AREION CUSTOM EQUINE EQUIPMENT

Areion Custom Equine Equipment

Jump Rental Business Plan

Brittany Johnson

November 21, 2013

Entrepreneurship

Table of Contents

Page 1: Executive Summary

Page 2: Business Description

Page 3: Plan of Operations

Page 4: Costs, Activities and Industry Description

Page 5: Industry Description Continued and Competitor Analysis

Page 6: Competitor Analysis Continued

Page 7: Strengths/Weaknesses and Competitive Advantage

Page 8: Customer Segments and Customer Details

Page 9: Promotion

Page 10: Marketing Budget

Page 11: Breakeven Analysis and Further Action

Page 12: Financials: Costs

Page 13: Financials: Revenue and Breakeven

Page 14: References

Page 15: References

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Entrepreneurship

Executive Summary:

This business plan is specifically designed to inform employees and investors in the future plans of Areion Custom Equine Equipment (ACEE). After experiencing success in

crafting high-quality tack trunks, medicine boxes, saddle stands and other barn décor, ACEE has recently seen a need to expand in to building horse jumps to rent. Many facilities do not have the ability to purchase, store and maintain high quality horse jump equipment. In response to this

problem ACEE has determined that a need exists for a jump rental service that provides the most modern and well crafted jump equipment to facilities and horse show management. The storage

and maintenance of jumps will be the priority of ACEE and take the burden of storage off of the facilities that host these events.

By allowing renters to view a wide variety of jumps and equipment it enables them to

build consistently unique and individual courses that showcase new and beautiful jumps at each event. Purchasing and storing a full course (many facilities need multiple different types of

courses) is expensive and requires a significant amount of storage and maintenance to keep the jumps in the appropriate condition. Providing rental is an attractive solution to the problems surrounding jump purchase. Over the next two years we will expand our company to a full jump

and arena equipment rental service that provides standards, poles, gates, walls, and filler for a wide variety of equine jumping events. By implementing these changes; we will not only offer

new products to new consumers, but also increase the number of people that see our work all around the equine world.

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Business Description

Mission Statement:

Areion Custom Equine Equipment’s mission is to provide the highest quality equine equipment and level of satisfaction to both our customers and equestrians utilizing our

equipment. Value Proposition:

We strive to provide the highest quality equine equipment without the high cost and hassle of storage, maintenance and delivery.

Description:

Areion Tack Trunks currently designs and constructs quality tack trunks, medicine cabinets, saddle stands, and other barn décor. Currently this company is on a very small scale

and has experienced success amongst individuals that surround the Parker and Elizabeth, Colorado area. My love of the horse and particularly Hunter/Jumper competition has lead me to work with a number of facilities in Colorado including the Colorado Horse Park and National

Western Stock Show as well as a Rodeo Austin located in Austin, Texas. Areion Custom Equine Equipment will be the next phase of this company and will

continue to encompass Areion Tack Trunks. This company will remain located in Parker, Colorado because we feel that it is a good location between a large number of Colorado’s equine facilities including National Western Complex in Denver, The Ranch Events Complex in

Loveland, Norris-Penrose Event Center in Colorado Springs, as well as many smaller farms that host horse shows requiring jumps throughout the year.

I am aware of one other company that rents jumps in Colorado and they do not advertise that they do in fact offer rentals. I feel that there is a demand for this service due to the fact that there is a limited number of companies that provide rentals and jumps and the equipment that go

along with it them are expensive to purchase, maintain, and store. Through renting the jumps it allows facilities and management companies to not have to purchase entire courses and then have

the responsibility of maintaining and finding room to store the equipment. Many of the larger facilities have a limited amount of space and offer such a wide variety of events many of them do not own their own sets of jumps and require the shows to find their own supplier or provide the

jumps themselves. Areion’s services will include the ability via website for individuals to view jumps and

equipment that are available for the dates of the event. From there they will reserve the equipment, select a delivery/removal date and time and the equipment will be delivered directly to the facility of their choice. Areion will be responsible for the maintenance, storage and

transport of all of the equipment relieving a large stress and burden for the customer while ensuring the jumps are well maintained thus increasing the usable life of the equipment.

