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Profitable barns

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  • Profitable barns

    How does everyone manage to run a barn and stay in the green? In the process of growing my barn but want to make sure I stay profitable. Placing new fences and general upkeep costs money. Small hunter/jumper barn and in a great location.

  • #2
    Originally posted by rimatthews09 View Post
    How does everyone manage to run a barn and stay in the green? In the process of growing my barn but want to make sure I stay profitable. Placing new fences and general upkeep costs money. Small hunter/jumper barn and in a great location.
    How does everyone? Or how does anyone? 😃

    Comment


    • #3
      Not sure how she does it, but Danielle Vigue (Vigue Performance Horses) in Battle Creek MI seems to have it figured out. She took over the facility at Battle Creek Hunt Club and has improved the place 100% ---barn is full, pastures maintained, arenas nicely groomed. Horses seem beautifully kept. It's a reining barn, if that makes a difference.

      Our one-time trainer also had a profitable barn --he boarded, gave lessons, and trained ---but to us it appeared that he made his money judging ---the board/training/lessons could probably not have turned a profit --but he was a judge and traveled world wide --again reining was his forte but he could judge about anything. That was Walter's Equestrian Center in IN.

      Although both mentioned above appear to me to be making a good living at their professions --neither is vacationing in the Caribbean or flying to Maui on a whim. They are working daily and most weekends.

      Comment


      • #4
        By starting way, way, way, way in the green and going downhill from there.
        "Dogs give and give and give. Cats are the gift that keeps on grifting." —Bradley Trevor Greive

        Comment


        • #5
          I have been around and in the horse industry for a long time (but up in Ontario). You will never make money just running a boarding barn - you may break even, and do a little better if you don't have to hire staff and can handle it alone.

          The best way to make money/profit is to teach lessons. Have a string of really good school horses (we used to get retired A circuit hunters and jumpers) who knew their stuff and could teach adults and kids a lot of different things. Now this was a riding school of 25 horses/ponies and a handful of sales horses.

          They didn't go to shows as they didn't make as much money doing that. But that is also an option. Coaching at home and away at shows could be good as well, especially if you have a decent show circuit in the area with students who want to show.

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          • #6
            Originally posted by Foxglove View Post
            Not sure how she does it, but Danielle Vigue (Vigue Performance Horses) in Battle Creek MI seems to have it figured out. She took over the facility at Battle Creek Hunt Club and has improved the place 100% ---barn is full, pastures maintained, arenas nicely groomed. Horses seem beautifully kept. It's a reining barn, if that makes a difference.
            OMG! BCHC is where I learned to ride, back in the '60s. I spent many cold winter Saturdays in that indoor arena. Is it still there? Nice to know the place is still going, even if it is under a different discipline.

            Sorry for the detour into nostalgia land.


            "Facts are meaningless. You can use facts to prove anything
            that's even remotely true."

            Homer Simpson

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            • #7
              First of all, very few actually do. Many barns that appear profitable look that way because the owners were wealthy to begin with and can afford to make capital investments or absorb losses because of that wealth.

              I was a pro in the horse world in my early twenties and owned a non-profitable boarding and training business. I have now been in the business world for the last 10 years or so and have a much different take on the equine industry now than I did back then.

              1. Most barns aren't run like a real business and most barn owners have little to no business knowledge or expertise. This is why most businesses fail (even outside the horse world, small businesses have a large fail rate because they're usually started by passionate people skilled in their field who have zero business knowledge).

              2. That being said, one MUST realize that the horse world IS different than the business world at large. You have to run your business with an eye towards universal good business practices but also recognize that good, bad or indifferent, there are things done differently in this world. And while most of it wouldn't fly in any other setting....they do here, and the industry culture is one incredibly resistant to change. I've seen more than one horse business fail because the owner tried to run it per normal business practices, and some of those just don't work in this world (even if they should).

              3. There is no one, singular best way to be profitable. What you must do is essentially business 101. Create a business plan that is absolutely unique to you and your situation. What works for Molly down the street may not work for you whatsoever.

              To begin that, you need to brainstorm:

              What are the strengths of your unique situation (ie. do you own your own barn, but have a mortgage the business must support? Does your family own your barn, creating a rent-free scenario? Are you really good with young horses? Really good with teens with a lot of show experience? Can you keep lesson horses affordably and do you have access to good ones?)

              What are the challenges of your unique situation? (ie. do you have to rent a barn? Do you do a great job managing but aren't the best instructor? Do you lack independent funding/wealth? Is it expensive for you to keep lesson horses?)

              4. With that set of strengths and challenges, you need to cultivate your own business strategy by matching your strengths up with profitable business activities. The best, profitable barns I see are the ones that don't try to be all things to all people. They have an understanding of who they are as a business owner and what their business can provide that not only fills a need but generates profit. They also understand that if their strength matches up with a not-profitable activity (for example, boarding on its own is rarely more than a break even model), then they must come up with a strategy to create profitable activity (perhaps you run a boarding barn but employ a trainer to teach lessons).

