One of the recent searches that came to my blog was “how to track horse expenses” and since this has relevancy to a decision I’ll be making soon, I thought I’d expound on it. Another search was “how to make money as a barn manager” which is also related to the cost of keeping horses, whether you are a boarder, barn owner, or want to keep your personal horses on your farm.
Here is the reason most horse people do not make money in this business – they do not understand the need to record expenses or income. I’ve been around a lot of horse people, and most operate on a cash basis. They take money for lessons and training, never reporting the income to the IRS, and then turn around and spend it just as quickly.
Case in point: the trainer I worked for in college loved flashing around a huge wad of cash after she sold a horse. That wad of 100 dollar bills was impressive but even then at the young age of 21, I knew that she didn’t understand that the horse she just sold cost her 8 months in boarding fees. How much did she really make after she tracked the training rides, the feed, the barn help (me), the land cost, the showing fees etc… Not very much…
If want to run a money making barn you MUST understand how to minimize your expenses (i.e. land, feed, hay, labor and maintenance) while not sacrificing the safety and well being of horses and humans. Most horse folk don’t even understand that sentence let alone know how to do it.
1.) Track ALL expenses. I do this with my blog but of course this can be done in many different ways – and the simplest is an Excel spreadsheet.
2.) Understand how barn design increases your costs. The more the horse is stabled, the higher the cost of operation. The less land you have for grazing, the higher the feed bill. A higher density of horses results in higher maintenance costs (i.e. damage to fencing, stall walls, gates, roads, arena, more time scooping poop, watering, etc…).
See the blog posts:
3.) Treat your business like a business, not a hobby or an amusement. This means getting business advice, writing a business plan, consulting professionals in the field (i.e. equine attorney for contracts, equine CPA to understand agricultural taxes, Extension Agents, etc…). This is an upfront investment in time that pays of in the long run as it prevents costly mistakes.
I know you thought that all it took to run a barn was to love horses! Well, that’s all it takes to run an incompetent barn that doesn’t make money and pisses people off. The reality is it is a lot more then loving horses….
See the blog posts:
Some quick thoughts about how to make money running a boarding facility ….
1.) If you are small establishment – family run, live on property – keep horses in as natural an environment as possible. While the outlay for land size will be more expensive then a smaller acreage, the savings in hay, feed, bedding, stabling, maintenance and labor will be re-couped.
2.) Realize how many horses you can really keep and stick to it. Don’t be persuaded to take in more horses then your land can support – your increase in boarding income will be offset by the increase in feed, labor, maintenance etc… costs. Eventually, those “few extra horses” will put your farm in the red.
3.) If you have a deluxe stable (horses generally stalled, little grazing, fancy barn, indoor arena), realize that most income will not be from boarding – it will be from lessons and training. It’s why big, commerical stables have policies that require their boarders to take lessons or put their horse in regular training in addition to their monthly payment.
4.) Buy quality feed and hay. The investment is little when you weigh it against medical bills, colic incidents, thin horses, and pissed off boarders. People immediately and instinctively want to skimp here, but these are not the highest costs of running a boarding establishment – that would be land payment, labor and maintenance (i.e. fence repair, arena work, gravel etc…).
5.) Invest upfront in needed equipment such as a tractor and ATV/Golf cart to tour the property or run chores (i.e. move manure, feeding etc..). Without at least a tractor, running a horse establishment will be back breaking and frustrating. This actually includes quality fencing – poor fencing could result in a dead horse and a lawsuit (yes, I’ve seen that happen too).
If you have a specific question for me to address, do so in comments and I will reply. 🙂