Livery yard start up - advice needed

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dbligh

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About 6 months ago I lent a friend some money to start up a livery yard.

She has good experience of working on and running yards and a host of other useful equestrian experience.

But no experience of running a business. Its now just about breaking even with more liveries on the way.

Currently taking cash/ cheques and paying our rent in cash. Now that it is established, we would like to set up a proper business with bank accounts, insurance etc but it seems like a minefield.

At the moment, I work full time and she works a couple of hours a day to cover our living costs. She also has very bad credit rating, so looks like everything would need to be done in my name.

I really need some advice/ help on where to start with the business side of things. I need a friend!

Please no negative comments, i'm already in up to my neck to the tune of £10k. And no intention of backing out now. Quite prepared to admit that I have been hasty and foolish!

We have lovely happy liveries who all get along and it is a joy to be involved in. They all have comprehensive contracts, which mean they must have insurance etc these were drawn up by a solicitor.

Any advice will be genuinely appreciated.
 
Absolutly no idea sorry

However any chance of doing an evening buisness class or online course?

or go into a bank and ask about buiness accounts and stuff (don't have to mention you already started up the business ... just saying you are thinking about it!)
 
i agree. The current contracts state that we are not liable for any loss, theft, damage, injury to persons or animals and that all liveries must have 3rd party liability cover.

The previous YO ran it this way for 5 years! But I would be much happy knowing that we are covered by our own insurance.
 
From a business point of view, the best thing you can do is to get yourself a good accountant. It does not have to be a big flashy practice, just someone who has experience in looking after the accounts of a small business. Accountants obviously charge for their time, but a good one will help to keep the amount of work they have to do for you to a sensible level.

Also it might be a good idea to go and talk to a few local banks, they will have business advisors who will be able to help you through the minefield of opening business accounts.
 
Definitely get some insurance sorted. If someone were to be injured on site due to your negligence the compensation you might be held liable to pay could run into hundreds of thousands of pounds - easily enough to bankrupt you. Talk to an insurance broker or even as a first step ring the British Horse Society and get their advice on what coverage you need.

Most banks have small business advisors who will tell you exactly what you need with regards to business accounts etc.

You will also need to let the Inland Revenue know and prepare business accounts accordingly - some banks also offer an accounting/tax return service but you can also approach any accountant - negotiate a fixed fee with them... don't let them bill you by the hour.

The council should also be informed as you will be liable for business rates - I'm assuming the yard you rent has planning permission to be used as a commercial livery yard. If not you might be in trouble. There are an awful lot of livery yards round me that operate under the radar, with no PP, but that's up to the individual whether you want to take that risk.

Lastly - good luck! I really hope it all works out for you and your friend.
 
Would suggest you contact the Federation of Small Business asap - have website etc. They are brilliant - the people who work for them are made up of ex bank managers, Chief Execs, Accountants, lawyers etc. I think its a bout £140 a year to belong but they give give you all sorts of help free (to members) from bank accounts, tax and legal advise etc - the advise is all free to their members and worth every penny of the membership. Also contact your local council/check your local papers there should be a local enterprise group which offers help and support for local small business. Again our local branch offers all sorts of free help - including small loans for small business - to qualify you have to attend a days seminar with them, but again can offer all sorts of help from ex bank managers etc. There is plenty of help once you know where to look - then just ask!! Good luck and let us know how you get on.
 
Thanks gedenskis-girl. At the moment I just feel like we need more than luck!
The land has planning permission etc to operate as a commercial livery and has done for about 15 years. We came up against that problem when initially looking for yards. Plenty of lovely private yards out there with no business use!

It also has planning approved for further stables and rennovation of the exisiting ones. So we made a good choice if we should ever need to grow. ALthough that is some way off at the moment. The previous YO spent a fortune on upgrading the fencing, sand school etc which has also been a bonus.
 
It sounds like a great place to run a successful business and room to grow... even better. IMO good livery yards are never empty - certainly where I live any decent yard operates waiting lists.

My friend ran her own yard for a few years - TBH she found it hard to do more than break even. But it can be done. Are you DIY or full livery? Full is obviously more work but does have a bigger profit margin, especially if your friend can do most of the work herself and save on staffing costs. To save money on staffing is there a local college that runs equestrian courses? You could then see about having work experience people.

Be very firm with non-payers. That was the main problem my friend had - people making excuses why they couldn't pay that week. It's hard but try not to listen to sob stories. What tended to happen was my friend would let them off (the we'll pay you next week story), the livery would get weeks behind and then the moment my friend had to be away from the yard - getting feed or whatever - they'd turn up and take their horse away then she never got any money owed. It's doubly difficult if you get friendly with the liveries - people do take advantage. If my friend were to do it over she would keep a professional distance from all the clients.
 