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Plan of Operations

Resources

Standards/Gates/Walls

Carpentry

1. Hand cutting- We have the talent and ability to cut each jump by hand using saws and equipment we already own. However, for certain jumps and equipment it could become time consuming and costly in the form of labor and time spent per piece of equipment to

construct. 2. Laser cutting- By utilizing Denver Wood Works we can laser cut wood at $120 an hour

the price per piece of equipment will vary based on how intricate the design is because the more intricate the piece is it will take longer to cut. This could be a useful option because it can reduce the cost of labor when it comes to cutting each piece of wood.

3. Ultimately, I feel that using both hand cutting and laser cutting simultaneously benefit this process greatly. Some jumps are easily cut by hand because require less complex

cuts while laser cutting will be useful on more complex and intricate designs. This will allocate money and labor in a more effective way, while ensuring the best use of all of our resources.

Assembly

Standards, gates and walls will all be assembled prior to painting in house. To ensure

the highest quality of craftsmanship, by assembling each piece we fully understand the function of each piece and can ensure that each piece is safe for use in the ring.

Paint

All equipment will be sanded as needed, painted and sealed in house as well. This allows for us to ensure that all of the jumps are finished exactly how we want them to

be from the design to the color and varieties of colors. Poles

I will order precut 12’ poles that are 3 ¼” in diameter for $17 a pole from Pacific West Lumber. We will paint the poles in solids, naturals (burn with torch), and

striped as needed to build hunter and jumper courses. Hardware

Potter Steel in Denver, Colorado will provide key-hole tracks and safety jump cups to

provide the highest level of safety to all of the users.

Partners:

Potter Steel: Denver, Colorado

Pacific West Lumber

Home Depot

Denver Wood Works

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Cost to Build Equipment:

Activities:

Rental Service

Areion Custom Equine Equipment will primarily utilize a website that allows users to view available jumps and organize the equipment they need for the dates of their events. I think

that it is important to offer high quality customer service and it is necessary to have good interaction with customers.

Payment of 10% of the total rental price will be required to reserve the equipment and will be non-refundable, and the rest will be paid at the time of delivery. Upon delivery a contract will be signed and if anything (other than direct horse related accidents) causes destruction of

any of the equipment the renter will be required to pay for the cost or repair and/or replacement.

Industry Description:

Economy- see Diagram 1

o According to the American Horse Council there are currently 9.2 million horses in the U.S., with about 4.6 million people involved in the horse industry as

owners, employees, and care providers with millions of event spectators. After taking into consideration the multiplier effect the horse industry has an impact of

$102 billion on the U.S. economy and provides 460,000 full time jobs. Of the 9.2 million horses in the U.S. 2,718,954 horses are involved in horse showing. Horse Showing produces $10.8 billion to the total value of goods and services produced

by the horse industry. ("National Economic Impact of the U.S. Horse Industry")

Hunter Ring Rental Jumper Ring Rental

20 single colored rails 40 2-3 colored striped rails

13 pairs of winged standards w/cups 18 pairs of winged standards w/ cups

10 gates 12 gates/planks

5 walls 7 fillers

11 pairs of flowerboxes

$300.00 per day + transportation $415.00 per day + transportation

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Diagram 1- United States Horse Economy

In 2013, within Colorado according to the Colorado Hunter Jumper Association (chja.org) 61 horse shows licensed by the Colorado Hunter Jumper Association. Horse

shows such as these are competitions in which jumps would be needed, and locations that will attract companies interested in advertising to spectators, horse owners and riders

According to a poll on HGS.Horse.Forum people spend anywhere from less than $50 to over $5,000 to show their horses at one horse show. The largest number of individuals

(33.93%) paying up to $300 to show their horse per show.

Competitor Analysis-see Diagram 2

Diagram 2- Jump Companies currently renting to Colorado Horse Shows

Jump Company Jumps By Fuzzy The Wild Ranch Jump

Co. (Colorado Horse Park)

Location Franklin, Tennessee Parker, Colorado

Offer Jump Rental? Yes Yes

Currently Rent to in CO National Western Stock Show CHJA Medal Finals, any show at CHP

*It was difficult to get prices for how much these companies currently rent for, it depends

on who they are renting to. Obviously costs to ship jumps to Colorado would be high.

