This website is the one I've been searching for, for years; a compilation of knowledge on all things horsemanship, including practical advice on how to start an equestrian business.
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Do you have a scenic or unique property? Or a picturesque space for events? So beautiful that people might pay to use it? Turning your space into a venue is a great way to start a business or simply make some extra cash, but it does come with its risks. Today, we are breaking down everything you need to know about legally opening a venue on your property. Read up on our tips for creating the perfect venue and keeping it protected!
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We would like to thank our trusted venue advisor, Lindsay Lucas, for the insight into building and running a venue, provided below. Opening a venue on your property requires a delicate balance of business acumen, legal consideration, and market insight, and we greatly appreciate Lindsay’s years of experience after working with hundreds of venue owners around the country. If you’re considering opening a venue on your homesteading property, we encourage you to find more information from Lindsay here.
Opening a venue on your property is so exciting! There’s so much possibility and it can be easy to get carried away. So, before you get too far along in your planning, make sure you do your due diligence.
Start your planning by running some marketing reports. Look at national, regional, and local data to get a feel for where your target customers are at. This doesn’t have to be an in-depth marketing analysis, but you need to find out if this is a smart investment to make.
For example, maybe you are looking to turn your barn into a wedding venue. Take a look at the demographics of your area. Are there plenty of young adults in the area who are likely to tie the knot soon? Check out competitors, too. Are there other rustic venues nearby that are already established in the community?
Not sure where to run your report? Census data can be a great resource for investigating at the regional and national levels. If you want to take a closer look at your local population, check out Prizm. This software can show you important demographic information, but it also sheds light on the lifestyles and subcultures in your community.
Before you break ground on your new venue, you need to make sure you can legally open a venue on your property. Most city and county governments have laws about what business you can conduct on your property.
Talk to your local government to determine any licenses or permits you might need to obtain before opening a venue on your property. And, be sure to check out this post about zoning laws.
Now that you have a better idea of the people and the laws in the area you are serving, it’s time to crunch some numbers. Follow these next steps to plan out your business model.
A limited liability company (LLC) is a business entity that provides enhanced liability protection for the business owner, and the tax benefit of a partnership. Your LLC is created and governed by your specific state’s law, and it can have one owner or multiple owners.
LLC’s have many advantages over other business formations: Unlike corporations, LLCs don’t have annual meetings and record-keeping requirements, and LLC’s can elect how they are taxed (if as a partnership or an SCorp, business profits and losses “pass-through” to each owner’s individual tax return).
There are four main steps to sufficiently forming your LLC: filing your articles of organization with your state; getting your EIN number, opening your business bank account, and drafting an operating agreement. While of course, it’s always best to do things right from the start, you don’t technically need a lawyer for steps 1-3. And in order to have a legitimate business, you cannot afford to overlook any of these three steps.
LLC’s are formed when you file the proper paperwork with your state- typically called the “Articles of Organization”. The form is simple enough, and if you know the answers to certain questions, you don’t need a lawyer to help you do it. An operating agreement is basically the “contract” that will govern your LLC. They’re actually not required in every state, but most banks will require that you have one in order to open a business bank account. The operating agreement will set forth how distributions and losses are shared, how the LLC is managed and taxed, how members can sell or replace shares, etc. Are you unsure on if you’re going to add new members to your business someday? Your operating agreement, if written correctly, will cover all of this. How can your LLC be dissolved, restructured, or “wound up”? The language that you use in your operating agreement is imperative: if your LLC is involved in litigation, it will be considered an enforceable contract by the court.
You can find my own operating agreement in the Shop, here.
This is critically important: run a due diligence search before you begin operating a business (including a venue) with any name, logo, or begin to spend money on branding.
Sometimes, you will get lucky, and spend thousands of dollars on branding, only to later find out that there are similar names out there, and you hustle and get your application in first.
In other instances, you try to do the right thing: you hire a designer to create your professional branding, and then you hire a lawyer to run a due diligence search…only to find out that there is a name nearly identical to yours out there, that can cause confusion in the marketplace. This can be a heartbreaking discovery, and while it is difficult to go back to your designer and pay to rebrand right off the bat, better to do that than get sued.
