Now many years later and many conversations with other barn owners, I have come to realize that this is a common mistake that many others have made especially when their business is new. Deciding what to make your monthly board rate is difficult when there are so many unknowns in a new business. Raising your rates when they need to be raised is not fun but it is something that is part of keeping a business financially healthy and strong. I didn't understand this in the beginning.
I was so worried that we were going to lose boarders during the first couple of years that I had a hard time raising the board rate. This was poor business management on my part. Our hay and grain was much more expensive than I had projected for an entire year and of course the cost of electric and gas went up every year. Then you need to add in your insurance which always goes up a percentage each year and don't forget your property taxes. Property taxes are almost always an expense that goes up each year and if you build a barn then it could increase greatly depending on where you live. I learned that one the hard way! If you have stalled horses then shavings will probably be your second highest cost next to hay and your business mortgage. There are also things to think about like fixing equipment and of course fixing or replacing all the things that horses will break.
If you have a facility in a region that gets extremely cold then the cost of keeping all your water tanks and buckets from freezing will sky rocket in the wintertime. There is also the facilities that are heated (whether just a lounge or an entire barn), it all adds up very quickly.
There are many things that are vital to keeping a horse barn up and going and they are expensive. Your boarders will not understand this or see the monthly costs to keep your barn running so when it comes time to raise your board it is a good idea to write up a letter to give to all your clients. You don't need to give them any financials but you can explain how some of your costs have gone up and they should understand. Anyone that has gone to the store to buy groceries knows that even milk, butter and others staples have sky rocketed in price.
Coffee or board money!
The one thing that is important for you to remember is that you will always have some people that will tell you they can't afford the board. For some that might be true but in all the years I have boarded horses I have only had two people tell me that they needed to move because they couldn't afford our board rate. For most clients an extra ten or twenty dollars a month will not change anything in their finances. You also need to remember that we live in a society where people will spend ten dollars on a Mocha Latte from a fancy coffee shop just because of the name and not think twice about it. If they can do that then ten or twenty dollars is not going to break them.
To some of you reading this post today, I might sound a little strong on this subject but I am trying to get you to understand that you will be working seven days a week and if you can't pay your bills because you don't want to raise your board you will start to feel real stress and even resentment if you are not careful. Especially when you see a client walk into your barn with a fancy cup of coffee. That is not healthy for any business and definitely will hurt yours.
I encourage you today to figure out your monthly bills for your business and make a plan. If you need to raise your rates then do it and don't look back. If you give great care and your clients are happy then they are going to be very willing to pay more for board for peace of mind. Don't get hung up on what other barns are charging (because you don't know what their monthly expenses are anyways) and you can't worry about upsetting your clients. It is a fact of life that prices go up and your business is no exception.
Remember that many of your boarders have been to other barns already and they know what is out there. They know a good thing when they see it and they will not leave if the care is great. They will give up their fancy coffee before they move their horse over ten dollars if they are truly happy.
Two months notice
Raising your board rates is not a bad thing and most people expect the board to go up yearly or every other year. You are not surprising them. I have found that when I am going to raise my board, I give my boarders a two months notice so it gives them plenty of time to adjust to the new rate and if they would like to leave it gives them time to find another place. I believe they like that I try to make the transition easy for them and I respect them enough to give them a little more time.
If you are reading this article today and you need to raise your board rates but are nervous to make the change, I want you to know that you are not alone and you will get through this. It is never fun but it is part of becoming a business owner and you will learn so much just from this situation and it will make you stronger as a business person. Even something like raising your boarding rates will help you grow more than you could ever imagine. Remember it's not personal, it's business and you are worth every penny.
What you do to keep your farm going and the horses well taken care of is unbelievably valuable and you should be paid a fair wage for it and your clients will come to see that the longer they are with you. Especially the ones that have been to poorly run barns where they constantly worried about their horses care. You can't put a price tag on peace of mind and great care!
If you are new to my blog, then welcome! If you are just starting out in your planning stages of your horse business or need some help now that you are in it, I would like to encourage you to check out my two books. My first one, "What it really takes to start and run a horse business" is my families journey of starting our horse boarding business and about learning from our mistakes especially during the first couple of years. My second book, "The Total Horse Barn Management Makeover," is about the relationship between the barn owner/barn manager and client and how to resolve the issues that will come up when you are running a horse business of any kind. The books compliment each other and give you a complete look at horse barn management. You won't find more honest books out there about running a horse business.
Wishing you many blessings in your horse business,