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Jumps by Fuzzy, Inc.- Franklin, Tennessee

o William “Fuzzy” Mayo, has been building and renting jumps and portable horse stalls for over 40 years and has been very successful in his rental to facilities such

as the Quarter Horse Congress, Rolex and the World Equestrian Games in 2010 at the Kentucky Horse Park. Jumps by Fuzzy also provide the jumps to National

Western Stock Show during the Hunter/Jumper event. I feel that Jumps by Fuzzy provides competition, however they do not have a website (only a Facebook page last updated in 2011); this makes it hard for people to find more information about

them and connect to new audiences. Also, being located in Tennessee has some restraints on their ability to consistently rent to facilities in Colorado; this also

adds to the cost that the renters have to pay. I feel that if a rental company was provided in Colorado that the facilities currently using Jumps by Fuzzy might consider using a new company for convenience year round and a lower cost on

transport.

The Wild Ranch Jump Company- Parker, Colorado

o The Wild Ranch Jump Company, housed by the Colorado Horse Park and ran by General Manager Brian Curry provides jumps to all of the horse shows at the

Colorado Horse Park as well as the Colorado Hunter Jumper Association Medal Finals. By being located and financially supported by the Colorado Horse Park this company provides healthy competition. It was difficult to find any

information on this company they have one page with contact information on the Colorado Horse Park website.

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Strengths and Challenges of Areion Custom Equine Equipment- see Diagram 3

Diagram 3- Strengths vs. Challenges

Strengths Challenges

Utilizing high quality, durable materials to

create equipment that will last allowing it to be used for longer periods of time.

Funding to initially build equipment needed to

rent.

Experienced designer and builder that has

produced exceptional jumps and equipment in the past.

Getting our information and service out there

so that people know we exist.

Connections- networking with other facilities and shows throughout Colorado is invaluable

to us as a start-up

Connecting with customers that currently use other sources for their equipment rental needs

Technology- using technology to help ease the building process as well as utilizing social

media and an easily navigated website to help customers.

Customer Service- both the builder and

manager come from a strong horse show background we understand the needs of the client.

Competitive Advantage

Areion Custom Equine Equipment’s competitive advantage is to provide simplicity and ease of mind to our customers. By providing online, over the phone, in person service we are

easily able to help our customers in the way that best suits them. Utilizing social media and in the internet is invaluable to us, it is an easy effective way to inform many different people about

our company and the services we offer. To make ACEE successful in the long run it is imperative to continue to evolve and always make it easy for the customer to get the information and services they need in a timely and comfortable manner. Our collective background in the

horse show business is the key to our success, by understanding the customer and the needs of a horse show in general we are able to build and provide the best equipment and service to every

individual customer. Beginning with building highly quality equipment not only adds value to the product we provide to the customer, but allows our equipment to last and be used many times and keep

repair costs to a minimum. Centering the experience on what the customer wants and guiding them to the appropriate equipment enables the client to feel that they have been helped and are

getting the exact equipment they needed in a timely manner.

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Customer Segments:

Target Market:

Areion Custom Equine Equipment is targeting large equine facilities in Colorado that host at least one horse show that utilizes jumps. By targeting large facilities it is possible to gain more than one client based on the fact that these facilities rent to many different horse shows

throughout the year. The second target market is horse shows that are affiliated with the Colorado Hunter

Jumper Association. Many of the horse shows are hosted at smaller farms and facilities that may not have show quality jumps at their disposal, and some that host them at other facilities still have to provide the jumps for the shows themselves (facilities that do not have jumps to rent).

Product:

Hunter and Jumper Courses

Courses come with poles, standards, safety jump cups, gates and walls. All components of the course can be rented as a whole (customer specifies they need X number of oxers and X number of verticals) or as individual pieces (they only need to rent jump cups or a certain

number of poles). Equipment is delivered to the facility of the customers choosing at the specified time and

will be picked-up when the customer specifies.

Customer Detail:

Relationship

We will utilize a fully interactive website that allows clients to view jumps based on

availability for their particular event. After selecting their chosen equipment they reserve the equipment by paying 50% of the total cost, and specify the date, time and location that they want

the jumps to be delivered and removed. The remaining 50% of the rental cost is paid upon delivery of the equipment. We will have dedicated staff that can be reached by phone to help customers with questions and problems.

