If you like a challenge and are inspired by your dreams, the thoroughbred industry is right for you. However if you do not have a full appreciation of the pitfalls you are guaranteed to experience, your dreams will become nightmares. If approached incorrectly this is an industry which can quickly turn a large fortune into a very small one.
If you want success here is what you need to do.
The first piece of advice is to have a clearly defined goal or goals. Make sure these are realistic and attainable relative to amount of funds you are prepared to commit (seek advice on this point if you are unsure). These goals could be, I want to race a Melbourne Cup winner, or I want to breed a Golden Slipper winner, or I want to make a profit from my racing and breeding. That’s your starting point.
The second piece of advice is the most important you will receive. Regardless of the size of your investment, RUN IT LIKE A BUSINESS.
RUN IT LIKE A BUSINESS.
RUN IT LIKE A BUSINESS.
As many of you would know, running a successful business is not all beer and skittles. It requires an abundance of your time and a lot of thought and planning. It requires dedication, discipline and resilience. It requires employing the right people with the correct skill sets for the tasks at hand. As the proprietor of the business you get to steer the ship. In order to start the ship off in the right direction it is necessary for you to have a profound understanding of the business you are in. If you are entering or have entered the thoroughbred racing and breeding industries without this level of understanding, unless you are prepared to hand over or share the “captaincy” to someone else whom has this knowledge, the most likely outcome is financial misery, plus plenty of despair and heartache. At best your results will not meet your expectations and at worst you will be defeated, leaving the game with unrealised dreams and much poorer for the experience. Sounds harsh, but it is the truth. Get it right and you will be rewarded with the outcomes you’re looking for.
Every year the thoroughbred racing and breeding industry watches a vast array of wealthy and successful people enter the game with lofty ambitions and dreams, only to see them spat out at the other end disillusioned and financially worse of, a great deal financially worse of in many instances. As an industry professional this is something I hate to see. The attrition rate need not be as high, however, unless these people are prepared to seek out and act on sound advice from the commencement or at some future point in time, this is the scenario which will continually play out.
Some of the most common mistakes which help to accelerate people’s departure from this industry are:
1) Asking the wrong people for advice.
2) Acting on wrong advice.
3) Not accepting good advice.
4) Not asking for advice.
5) Failure to keep control of your ego.
6) Dreaming too big and making no allowances for anything to go wrong.
7) Heart ruling your head (occasionally is OK).
8) Making decisions based on inadequate or zero homework.
9) Making high risk plays when a more sensible approach is required.
10) Very little or no future planning which leads to incorrect choices.
11) Paying too much for horses.
12) Buying bad horses.
13) Holding onto bad horses for too long.
14) Over estimating the value of your own horses in a sales situation.
15) Refusing to sell a horse for a price well in excess of its value.
16) Passing in at auction bad or below average horses because the market doesn’t value them as highly as you think it should.
17) Breeding mares to uncommercial or risky commercial stallions and then expecting there to be a market for mares in foal to these stallions or for foals by these stallions.
18) Below average husbandry.
19) Penny wise pound foolish. An owner will invest thousands or millions of dollars on bloodstock and then shop around to find the cheapest farm to keep them on where the management and infrastructure is usually poor. This decision usually ends up back firing via higher than average injuries and deaths, vet bills, lower pregnancy rates, etc, etc.
20) Buying a farm to live on and run your own horses on it, and then not having the necessary skill set, the determination and funds to make sure the farm and the horses are managed properly.
21) Buying a farm to keep your horses on in the hope of saving money and being in control of your bloodstock, only to find it costing you more money and time than you had anticipated, and then unable to find the right people to manage it for you.
22) Over capitalising farms.
If you do not have top class people to assist you from the commencement of your involvement, the third piece of advice is to start off small. Once you’ve made your first investment you must still continue to use sound business practices, however, aim to grow your investment organically. You are guaranteed to hit some hurdles along the way and if you fall, hopefully the downside will be minimal and you’ll be able to rebound quite quickly.
The final piece of advice is keep reading all of the above until it can be recited from memory. Once you can do this, you won’t fail.
If you could be interested in employing Brett Howard in either a consulting or management capacity please call him obligation free on +61 (02) 4938 0011.
Below is a brief outline of what we can do with regards to bloodstock management.
If you employ RBA to help manage your racing and/or breeding stock you will receive
- Efficient and reliable service at a reasonable rate.
- Sound advice based on our 20+ years experience in the thoroughbred industry.
- Peace of mind knowing that your affairs are being competently managed by people who are trustworthy.
- Based on a combination of good management and some good luck – success.
- Bank Account – we can open and operate an Australian account on your behalf.
- GST (Goods and Services Tax) – we can arrange GST registration. Once a client is GST registered, they are required to lodge a BAS (Business Activity Statement) quarterly to the Australian Tax Office. We supply your accountant (if you do not have an Australian accountant, we are happy to provide you with an introduction) with an income/expenditure spread sheet at the end of each quarter and they prepare the BAS return using this information.
- Account paying – we can pay all your accounts with funds from your bank account. We check each invoice for accuracy. Copies of all invoices and bank statements are always provided to you on request.
- Documentation – we help handle Australian Stud Book and Racing Registration paperwork.
- Placement of horses – we can arrange to have your horses placed with reputable trainers and/or farms.
- Horse Reports – are provided on a regular basis. We will also personally inspect your stock regularly.
- Buying and Selling – we can assist in the purchase and sale of your stock, whether at auction or via private sale. For example, if our client has horses to sell at auction and is not present, we can liaise with the consigners in respect of selling the horse, e.g., setting a reserve, approaching potential buyers, etc. Even if our client is present, we are happy to assist in any decision-making. Should our client decide to sell privately, we will use our best endeavours to place their horse. If a client requires us to purchase at auction on their behalf, we can do the pre-sale inspections, organise any pre-sale vet examinations and of course bid on horses as per their instructions.
- Mating Advice and Stallion Bookings – we will use our knowledge and experience to recommend what we consider the best matings for your mare. Each season we book a large number of mares for our clients, hence, we are usually well placed to acquire stallion nominations at the right price and save them money.
- Transportation – we organise movement of client’s horses both domestically and internationally.
- Insurance – we can organise insurance and handle associated paperwork for the client. Includes organising veterinary certificates for the insurance companies, advising insurance companies should a horse fall ill or require an operation, and following up on any insurance claims. Plus we seek out the most competitive rates on insurance cover with recognised insurance brokers.
- The “X” Factor – we aim to obtain the best possible result for our client’s investment. We will discuss with them some of the strategies required to obtain these results. For example what horses to sell, hold or purchase; which stallions to support with their mares; what are the best sales to consign their yearlings/weanlings/mares to; racing programmes and much more. We have been able to achieve some excellent results for our clients. To read about what some of our clients have to say about Randwick Bloodstock please click here.
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