The IRS will evaluate if you carry out your horse business as businesslike What does this mean? Listed below are questions to ask yourself.
- Do you have a business plan?
- Do you keep accurate records including records of the time you spend on your horse activity?
- Do you market the business?
- Are new techniques used in the operation?
- Are unprofitable strategies abandoned?
The business plan is essential. I was audited after the first year of setting up my horse business as a business. The first thing I did was call an accountant that knew something about horse business’s. In fact the accountant went to the audit with me. I had used a company that set the business up on a Schedule C for small businesses. Setting my business up as a schedule C was one of the problems the accountant stated. The business should of been set up on a schedule F for agriculture. The auditor knew nothing about a horse business. We had to show them the business plan as well as explain the business plan. My late husband was excellent at explaining the business plan.
The business plan is a working tool that provides a road map for an auditor, bank, creditor or others in the horse industry. Business plans should provide a vision and mission statement. The plan should explain the key elements of your business as well as the current status of the business. Plans should describe your current and future goals. List the management structure of the business including the number of employees. Business plans should define your service or product – what is unique about your business, what differentiates it from others in the market, and why will people use your service or product. The plan should define your market – who do you sell your service/products to and how big is your market. In the audit my husband actually discussed the reining and cutting industry so that the auditor became familiar with the horse industry. Plans should list who your competition is and why a customer will choose your business. Business plans should include a marketing plan that describes what outlets you plan to use as well as what it will cost. Financial data is very important. What are your financial projections for the next year, three years, and five years. What do you need to accomplish your projections – money, time, personnel and equipment? A business plan should include income and expense projections, cash flow projections and provide a balance sheet. Last of all the plan should be regularly updated in case you need to change directions in your business.
Today was our first full day in Sao Paulo. After getting a great night's sleep, we started off with a fantastic breakfast that consisted with an assortment of fruit, eggs, bacon, waffles, and juices. The yogurt was in a liquid form that you drink which was weird but it was still very good.
We began with an hour drive of the city on the way to the zoo. We drove through some areas with shops and lots of people (everything was closed because it was Sunday and everyone closes up shop on Sunday) but we had seen some of the shops on the walk yesterday so we knew what they looked like. A lot of the houses that we drove by were gated and very close together. Most of them had little shops with garage doors on their properties which was very different from anything I've seen before. One of the things that stuck me was the streets and how confusing they were. The streets are so crazy steep and drivers were very erratic but we got there in one piece! The Zoologico de Sao Paulo was one of the coolest places that I've ever been in my life. The place was so lush and green and had a huge lake with little islands and monkeys on them! Adrian and Patty took us around the zoo and showed us the highlights of Brazil's animals. They included various types of alligators, macaws, wild cats, as well as many others. My favorite was seeing an ocelot that reminded me of the tv show Archer. The other thing that struck me as odd was how there were domestic cats walking around the exhibits (one of which was in the seal pen) but we found out that they were feral cats that lived there to take care of pests.
We then went to the China Town area and that was nuts! There were so many people and there was something interesting to look at in every direction. The market was full of people getting lunch and shopping around the various tents. For lunch most of us got meat sticks (strip steak) called pichana while a few others tried some of the . Ordering was slightly overwhelming but once we got rescued by Patty we got our food quickly. The language barrier is extremely difficult but we try to work around it using simple phrases that we do know and a lot of pointing at stuff that we want. Amanda and I broke off and looked at some of the tents that were there. Venders had everything imaginable: jewelry, leather goods, clothing, and home decor. One of the things that I bought was a necklace that Patty showed us. It was my name written on a single grain of rice and set in a tiny vial filled with water. It was so cute! I'm hoping that I see some more leather goods later in the trip to see if I can find a pair of boots. The shopping continued on Avenue Paulista where there were more venders and antique sellers. There was music and the boys were dancing the zumba! Once it started to rain we got back on the bus and headed back to the hotel. Dr. Skaar took a few of us to the super market so we could get snacks and a few bottles of water. I got a lemon lime tart that tasted really good. Once back to the hotel again a few of us that decided that night life wasn't for us decided to go swimming and chatted around in the lounge.
And that was the day! I really look forward to tomorrow!