              Create your niche. Hone in on what your're good at. Then work on that model until it is as close to perfect as it can be (this is something that few horse business owners do at all. For example, most are content to deal with unreliable staffing issues rather than taking the time to create a staffing structure that works for their business model and for their employees). Then and only then do you think about growth....and that growth must come from within your "flywheel" - within the scope of your business's unique niche and strategy. Some diversification is smart. Too much is fracturing.

              I think the most profitable businesses I know of (and let's be honest here, unless you're Heritage or the Maddens or something, you're not going to get rich in this business, so by profitable I really just mean surviving without too much stress!) are very specific. One program has maybe 12 students, and the owner/pro is great at taking kids from the ponies to the big Eq. That's what she does. She doesn't ride too much, she doesn't run a large lesson program...she delivers a very specific product and does it well. She has some small diversification - develops some young ponies (that can then be leased out in her program), offers a few lessons to non pony/horse owning clients to get them in the door - but those diversifications support her niche rather than distracting from it.

              Another program is a riding academy type of program. They have a large string of lesson horses and a big lesson program. They offer some ancillary services that again, point to the lesson program: boarding, leasing, camps, and in-barn schooling shows. They have one instructor that does take the more advanced kids to the bigger regional horse shows, but the main and most profitable business arm is the riding academy. They haven't tried to be a riding academy AND an AA show barn that goes to indoors. They're okay if a rider moves up through their program and eventually leaves for a more advanced program because they know their business market and stick to it. Their program has grown substantially over the last 30 years.....but they've stayed incredibly focused at doing what they do best.

              Increasing profit can be done three ways - growing revenue, reducing overhead, or maximizing profit margin.

              The step I see most horse businesses forget is maximizing profit margin. Don't look to change your business...look to make it more efficient. Can you provide that same level of services but do it more efficiently, creating more profit from the exact same level of activity?
              Jennifer Baas
              It is the mark of an educated mind to be able to entertain a thought without accepting it. (Aristotle)

              Comment


              • #8
                A lot will depend on land prices close to a metro area with potential clients.

                Where I live basically no young horse pro could afford $5 million dollars to buy ten acres in the metro exurbs.

                So they rent and the cost to rent a barn might or might not make the endeavor feasible.

                On the other hand if you are based on a family farm where the mortgage was paid off 30 years ago you are in a much better position to be profitable.

                On the other hand the temptation to sell that small farm for $20 million would be very tempting.

                As a reality check the average 3 bedroom dog standard suburban house costs about $1.5 million and a one bedroom condo is in the $400,000 and up range.

                Comment


                • #9
                  I have read that a profitable horse business needs to be less than 5 horses (basically one person) or more than 20 (economies of scale).

                  In reality, most just-boarding businesses don't make a profit, they just subsidize the owner's horse habit. It is the riding lesson, sales, or showing side of the business that actually makes money.
                  Janet

                  chief feeder and mucker for Music, Belle and Tiara. Someone else is now feeding and mucking for Chief and Brain (both foxhunting now). Spy is gone. April 15, 1982 to Jan 10, 2019.

                  Comment


                  • #10
                    If you're a good barn owner* - you realize that if you run a very, very well run barn, you will probably break even on your boarding business instead of actually losing money. The money to be made is in training/sales. I look at it this way - we make zero money on the boarding. Training/showing allows us to put food on our table, gas in our trucks, etc. And selling horses, especially ones we've bred, allows us to actually have some savings (but really, all extra money just means we can build more, improve the farm, etc).

                    *If you are unethical, you take shortcuts, ration feed or hay, delay repairs, bill extras to your clients, etc. You might actually make money that way on boarding.



                    Comment


                    • #11
                      Depending on the area you are in, consider raising prices in order to put a small amount from every board bill away for instances like this. Board should pay you, your employees, cover costs, and provide some sort of cash flow that can be put back towards the barn.

                      If more barns charged appropriately instead of at the break even point, it would become the industry standard.

                      Comment


                      • #12
                        Originally posted by Mac123 View Post
                        First of all, very few actually do. Many barns that appear profitable look that way because the owners were wealthy to begin with and can afford to make capital investments or absorb losses because of that wealth.
                        This, exactly. I would say this is the most common scenario of a "profitable" barn.

                        Many "profitable" barns are also barns where the business owner has a "free rent" situation where they work out of a family owned premises that they do not have to pay for. Alternatively, they are barns where family money or spousal income pays for the large capital investments. Even in these scenarios boarding is often a break even business.

                        A third scenario is a trainer that is fortunate enough to be supported by one (or several) extremely wealthy clients who don't look closely at the bills and/or are willing to pay exorbitant prices. This scenario is something many trainers desire, but being the pawn of wealthy clients isn't always what it is cracked up to be. Wealthy clients may not have realistic expectations where horses are concerned and the pressure for success (and intolerance of failure) can be intense enough that it leads trainers to do things that are not ethical.