Communication

Interactive website

Phone

In-person

Email

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Promotion

Areion Custom Equine Equipment will primarily utilize a website to promote and sell our services to new and existing clientele. Facebook will continue to be a way in which we involve

our customers with the changes and news with ACEE. In order to reach the customers involved with the Colorado Hunter Jumper Association, I would purchase ad space on their website as well as attend some of the events particularly the large ones such as medal finals and the year-

end banquet and possibly sponsor some prizes and/or classes. By providing services to these exhibitors and individuals hosting the shows it will get them thinking about the new jump

company and might inspire some of them to look at what we have to offer. To reach the larger facilities that due primarily rental I feel that it might be necessary to sit down with managers and staff to give them information about the services we provide and

how it can help them and the shows that come to their facility. Sending pamphlets with pictures and more information can be a good way to follow up and peak their interest to look at the

website and follow our social media pages. Many people that have worked with Areion Tack Trunks in the past appreciate the fact that we are people that they know personally and trust. Continuing to have a friendly appeal and

word of mouth will be imperative in promoting the new jump rental business. Offering a promotion the first year we are open that encourages people to initially rent with us and then rent

with us again in the future might help spur a start to rentals. By offering a promotion that allows renters to be entered to win a free 2 day rental for the following season by renting once with us might encourage people to try something new and keep them coming back.

Goals:

1. Inform current and prospective customers of jump rental.

2. Inform large equine related facilities of jump rental services, to allow them to utilize the service themselves and inform horse shows that rent their facility about the convenience of

the new service. 3. Create a relationship with a large equine facility to encourage everyone using jumps to rent

through Areion Custom Equine Equipment.

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Strategies:

Develop website show casing all of the different jumps that we have available to rent.

Allow individuals to check equipment availability and order equipment online to be delivered.

Facebook page update, discussing the addition of jump rentals along with a link to the

new web page. Create and distribute a short informational pamphlet to horse shows and local equine

facilities. This pamphlet will contain pictures of jumps, basic pricing information, and more information about the steps to renting equipment.

Marketing Budget:

Costs- See Diagram 4

Diagram 4- Marketing Break Down

Marketing Tool Cost

Web-Designer $10,000

Graphic Designer $600 to design

$75/hr x 8hrs = $600

Printing $89.99 per 250

Mailing $0.45 x 250 = $112.50

Total Marketing Costs $11,402.49

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Break Even Analysis

Based on the projected operating costs and revenue in order for Areion Custom Equine Equipment to recover the initial costs of marketing and building one hunter and one jumper

course for rental we will have to make $23,844.86. To recover this cost we will need to rent the hunter course thirteen times and the jumper course eleven times (3 days each time).

I would predict to consistently see higher numbers for jumper course rental due to the

fact that the course can be easily changed in to a hunter course just by using different poles.

Therefore, people with a one ring show might be more inclined to rent the jumper course and add hunter poles to save time and money switching the course. Conservatively, speaking I do not

anticipate seeing extremely high number of rentals and I expect to see them steadily increase over time and then balance out. There are a finite number of shows in the area and some of the shows have access to their own jumps or jumps provided by the facility.

Further Action: In the future we would like to seek companies to purchase jumps as an advertising

medium, allowing us to provide jumps at a lower cost to the renters. This would be advantageous because it is extremely unique and could peak interest in our venture from large companies and parties interested in jump rental. This would allow us to maintain quality yet

offer businesses a unique way to advertise to the equine community and its spectators.

0

2

4

6

8

10

12

14

16

18

20

Year 1 Year 2 Year 3 Year 4

Hunter Rental

Jumper Rental

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<http://www.ushja.org/zones/zone8.aspx>.

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<http://www.inc.com/encyclopedia/advertisingbudget.html>.

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<http://www.720media.com/average-cost-web-design-wordpress-colorado-springs-seo/>.

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<http://smallbusiness.costhelper.com/graphic-designer.html>.

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<http://backinthesaddleproject.com/affordahorse.html>.

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Council. N.p., n.d. Web. 13 Nov. 2012. <http://www.horsecouncil.org/national-economic-impact-

us-horse-industry>.

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N.p., n.d. Web. 20 Nov. 2012. <http://print.staples.com/brochures.aspx?cid=PS:

GS:CP:CP:B:28:9132:+print_+brochure>.

"U.S. Equine Market: Feed, Health Care and Services for Horses, The." - Market Research

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