232,412 $ 619,263
$
2,012,487
$
1,978,917
Less: Income Tax @30% 0 $ 69,723 $ 185,779 $ 603,746 $ 593,675
NET PROFIT AFTER TAX
$ -
170,576
$
162,688 $ 433,484
$
1,408,741
$
1,385,242
Balance Sheet:
Balance Sheet:
Particulars 1st Year
2nd
Year
3rd
Year 4th Year 5th Year
Current Assets:
Cash at Bank
$
2,529,98
7
$
2,832,55
0
$
3,405,98
4
$
5,221,77
7
$
6,610,24
9
TOTAL CURRENT ASSETS
$
2,529,98
7
$
2,832,55
0
$
3,405,98
4
$
5,221,77
7
$
6,610,24
9
Non-Current Assets:
Stock of Horses
$
120,000
$
120,000
$
120,000
$
160,000
$
160,000
Saddle & Other Riding equipment $ 48,000 $ 48,000 $ 48,000 $ 64,000 $ 64,000
Stall & Office Counter $ 55,000 $ 55,000 $ 55,000 $ 55,000 $ 55,000
Preliminary Expenses $ 8,250 $ 8,250 $ 8,250 $ 8,250 $ 8,250
TOTAL NON-CURRENT
ASSETS
$
231,250
$
231,250
$
231,250
$
287,250
$
287,250
TOTAL ASSETS $
2,761,23
$
3,063,80
$
3,637,23
$
5,509,02
$
6,897,49

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7 0 4 7 9
Current Liabilities:
Accounts Payable
$
547,500
$
684,375
$
821,250
$
1,281,15
0
$
1,281,15
0
Wages & Salaries Payable
$
120,000
$
123,000
$
126,075
$
129,227
$
132,458
TOTAL CURRENT
LIABILITIES
$
667,500
$
807,375
$
947,325
$
1,410,37
7
$
1,413,60
8
Non-Current Liabilities:
Loan From Bank
$
792,509
$
792,509
$
792,509
$
792,509
$
792,509
TOTAL NON-CURRENT
LIABILITIES
$
792,509
$
792,509
$
792,509
$
792,509
$
792,509
TOTAL LIABILITIES
$
1,460,00
9
$
1,599,88
4
$
1,739,83
4
$
2,202,88
6
$
2,206,11
7
NET ASSETS
$
1,301,22
7
$
1,463,91
5
$
1,897,39
9
$
3,306,14
0
$
4,691,38
2
Capital:
Owner's Contribution
$
1,471,80
3
$
1,471,80
3
$
1,471,80
3
$
1,471,80
3
$
1,471,80
3
Retained Profit
$ -
170,576 $ -7,888
$
425,596
$
1,834,33
7
$
3,219,57
9
TOTAL CAPITAL
$
1,301,22
7
$
1,463,91
5
$
1,897,39
9
$
3,306,14
0
$
4,691,38
2
Cash Flow Statement:
Cash Flow
Statement:

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Particulars 1st Year 2nd Year 3rd Year 4th Year 5th Year
Cash Flow from
Operating
Activities:
Revenue from
Tour Fees $ 7,300,000 $ 9,125,000
$
10,950,000
$
17,082,000
$
17,082,000
Cost of Horse
Trainer $ -15,000 $ 0 $ 0 $ -15,375 $ 0
Dinner & Camping
Cost
$ -
4,927,500
$ -
6,706,875
$ -
8,075,625
$ -
12,351,600
$ -
12,811,500
Food for Horses $ -216,000 $ -221,400 $ -226,935 $ -232,608 $ -238,424
Wages of 4
Horsekeepers $ -440,000 $ -491,000 $ -503,275 $ -515,857 $ -528,753
Wages of 3 Sales
Staffs $ -165,000 $ -184,125 $ -188,728 $ -193,446 $ -198,282
Salary of Guide &
Tour Manager $ -550,000 $ -613,750 $ -629,094 $ -644,821 $ -660,942
Manager's Salary $ -165,000 $ -184,125 $ -188,728 $ -193,446 $ -198,282
Rent of Stable $ -60,000 $ -61,500 $ -63,038 $ -64,613 $ -66,229
Rent for Sales
Counter Space $ -36,000 $ -36,900 $ -37,823 $ -38,768 $ -39,737
Vetenary Doctor
Fees $ -24,000 $ -24,600 $ -25,215 $ -25,845 $ -26,492
Office Stationery
& Supplies $ -6,000 $ -6,150 $ -6,304 $ -6,461 $ -6,623
Maintenance Cost $ -12,000 $ -12,300 $ -12,608 $ -12,923 $ -13,246
Promotional
Expenses $ -24,000 $ -24,600 $ -25,215 $ -25,845 $ -26,492
Electricity
Expenses $ -73,000 $ -91,250 $ -109,500 $ -170,820 $ -170,820
Telephone
Expenses $ -18,250 $ -22,813 $ -27,375 $ -42,705 $ -42,705
Tax Paid $ 0 $ -69,723 $ -185,779 $ -603,746 $ -593,675
Net Cash
Inflow/(Outflow)
from Operating
Activities $ 568,250 $ 373,889 $ 644,760 $ 1,943,119 $ 1,459,799
Cash Flow from
Investing
Activities:
Purchase of 12
horses $ -120,000 $ -40,000
Purchase of Saddle
& Other Riding
Equipments $ -48,000 $ -16,000