                        Lastly, there are a couple of barns out there where the owners work like crazy, take great care of the horses, provide tons of extra services (lessons, training, sales, layups, etc.) charge what seems like exorbitant prices and are able to earn some $$. Not a lot, but something.

                        As an aside, I am going to take issue with Janet 's comment about boarding barns "subsidizing" the owner's horse habit. And Janet, I apologize, because I think this is probably the first time I have disagreed with you I think your posts are consistently informative and wise. Over the years as a boarding barn owner who also rides and shows I have numerous times had people insinuate that they feel like their board payments are "subsidizing" the BO's horses and that that is somehow "unfair." IRL the opposite is true. While I (and many other BOs) do indeed tend to put any "profits" of my boarding business back into both the facility and my own horse endeavors, the reality is that I absolutely would have MUCH more money to put back into my own horses if I spent my time (and my investment dollars) doing just about any other type of work besides running a boarding business. IRL, a boarding business involves an enormous capital investment, expensive maintenance and labor costs, and a tremendous amount of oversight and hassle at all hours of the day/night, and more likelier than not boarding checks aren't adequately paying for that.

                        Personally, when I go to another facility and pay a fee for the use of the facility for a lesson, clinic, show, or other event, I feel a sense of gratitude that other people are willing to invest in things like horse farms, which give little return in the way of financial benefit, but which add so much other people's lives and to our community at large. I am wealthy enough now to own a facility and run a farm, but throughout my life I have been able to have many wonderful equestrian experiences thanks to farm owners who have been generous to open up their facilities and their land to clients at a cost rarely reflects (or rewards) for what that facility actually costs to own and maintain.

                        Comment


                        • #13
                          As a business consultant by trade, I have paid attention to the facilities I've encountered over the years. I can honestly say that I know of only two specific business models that appear to be profitable, excluding inherited family wealth subsidizing the endeavor:

                          1. A lesson barn with a large string of el-cheapo packer ponies/horses with several instructors teaching lessons every day, all day on the weekends. They conservatively do 15 lessons/day weekdays and 30 on the weekends. There are a handful of boarders who all understand the nature of the barn. They host a couple low-level shows each year which are well run and attended. They go to a few local schooling shows annually and a few B-C shows as well. Once their kids move beyond 2'6", or have an itch/talent to do rated shows, they have a network of show barns they recommend. This barn also has a very large IEA program (like 30 kids), which is VERY profitable. This owner knows their niche and has mastered their lane. They have turned out some very successful riders that have gone on to do big things and are happy to see their kids succeed.

                          2. A small niche AA show barn that ONLY works with 15-20 clients that all own their own horses and pay a premium but fair fee for full training board. They only offer lessons to these clients. They are quite selective about who they work with but for the right rider, mostly AO, it is nirvana. Their facilities are well maintained with both outdoor and indoor rings, the horses are well cared for and trained. They spend a 6 weeks in FL each winter and most of their clients show at least a few of those weeks.

                          For the life of me, I have no idea how most barns survive otherwise, without the largesse of the Trust officer.

                          Comment

                          • Original Poster

                            #14
                            Y'all have been amazing. So, let me expand. I have been presented with a unique opportunity, I trained in the Houston area for while and then circumstances had me move to Abilene where I wasn't teaching or training anymore. We moved back down to Houston area and started boarding my horses at a place in Montgomery. It's beautiful, 40 acres, great grass, has an two arenas, trails, etc. Here's the downside; there are three buildings on the farm and none are finished. There is a 12 stall barn that I use but needs just a little bit of work to make it finished and an apartment that I really want to live in to continue to grow my business. The barn owners are gone a lot and I take care of their horses while they are gone, on top of taking care of my horses and the client horses. My business is continuing to grow and is flourishing better than I had ever hoped. That being said, I need a few more pastures, arena lights at some point in time would be great, but primarily I'm concerned about the lack of pastures. They have the material to finish a couple pastures but have not put any up. I want to stay here, they are truly great people, and continue to grow my business even more. Previously my boarding/training situation was run out a friends place who had the room and everything was already set up. Here, there does need to be some improvements made but with the location, I have no doubt that money can be made. Proven by how quickly I have grown in the last few months. We (barn owners and I) have been throwing out ideas about investing in the property to make this happen and then I think they finally realized that they want the property utilized but don't want to pay to do that. Which is fine, I get that, What I want to do is buy the front barn/house and 5 acres and then lease the rest of the property, aside from their barn and the big pasture that their horses stay in. I just have no idea how to create the business plan, business pitch, whatever to make this happen. I also would like to get a small business loan or a personal loan to fix a few things. Since I'm trying to buy the front barn, I don't mind putting my money into some of the land. I'm not planning on going anywhere any time soon, so I think it would pay off. So, long story short I need advice as to how to make this happen. Thanks, y'all!!

                            Comment


                            • #15
                              rimatthews09 I won't do the work for you, but I'd be happy to help walk through this with you if you want to PM me.
                              Jennifer Baas
                              It is the mark of an educated mind to be able to entertain a thought without accepting it. (Aristotle)

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