A rare breed

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A niche specialisation is the secret of Adam Tims’ staying power.

Some guys have all the luck. Adam Tims CA runs a thriving accounting business servicing a glamorous industry that he’s been passionate about for most of his life. He loves what he does, and his clients do too. So how did this long-time fan of racing and thoroughbreds get his big break? “It was quite by chance,” he says. “I happened to be listening to the radio one Saturday morning when I heard an advertisement: ‘Attention all accountants with a passion for horse racing’. And my ears pricked up!”

Tims reached for the phone and spoke to sole practitioner Martin O’Connor FCA. “Martin was looking for a succession plan for his fi rm that specialised in the thoroughbred industry,” he recalls. “I couldn’t believe my luck.” Tims quickly came on board and then, a few years later, he and his partner Louise Morris CA bought O’Connor out and renamed the business Stable Financial.

High stakes industry

“We are a typical business services fi rm,” says Tims. “We offer tax, compliance, fi – nancial planning and business advice – but the real difference is our niche and target market. We mainly look after owners and breeders. A typical client would have 10-15 brood mares, be breeding those mares every year and then the normal business plan is to sell the foals when they are about 18 months old.”

For breeders, this means a sizeable investment is made up front and then a lag follows of about two and a half years. “The foal has to be conceived, carried by the mare, born and then reared before it can be sold,” explains Tims. “A horse typically only gets three or four minutes in the sales ring. So it’s a long, long build up for what could be a good result or a challenging one.”

Clearly this is an industry where you need a lot of capital and a lot of patience. “That’s why high net worth individuals are typically involved,” says Tims. “Often they have other businesses – successful businesses – that fund the horses.”

Given the highly speculative nature of the industry, Stable Financial encourages clients to apply proper business fundamentals to their investments. “The clients who come to meet us on at least a quarterly basis and take a strategic view, comparing actual versus performance budget and looking at cashfl ow projections, tend to do better than those who treat it as a hobby,” says Tims.

Finding a niche

Stable Financial is currently in a fi ne run of form, according to Tims. “We’re in a growth phase. The accounting side of the business has grown by 25 per cent in the six months to the end of December 2011, compared to the corresponding six months.”

So what’s the secret behind this success? “I think we’re very fortunate in having a niche,” says Tims. “Our accounting fi rm has a clear target market. I can go to Sydney at Easter for the horse sales and all of my existing and potential client base – nationally and internationally – is in the same place at the same time, all within a 2km radius. I’m worked off my feet meeting up with people. By focusing on one industry we’ve found that, once you’re in there and have done the hard yards, you get known.”

Stable Financial’s network also extends to other accounting fi rms, who seek specialist advice from Tims. “For example, the new ‘non-commercial losses’ $250,000 adjusted taxable income rule affected the industry a fair bit because it is an industry where there are often tax losses,” says Tims. “A lot of individuals involved in thoroughbreds might have adjusted taxable income of more than $250,000. We’ve been engaged to request a private ruling from the tax offi ce, at their discretion, in terms of the nature of the industry.”

Fashion and fillies

As anyone attending this month’s Sydney Spring Racing Carnival could tell you, the image of the racing industry has been spruced up recently. Tims welcomes the higher profi le the sport now enjoys thanks to “the fashion, partying and corporate entertaining” but he’s still a traditionalist at heart. “I’m sentimental and I still think that people come for the horses primarily. You can see the emotion in those moments where you might win a Melbourne Cup or breed the winner of the Golden Slipper. The actual races are still the real thrill.”

Article from Charter Magazine (download PDF)