How To Build A Better Horse Business
By Nikki Alvin-Smith
There are two avenues to explore to build a better horse business and to increase your take home pay. The first is to take a hard look at where you can save money, and cut costs though not corners. The second is to increase your revenue. Let’s take a look at the second avenue.
As a trainer the more stalls you have full of sound, trainable horses with a steady stream of training income the better. If you offer rider instruction, then each boarder is a prospective lesson student.
Are you gaining enough revenue from your present occupants? It is wise to check out other horse businesses in your area that provide similar services to those you offer, and make sure you are marketing in the right price point range. This is especially true if you’ve been running your horse business for a while, and have not been raising your rates each year.
To ensure maximum income from your stall space, you could require all boarders to take at least one lesson a week with you. Offer individualized discounted package programs for to entice them to take more than one lesson a week.
You can also supplement your revenue by adding other services and charging for them on a tariff basis. For example, clipping or bathing, show transport, coaching at shows, laundry services etc.
As an international dressage clinician horse barn owners often ask me about the best methods to make money from hosting a clinic. Here are some suggestions that I hope will help. Most clinicians will offer a set price, either per lesson with a minimum number of riders or a daily rate with a maximum number of riding slots. The clinician may also charge auditor fees. The hosting barn owner can add to these rates to make a profit per rider or auditor.
If you have stalls available for overnight stabling, there is a further opportunity to make some extra cash for both the space and the bedding/hay/services provided. A charge for lunch and refreshments at the event can also boost the bottom line if you are diligent in how you accomplish the provision of food and beverages.
Once you are happy that you are gaining the maximum revenue from your present stalls and their occupants, think about adding more stabling or other facilities to your present business. The addition of more stall availability to your property may not be cheap, but there are several ways you can make it more affordable.
Obviously you’ll want to shop for the best structure for the best price. It is prudent to look at modular construction as well as stick built, as modular companies can deliver the building quickly and you can start utilizing the stall space right away. Many larger companies also offer financing options which can provide you with an almost instant ‘on site’ new stable block that is ready for immediate equine habitation. If you finance the building purchase, then your new boarders will provide you with income that will mitigate the monthly loan payments for the building.
Remember when you add structures to your property you are also increasing the resale value of your property.
While I am not a tax or accounting professional, I have significant experience in finances and accounting, and have passed on much advice to my students over the years to help them successfully develop their horse businesses. In my opinion, one of the most often overlooked means to afford the new stall space is the use of tax deductions and amortization of the capital expense. Additionally in some States, such as New York, if you run a farm there are deductions and refunds available through programs such as Farmer’s School Tax Credit.
If you take the initial expense of the new building, you may be able to deduct any loan interest payments, amortize the capital expense and depreciate a sizeable sum each tax season from your taxable income. Every dollar saved is a dollar earned. It is smart to consult an experienced equine tax accountant professional and get all the facts so you can make an informed decision armed with accurate numbers.
The tax savings that help defray the barn purchase price outlay, apply to building an indoor arena too. When you add an indoor arena as an available riding space to your clientele, you can certainly charge more for board fees than previously. This building also provides the opportunity for you to lesson and train all day long and all year long.
Don’t forget to contact your local electric company and ask about matching grants for lighting and dispensations for energy saving add-ons to your building such as insulation.
An indoor arena can also be rented out for community events such as dog trials. I recently saw a lady on Facebook advertising her indoor arena in Connecticut for dog owners to exercise their dogs for $20/hour during the winter months. Very inventive!
As you build your business be on the constant lookout for opportunities to develop revenue streams. Host educational seminars from the local vet, horse sales, local agri-tourism events, intensive training stays and Summer camps, are just some of the myriad of options.
About the author: Nikki Alvin-Smith is an international Grand Prix dressage trainer/clinician who has competed in Europe at the Grand Prix level earning scores of over 72%. Together with her husband Paul, who is also a Grand Prix rider, they operate a private horse breeding/training farm in Stamford, NY.