Then, there are those other instances, where you go through the branding process, you use your name in commerce for months, maybe even years, and then you decide to get around to trademarking. Except, when you (or your lawyer) runs the due diligence search, some similar names arise, but you decide to trademark anyways. However, this act of filing your trademark application puts those businesses on notice (because savvy businesses have a team of lawyers watching what trademarks get filed), and they oppose your application. They don’t just oppose it, they follow it up with threats of litigation, and sometimes, will wind up “settling” with you for a “nominal” 5 figure annual licensing fee.
It’s heartbreaking to see entrepreneurs go through this, and what’s worse, it’s ENTIRELY avoidable by taking the simple step of running a legal due diligence search before you open your venue.
I primarily practice trademark law at my law firm- contact me here for more information.
The best place to start is to make a list of all of your anticipated costs. Think architects, contractors, construction, permits, venue consultants, software, equipment and more. Then split these into operating expenses (OPEX) and capital expenditures (CAPEX).
Operating expenses are those day-to-day costs that keep the business running. For example, utilities, wages, etc. Capital expenditures are more expensive items that you will use for a long time. Think equipment and intellectual property.
Business plans can get long and complicated very quickly. However, they are necessary for showing bankers and investors that you are a suitable candidate for funding. They show the core purpose of your business and how you plan to fulfill that purpose.
Drafting a business plan for a venue on your property doesn’t need to be a daunting task. When drafting your business plan, keep it simple. Make your points concise whenever possible, and let your passion and drive shine through.
First, describe the venue business you’re envisioning and the services and products you will offer. Another important element is your marketing strategy and analysis. Investors want to know how you plan to identify and attract customers, and how likely you are to be successful doing so. You can include results from your marketing reports here. You can find more on how to grow your customer base below.
Next, you will need to outline the financial planning you’ve done for opening a venue on your property. Be sure to include a detailed budget for your business. This is also where your pro forma comes in. A pro forma is a financial document that includes your financial projections for your business in a given period of time. Banks and investors want to see that your venue can be profitable within 2-5 years.
You can find business plan and pro forma templates here. Also check out our other business articles like trademarking your business name, picking the right business structure, and hiring employees.
If you didn’t already know, you found out in step 3: starting a business is expensive. While some venues are more business-ready than others, even seemingly small renovations can get pricey fast.
It’s recommended to save a “nest egg” of about 20% of the overall startup costs found in step 3 and the living expenses from your personal budget. In the meantime, schedule meetings with banks or investors (or both) to get funding. Show up to these meetings with your business plan, pro forma, and confidence.
You’ve done the planning, you’ve got the money, and now it’s time to make it happen. Though, this part is often the most drawn out and definitely not without its complications. Follow these steps to simplify the building process.
You may already have land perfect for a venue, but for others, it’s time to go shopping. If you don’t already own land for your venue or you need to lease more space, reach out to a realtor who can help you find the perfect place for your venue business.
Once you have your land, hire an architect to develop a computer-aided design (CAD) for your floor plans. Communicate your building’s purpose and the elements your venue should have, which you can find below.
When your design is finished, your architect should be able to recommend contractors they have worked with in the past. However, do some contractor research of your own to make sure you are getting a reliable service at a fair price.
While this step is not a necessity, a venue consultant can ease the process that we just outlined and answer any questions along the way. After all, opening a venue on your property should be a dream come true, not a nightmare!
If you know what kinds of events you want to host at your venue, think about what those event days would actually look like from start to finish. (If you don’t, check out the next section for inspiration!) What extra accommodations will you need to include in your venue to make those days a success?
One of the most important things to have is natural light. While this is a simple design consideration, it can make life way easier for bridal parties getting ready (and the photographers and makeup artists will thank you.) Prioritize having natural light for your bridal suite and vendor areas.
