Friday, December 16, 2016

Preserving Colonial Spanish Horses: Various Business Models To Consider

I am delighted to be receiving so many questions about this vital and boring topic. (Kids this is the grown up world.)

Some broad considerations first--why do you want to prevent the extinction of the first horses of the nation? Is this a whim or an inspiration? What lifestyle changes are you willing to make to make it happen? Does it bother you that no one close to you will understand why you are doing this? Do you seek to have only a breeding program or do you also want to build a program to radically improve the lives of people?

Do you, in any way, have the slightest regard for the approval of the established horse world? (If so stop reading and go breed whatever modern horse is the fad of the moment.)


If you want complete control over the operation you will need to run it as a for profit business. Three main models come to mind:

1. sole proprietorship--advantage easy to set up, huge disadvantage--no protection of corporate laws.

2. partnership--advantage brings in additional operating capitol and management energy, disadvantage--partners are humans and interaction with humans is fraught with potential problems, partnership agreements should be in writing and prepared by competent legal counsel.

3. Limited Liability Corporations--advantage provides protection of corporate laws, likely can be taxed as a subchapter S corporation--disadvantage (though a very small one) entails legal fees to create and manage.

I believe very strongly in working to save every penny possible by doing work yourself except in regards to legal and accounting advice. Hire and pay a real lawyer. In fact, for  most people the previous sentence is by far the most important sentence in this post.

If you use a for profit business model keep in mind that making a profit must be the primary goal. You must make business decisions with that in mind. Sounds great, but it will limit your ability to build a program.

Non-profit status:

More than one form of non-profit  status exists. Everyone has heard of 501 (c) 3 non profits, but the 501 (c) 5 breed conservation nonprofit might be better for you. Before deciding to pursue non-profit status research everything that you can about the pros and cons of doing so. Do not do the research with an eye towards being able to save money by completing your own filing forms and application. Instead research enough so that you can carry on a meaningful conversation with the attorney and accountant that will be advising you.

Do not be your own lawyer. I am a lawyer. My wife is a lawyer. I still obtained the assistance of legal counsel to prepare all of the paper work. This is too important to skimp on.

Carefully consider who you ask to serve on your initial board. Take on no one who does not absolutely understand your goals and motivations. If you seek to create a bland, ordinary riding and breeding program that differs from other bland, ordinary breeding and riding programs only in the fact that your horses are more athletic, affectionate, and hearty than other programs', then, by all means, seek out bland, ordinary people to join you in making that vision a reality.

If you want to be part of the revolution that seeks to improve the quality of horse's lives by practicing natural horsemanship, natural hoof care, and natural horse care it is imperative that those on your board understand and completely share in those goals.  (I would type this in bolder print but there is no print big enough to do this point justice. Do not seek to put new wine in old wine skins.)

Revolutions take commitment. More commitment of time and energy than most people imagine. For many years now I have been a prosecutor. I spend as much time with our program as I do with my actual job. That means that there is little (actually no) time for other things. That suits me.

Would it suit you?

Let me give you a example of what I mean. Tuesday night I was returning from Corolla where I had been at a meeting of the Board of the Corolla Wild Horse Fund. I was returning in the dark. I found myself surrounded by scores of new businesses, houses and entire neighborhoods that I had never seen at night.

That was within 20 miles of my home.

No, I don't get out much.

You need to decide early on if being a part of building a revolution is worth that to you.

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