Often Overlooked Expenses When Setting Board Rates
Figuring out what your boarding rates will be doesn't need to be stressful but it usually is and for many reasons. Filling the empty stalls you have is the driving force behind most boarding operations and it can make the difference between making it or not. This is common for most new start-up boarding businesses. If you are struggling to make a decision on what your board rates should be then you are not alone. It happened to me in the beginning when we first opened our stable and I did what so many others have done before me - I set my board rates too low.
I have compiled a list of key components that are important in the total decision on what your rates will be. Without figuring out your expenses with each of theses items on the list there is a very good chance you will become short on revenue coming in each month. When thinking about your board rates and what the market can handle in your area the most common elements that people go to first are the hay, grain and bedding costs. Those are extremely important since hay and bedding will be two of your highest costs every year. The other part of the pricing equation has to do with the amenities you offer. Prices are often set in accordance with what you offer at your facility for your clients and their horses. A heated lounge and bathroom, outdoor and indoor riding arenas, grass course for jumping and private turnout are just a few examples but with each amenity comes upkeep and labor and that can be expensive especially when you have riding arenas to maintain. Also with more horses means more repairs and upkeep and it doesn't always mean more money coming in. With every new horse added will be much added labor to think about.
Here is a list of expenses you should be thinking about when it comes to setting your board rates. These are all important in your financial success.
Business Mortgage/Rent of barn/stable
Mortgage/rent - home or apartment
Accounting and Legal Fees
Barn and Stable Supplies
Grain & Supplements
Repairs & Maintenance of property - fencing, stable area, riding arenas, paddocks, pastures etc.
Seasonal maintenance - snow removal, lawn care/cutting
Utilities (during all four seasons!)
Water Expenses - don't forget about the heater buckets and tanks!
Auto Expenses (Work Vehicles and Farm Equipment)
Taxes-Other depending on the state you do business in
Health & Dental Insurance
This is a short list of some very important parts to business ownership that are often overlooked in one way or another. When you are setting your board rates go over each of these items to make sure you have that figured into your business if it is applicable. One other important element will have to do with your time and the amount of it that you spend in the barn doing extra services. You most likely won't be able to pay yourself much in the beginning and you will probably be okay with that because you are so excited to be finally doing what you love to do. I understand that because I was there many years ago and you can burn yourself out real fast once you are into it daily. Your time is worth something and you are running a business so you need to start thinking of it that way. Figuring out sound financial numbers for your horse boarding stable or any other equine venture is not fun at times but it is a necessity to financial success.
A Common mistake
It is common for most new barn owners to set their boarding rates too low and then they find themselves scrambling to make up the difference of lost income each month. That is a bad way to start out any business and it will add much stress into your already busy day. I encourage you to take your time and figure out all your expenses the best that you can and then estimate a little high for those unforeseen situations. Don't get hung up on what other stables in your area are charging for a board rate. You won't know there finances but you can check out what they offer for services and amenities. It is smart to know your competition and market in your area and what it can bare. You need to be realistic in setting your rates as well and finding a balance in all of it can take time and homework on your part at first.
There is so much that goes into the equation of boarding rates and financial success and it is about so much more then the hay, grain and bedding. Those are the things your boarders will think of but you are going to have to do your homework and dig deep in the beginning. I would love to help you start off with a strong and sound financial foundation in place before the first horses come off the trailer. If you are struggling to pay your bills and are not sure how to fix the financial mess you are in- I have been there and I know exactly what you are going through. You are definitely not alone and I can help you streamline and get your business back on track so you can start enjoying your job again.
If you are new to my blog, then welcome! I wrote my newest book to give you an in-depth look into the business of boarding horses and all that it entails. This post today is one small example of what my new book addresses. If you are boarding horses or are planning on it, please check out, "A Step By Step Guide To Starting And Running A Successful Horse Boarding Business." It is a very comprehensive book on boarding horses and covers every part of it from building your barn or stable to solid barn management. I wrote this book because I realized there is an information gap when it comes to this subject and my goal is to help others so they don't make all the mistakes I made when we first opened our boarding facility. I want you to be prepared for the crazy and wonderful new career you are going into.
Wishing you many blessings in your horse business, Sheri Grunska
We are having a barn management workshop at our facility September 14th-15th, 2019. If you are boarding horses or thinking about it, don't miss this very comprehensive workshop. I will cover every part of business ownership and barn management. Please click the link for more details.