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Construction of
Stall and Office
Counter $ -55,000
Business Set-up
Cost $ -8,250
Net Cash
Inflow/(Outflow)
from Investing
Activities $ -231,250 $ 0 $ 0 $ -56,000 $ 0
Cash Flow from
Financing
Activities:
Owner's
Contribution $ 1,471,803
Loan from Bank $ 792,509
Interest Paid $ -71,326 $ -71,326 $ -71,326 $ -71,326 $ -71,326
Net Cash
Inflow/(Outflow)
from Financing
Activities $ 2,192,987 $ -71,326 $ -71,326 $ -71,326 $ -71,326
Net
Increase/(Decreas
e) in Cash Flow $ 2,529,987 $ 302,563 $ 573,434 $ 1,815,793 $ 1,388,473
Add: Opening
Cash Balance $ 0 $ 2,529,987 $ 2,832,550 $ 3,405,984 $ 5,221,777
Closing Cash
Balance $ 2,529,987 $ 2,832,550 $ 3,405,984 $ 5,221,777 $ 6,610,249
Funding Estimates and Operating costs:
Initial Capital Requirement:
Particulars Amount Amount
Capital Costs:
Purchase of 12 horses $ 120,000
Purchase of Saddle & Other Riding
Equipments $ 48,000
Construction of Stall and Office Counter $ 55,000 $ 223,000
Business Set-Up Cost:

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License Fees $ 1,500
Deposit for Telephone & Internet $ 2,500
Logo Design $ 500
Business Registration Cost $ 3,750 $ 8,250
Working Capital (for first 3 months):
Cost of Horse Trainer $ 15,000
Food for Horses $ 54,000
Wages of 4 Horsekeepers $ 120,000
Wages of 3 Sales Staffs $ 45,000
Salary of Guides and Tour Managers $ 150,000
Manager's Salary $ 45,000
Advance Rent of Stable $ 60,000
Advance Rent for Sales Counter Space $ 36,000
Vetenary Doctor Fees $ 6,000
Office Stationery & Supplies $ 1,500
Maintenance Cost $ 3,000
Promotional Expenses $ 6,000
Electricity Expenses $ 18,250
Telephone Expense $ 4,563
Dinner & Camping Cost $ 1,368,750
Cash Fund $ 100,000 $ 2,033,063
TOTAL CAPITAL REQUIREMENT $ 2,264,313
Share Capital $1,471,803.13
Loan from Bank @9% interest $ 792,509
TOTAL INVESTMENT $ 2,264,313
The total funding estimate is calculated as per the initial capital requirements of the
business plan. Therefore, the amount of $721,183.53 is considered to be finding capital that
will be needed from the investor to start the business. The 51% of the share capital is being
invested by the owners, while the other 49% is being accumulated from investors.
Risk assessment and mitigation:
Risk assessment is relevantly needed for each business for surviving the competitive
market and building strategies to obtain sustainable growth. The 35% of the business capital

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16
is relevantly gathered from debt or loan, which is considered to be a highly risky endeavour
for the business. However, the financial projection has relevantly indicated that the positive
cash flow can adequately support the overall business performance, while handling the
finance cost. Nevertheless, there is different level of risk from operations, which might
increase problems for the business. The risk measurement condition might allow the
organisation to support its business and minimise the level of risk from investment.
Operational risk mitigation:
The lack of horses can be a major problem for the business, where for mitigating the
risk the purchases of the horses would conducted straight from branded organisations. This
would eventually help in making a contract, where the horses could be provided by the
company in case of emergency, which will reduce the risk from operations being halted.
Risk from rising finance cost:
The rising finance cost directly erodes the overall net profits, which is made by
business. Hence, the declining profits would hurt the business and devour the initial capital,
where the transferring the loan to other financial organisations with low interest rate can be
conducted for securing the business from being bankrupt.
Rising competiveness:
The competition in the business is relevantly high, as the target customers are Asian
and American in Australia. However, the mitigation to the risk can be conducted with
adequate advertisements, which might allow the business to compete in the market.
Marketing through tourism companies, internet and target customer might allow the business
to gather the required level of sales for surviving the competition.

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17
Exit Strategy for investors and valuation at exit:
The Exit strategy for the investors is relevantly designed, which can allow them to
generate adequate returns from their investment in the initial business plan. There are two
different types of exit strategy, which are repurchasing by the promoters and secondary sale.
The initial investors can only exit from the business after the duration of 3 years, where the
overall cash flow of the investment will relevantly increase over time. The investment will be
blocked for the maximum period of three years after which the investors will be allowed to
take the relevant decisions for holding the stock continuously opting for the exit strategy. The
cash flow condition during the third financial year will be adequate for supporting the
repurchase of stocks, as investors was to exit the strategy. The valuation at exit will be
deemed at the market value of the shares that has been purchased by the investor. The market
value will be deemed with the performance of the organisation and its capability to sustain
higher growth and expansion in future. There is possibility, where the performance might not
be perfect in real world experience. In this particular scenario the assets bought will be sold
to pay off the investors and continue with the operations.

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18
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Björlinger, K. and Johansson, S., 2016. Equestrian Tourism in Trinidad: Every horse has
something to teach, every human something to learn.
Buchmann, A., 2017. Insights into domestic horse tourism: The case study of Lake
Macquarie, NSW, Australia. Current Issues in Tourism, 20(3), pp.261-277.
Chambers, I. and Humble, J., 2017. Plan for the planet: a business plan for a sustainable
world. Routledge.
Ekegren, C.L., Beck, B., Simpson, P.M. and Gabbe, B.J., 2018. Ten-year incidence of sport
and recreation injuries resulting in major trauma or death in Victoria, Australia, 2005-2015.
Orthopaedic journal of sports medicine, 6(3), p.2325967118757502.
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180.
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Pearson.

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