Speaking of bridal suites, if weddings are a big part of your venue business model, this is a must. Design your bridal suite to accommodate at least 10 people. You are going to need more outlets and mirrors than you think. You’ll also want lots of heat proof counter space for hot irons.
To maximize counter space, try incorporating floating shelves into your decorations. This will be a perfect display area to store items like bouquets while everyone is getting ready. A couple other thoughtful items are racks for hanging gowns and low back chairs that make hair stylists jobs much easier.
When thinking about your main event areas, plan plenty of room for guest seating with large aisles. Think about the size of the events you will be hosting. Is this an intimate wedding venue or a large multi-purpose space? Try to allow for 5 or 6 feet of space in your aisles and plenty of room in the back for DJs and other vendors.
Give your vendors lots of space to relax in their downtime and store their equipment. Ideally they’ll be able to take breaks in this space, but still be in earshot of the action in case they’re needed. You also want to provide secure storage that is close to the main reception area but has some kind of security feature. Vendors with expensive equipment like photographers and DJs will appreciate it!
Kitchens are another important area for your vendors to have access to. Arrange your loading and unloading area to be near the kitchen, so bakers and florists have quick access to coolers and caterers and bartenders can get to the ice machine. You may want to consider reserving some parking for vendors that will be rushing to get everything set up. You don’t want photographers circling the parking lot and missing the action.
Include ramps for vendors to unload heavy equipment and boxes with ease. Awnings and coverings are important for unloading, as well as protecting sound equipment from the elements during outdoor events.
Don’t be afraid to ask vendors for their opinions! This is a great way to get invaluable input and build business relationships.
While weddings may be one of your main reasons for opening a venue on your property, don’t limit yourself to them. There are all kinds of events that could bring you new customers and improved vendor relationships.
Love love? Consider hosting one of these romantic events: anniversary party, wine and cheese date night, baby shower, bridal shower, engagement party, marriage proposal, bachelor/bachelorette party, or wedding workshops for couples.
Business Minded? Opening up your venue to businesses is a great way to gain customers and network with local vendors. Try hosting a corporate meeting, press conference, vendor networking event or conference, product showcase, new business launch party, job fair, trade show, seminars, pop-up shop, retirement party, or promotion celebration
Heart for service? Support your community with one of these events: charity and philanthropy events, fundraisers and auctions, educational conference, school awards ceremony, city picnic, municipality events, or pet adoption event.
Life of the party? Host one of these events to reach new customers in a fun and memorable way: local mixer, prom and high school dances, Quinceanera and Sweet 16 parties, sorority and fraternity events, holiday parties, or family and class reunions.
Artist at heart? Let your venue come to life with one of these inspiring events: art show or gallery, fashion show, yoga classes, photo shoots and workshops, craft show, food tasting, garden party, or host film crews for commercials or short films.
Now that you know where and what your venue is going to be, it’s time to determine who your brand is. Brides, Families, and organizations need to see the face of your venue. They need to know who they are signing up to work with on some of the most important events of their lives.
So not only do you need to show them who you are, but you need to share your why. Why do you run a venue? Why is it special to you? If your venue isn’t special to you, why would anyone want to have their special day there? Sharing your why is how you draw people in and build strong customer relationships.
And speaking of sharing, share your event space on social media. Social media is a great tool for finding your audience and staying top of mind. This is where you can share the who and why of your brand. Be sure to share updates during the process of opening a venue on your property. When you’re excited about every step of your developing business, your enthusiasm will attract customers who are planning their own exciting events.
Social media is another great place to connect with vendors. Take notes on vendors in your area. See what’s working for them and if their followers align with your target audience. Show your support by interacting with them and sharing their posts; they’re likely to return the favor.
After reading this post, you might feel a little overwhelmed. There is a lot that goes into opening a venue on your property. Just take it a step at a time, and lean into your vision and what inspires you!
Remember, building strong relationships is key, whether it be with investors, realtors, contractors, vendors, or customers. Be confident in your plans and most people will want to help you where they can. You won’t want to keep around the ones that don’t anyway!
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