When David and I were just thinking about starting a business we had no idea how big to make our barn or how many horses we should board on our property. I looked around for books that would help me with a "Magic" formula but couldn't find any years ago. I basically sat down and started playing with numbers to see how they would add up. It was truly a guessing game when I think about it now. I would throw a number out there and multiply it by the number of stalls and that would be my income for the month. Then I would multiply that number by twelve months and it sounded like a lot of money! That was a huge mistake early on. I was guessing on everything in the beginning. We really should have talked to other people already boarding horses in our area but we both didn't feel comfortable going up to someone and telling them we were going to build a boarding facility in the same area as they were located and then ask them for help.
A well thought out business plan is vital for your business!
One of the best things we ever did was write up a business plan for the bank that was considering us for a loan. I didn't have any experience doing business plans but after nine months we had put one together and it was truly a wake up call. That business plan really showed us the numbers and projected them for three years out. It also gave us a better understanding of other expenses that many people forget to add in. Writing out the business plan helped us get a better understanding of other costs involved in running a boarding facility. We had to think about the business mortgage, labor, income tax, sales tax (if your state requires it for boarding), insurance, property tax, maintenance, gasoline, electric and so much more. These are just a few of the things that many people don't think about at first. The costs of hay, grain and bedding are the first things people will think about when starting a business.
Remember, the bigger you build and the more stalls you have will bring in more money but your mortgage, maintenance, labor costs, insurance, property taxes and of course hay and bedding will also be more. Your initial numbers might make you jump for joy at the income you see projected for a month but remember that a larger barn comes with a huge price tag. David and I learned that one the hard way. Many unexpected expenses came with building larger facility and keeping it maintained year round. Just the maintenance alone was an eye opener those first few years.
Is there a formula?
When people ask me if there is a formula to finding out if they can make a living at boarding horses, I always tell them to first spend some time putting together a very detailed business plan. Even if you don't need to borrow money put one together anyway. It is truly the best way to start getting an honest view of numbers and money coming in and going out and it will give you a sound formula for starting your business.
What you need to really understand is that it will take about two to three years through all four seasons to get a complete and very true idea of how much it cost to run your boarding barn. When figuring out your income and money going out I would leave a cushion for extra expenses and include that when determining your boarding rates. There are going to be unexpected expenses and they always seem to come at the worst time. Having a cushion in your board rate will help you grow a savings account so you don't have to borrow when something big happens.
Remember it all looks good on paper but once the bills and extra expenses start adding up your income will most likely be less than you expected at the start. The first few years are crucial to making a go of your business and don't fall into the false belief of bigger is better. Be conservative and start small if you need to and grow as your business grows. Be smart and take your time and it will come.
If you would like to know more about how we started Vinland Stables from nothing but empty farmland and a dream than please check out my book, "What it takes to start and run a horse business." It is my families journey into the horse boarding business and I talk about all the mistakes we made along the way. There is a business plan included and why you need each section in it. It is the most honest book you will find about starting a horse business.
I wish you the very best in your horse business,