tracking horse expenses

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:

Designing the barn the right way

Balancing the Sweet Spot: Labor

Balancing the Sweet Spot: Feed

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:

The role of the barn manager

Irritations as a barn manager

Irritations as a boarder

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. 🙂

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5 Responses to tracking horse expenses

  1. A while back I was offered the opportunity to take on the lease of a boarding barn. After working through a business plan and taking into account all of the likely and popssible expenses I said “no” to the opportunity. Sometimes an equestrian business proposal just isn’t going to make money.

    • horseideology says:

      Exactly. I can only think of two scenarios that will “make money” in my area.

      1.) A high dollar show barn, with over 30 horses, that has a trainer who attracts clients willing to pay high fees with most, if not all, horses being in lessons and/or training as well as showing;

      2.) A small family run operation that is looking for extra money (in addition to a stable job outside the farm) in order to improve the property and let one spouse stay home. Here it becomes able to provide a desired lifestyle, but not one that will make you rich.

      Anything that falls between will never make money and will need to be viewed as a hobby or tax deduction.

  2. Over here I’d say that a profitable operation has to own the land and buildings and be large enough to pass a critical mass of probably around 20 horses OR be larger (say 30-40 horses), pay long term low rent and be very efficient. In either case the manager must do a lot of the work as it’s too expensive to hire in much labour.

    The things that I have seen kill businesses are excessive rent (land owners think that everything to do with horses oozes money) and plain bad management. High insurance premiums and land taxes are also problems.

    • horseideology says:

      From talking to others that I know in England, I do think the property taxes and mortgages are quite different then here in the U.S. JMO but I think it is more affordable to own land here, especially if you are willing and open to move to any state (i.e. California will never be cost-effective to own land).

      For example, one area we are considering a move too I found a 10 acre property for $200,000 USD, which already has 8 paddocks with shelters built, a large enough barn for hay and tractor storage, four in barn stalls, covered parking for trailers, and a 3 bedroom house with 2 car garage.

      OTOH if I was looking for the same on the east or west coast the price would not be affordable to me or cost productive in running a stable.

  3. Pingback: Choosing a stable for you and your horse « Horse Ideology

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