Business link do free short courses I believe and have all sorts of useful local contacts and advice - look them up in yellow pages or similar.
If possible find an accountant in the nearest small town/village - that way they're likely to have more experience with rural businesses. Mine is fantastic and is very relaxed about the fact that I am numerically very dense! Insurance is an absolute MUST - have a chat with the BHS, they have a riding schools/livery yards dept who are extremely helpful. It's not a bad thing to have one person in a business who is focused on the day to day operation and one who concentrates on the practicalities - tax, insurance, finance etc My husband has been such a huge help.
 
Your ordinary BHS membership will not cover you for business activities, but I expect they could advise you on a suitable policy. Remember, you are covering yourselves from potentially being sued for every penny you have, that is why you have insurance; also I believe it is a legal requirement for anyone running a business (not 100% sure about this, but think so.) It certainly is if you employ anyone, and that can mean anyone just coming into help without payment.

If you are not good with accounts, then an accountant could advise you, or even a Farm Secretary.

Contact Business Link, the local number will be in the phone book. Draw up a contract between you and your friend to include what would happen if one of you wanted to withdraw from the arrangement, or became ill and needed the money out. I agree that in some ways it is a good idea if one person concentrates on the financial side and the other the practical, side, but in that case a regular "formal" meeting might be a good idea, just so both people know where the money goes. And that might include taking some notes so that both remember what is decided. Also helps to put your ideas/aims on paper. Business Link should be able to tell you if there are any grants available - at one time DEFRA gave grants to rural businesses, but not sure that they still do this.

Having had personal experience of friends going into business with each other, it can so often end in tears, so a good business like approach is necessary and also think to cover everything in a "what if" (the worst happened) way. Not that anything should, but just to think about it! And have it written down in a sort of Partnership Agreement. Usually these arrangements break down because one party thinks that they are doing all the work and the other party isn't doing enough of the work.

A well-run livery should be successful.
 
Hi,
i have been a YO for 8 years now, i noticed that you are renting the yard? thats the same for me, it makes it a lot harder to break even and to make a profit!
i wouldnt have thought that your friends credit rating would affect opening a business account, unless you want an overdraft/credit card etc.
I use NFU for insurance, i think they are fab, had a bad experience with a broker beforehand, the insurance company can help you with what cover you need.
Businesses often have power over banks, no matter what the size of business, most will offer 12/24months free business banking - ie no fees. As soon as they then say they are going to start to charge you, say you are moving banks, and there is a very good chance they will extend the free banking. If not, swap banks to one that will offer it for free.
I think you should be careful as you say your friend doesnt have a good credit rating, just remember, that could affect you, if its in your name and something goes wrong, not sure how a joint name would work? at least IF something did go wrong you wouldnt be soley liable for any debts etc.
there is a book you can buy about running a livery yard, never read it but maybe it would be some use to you?
We have an accountant to sort all of that out, we just give him a weekly print out of the ingoings and outgoings etc. Dont forget to save all of the reciepts for the yard, plus petrol, phone bills etc.
Good Luck
 
Thanks for all the posts, some good places to start looking.
Its a big step.

Ironhorse.. maybe I should find a husband? :-) maybe I'll do that on a seperate posting.. must be good with animals and fixing fences! (or just have buckets of money perhaps....)
 
Hi,
I work for a firm of accountants so if you are in the south-east you are welcome to pop in for a free advice session. PM me if interested.

In any case:

1) who owns the business? Just your friend? Or you as well? You need to decide on a business structure. You don't have to go the Ltd company route but you need to clear this up as it effects how the business is run.

2) Get a business bank account. Many banks offer free ones. It is essential that you start separating business and personal finances. What have you been doing with incoming cheques without an account for the business? STOP paying them into personal accounts - it makes everything too complex. If she is the only business owner she needs an account to use for it - even just a separate current personal account.

3) Liabilty insurance is a MUST - and NOW. You can't get rid of your legal liabilities as a business just by getting someone to sign what is not a legally binding contract. You ARE liable for what happens on your premises. Get some quotes - we can sort you out with one as well if you want - but get in place ASAP before you need it.

4) Accounts. Start getting everything in order now. If you wait for a year or so - and for the Inland Revenue to come and find you - it'll be a lot worse. It needn't be anything complicated and exactly what you need to do will depend on the business structure.
 
Wow Davebird - Wish I had a friend like you!

If you dont mind my asking - what on earth have you spent 10k on?
Did you take the yard or as a going concern or have to advertise for your own liveries?

is your lease/contract in both names?
 
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