When David and I were in the building stages of our barn I had already been advertising to get new boarders to sign-up. We were planning on opening in June but I needed to have my stalls reserved earlier because I was going to have a huge mortgage to pay. I started advertising in January of that year (even though our barn was not completed) and I needed to figure out what I was going to charge for board. Looking back it was a guessing game in many ways. I had a good idea of what our monthly bills were going to be because we had estimated it on our business plan but not many horse people in our area knew who we were and I didn't have a following at the time. We were as new as you could get!
Before I started to advertise I kept thinking about my rates for board. I kept going back and forth in my mind wondering if my rates were too high. Soon I panicked and I quickly lowered my rates per stall before the calls started coming in. By spring people started coming by to see our barn (even though we were behind schedule) and they started to reserve stalls. We opened in July of that year with a full barn and I was overjoyed and relieved.
Many unexpected expenses
After we were open for several months I realized that we were not bringing in enough money to cover the cost of running the barn. We had many unexpected expenses and I quickly started to regret that I had lowered my rates to get potential clients. It was a huge financial error that I would regret for the next couple of years. There was no way I was going to be able to raise the board so soon and we were going to have to find other ways to make extra money. It soon became a vicious cycle of working two jobs and trying to get the business off the ground.
Fear causes poor decisions
This scenario I believe happens to many new business owners and mostly due to fear. I let fear cloud my judgement and because I panicked it proved to be a financial disaster. I have talked to many barn owners over the last couple of years and they also have set their board rates too low and one of the driving forces was fear. They did it either because they wanted to have the lowest rates of their competitors or they let fear drive their decision making. There is a huge fear that as the barn owner you won't be able to fill your stalls if your board is too high and many times the total expenses are not figured into the whole equation.
I now look at the pricing of board in a whole new way. I believe having the lowest rate of your competitors does not help your business at all when you look at the entire picture. Sure you might get one or two that choose your place because it is five or ten dollars cheaper per month, but most people will not let five, ten or even twenty-five dollars stop them from keeping their horse at a well run facility where the care is top notch and they don't have to worry when they are home or on vacation.
You need to remember that most people that have owned horses for a while have been to many of the barns in your area and they are very aware of what each one charges and what they offer. They are also very aware of the barns where the care is not the best.
If I can give a word of advice-Don't set your board rates too low in the beginning. You can always lower your rates or offer a multi-horse discount but you can't raise them because you all of a sudden realize you are not making enough money to pay your bills. That is bad for business and it will turn people off to your place especially in the beginning when you are brand new and trying to make a name for yourself and earn a good reputation.
Take your time when figuring out what to charge and don't underestimate your value. Once you open for business you will be working seven days a week and putting in many long hours. Your time is valuable and you will quickly realize how much work and expense it takes to keep your barn going. Once your boarders see that your care is impeccable and you always put the horses first in all situations, they will be glad they chose your barn and they will be willing to pay you what you are asking.
A business plan is a must!
The most important thing you should do for your business before you open is to write up a business plan. You may not be borrowing any money but a business plan is so important either way. It will give you a much clearer view of your operation and the costs involved and it will also make you think of things you might not have thought of before.
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 love 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. These books will take you deep inside the business world and will inspire and give you the tools to get through those tough days and situations. You won't find more honest books out there about running a horse business.
I want to wish you many blessings in your horse business,