Business relationship with a trainer

We are talking with a trainer who would like to base out of our farm. Our facility has a lot of amenities; large indoor arena, very large fenced outdoor arena, multiple paddocks (all dry) and 73 acres of land to set up eventing courses etc.

She will need 5 stalls to support her training activities. She wants to sell horses out of our barn as well as give private lessons.

We will be providing stall care, maintenance of the farm. We will be charging her full board for each horse that she has in for training.

I would greatly appreciate your advice re:\ the economics: Is there an industry standard.

  • what % should we capture of horse sales out of our barn
  • what % should we capture for private lessons that she conducts

Are there other things that you recommend we should have in writing?

Thank you in advance

Ask your insurance company, but I think your insurance has to cover her as a co-insured for liability and hers cover you for liability, both ways, or something like that.
Let insurance know and sort thru this, so everyone and all activities and which ones are completely covered.

The deals I know of are more about a trainer renting facilities for a fee and all income from that is the trainer’s to handle, like boarders and lessons and sale commissions.

The simpler the better and be sure to have a date to revise and cancel or renew, maybe once a year.
Have a meeting or three a month or two beforehand to discuss and sort thru any issues that may crop up.

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great comments, thank you Bluey

I’ve not heard of this happening, myself, because as Bluey mentioned, it is far more common for trainers to lease an entire facility. If she is selling her own personal horses, I would liken it to any other boarder that sells their horse - do you take a cut of those sales? Not exactly the same, of course, as the turnaround would be higher and more frequent. If they are selling consignment horses, then a small percentage of the consignment fee wouldn’t be unreasonable, but it might turn a trainer off to training out of your facility since it isn’t that common. If they’re selling consignment horses, I assume they’re charging training fees, which would fall under the below for the second question.

There is no “one” industry standard, it varies all over the map, including plenty of facilities that do not charge trainers to do anything in their facility. There’s about a billion threads debating the subject. I’ve seen anywhere from 10-25%, or flat rates of $10, 15, and even $40 that a trainer must pay to the facility/BO per each lesson and training ride.

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what % risk of her business failure are you taking on? Seems to be zero to me since she would be paying full board …which should include any additional insurance coverage you take on.

So, I am a little confused that you are assuming you have risk thus entitled to reward…so your reward would be equal to you risk…zero

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You would only get a % of the horses she sells if you own part or all of those horses.

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So, re risk and reward: Board alone doesn’t move the ball forward. Board helps the barn break even. Revenue supports facility development.

Cash flow is impacted through lessons, training, sale of horses, etc.

I am asking about risk because I think I know what they are, the value of asking the community is to find out what I do not know…which is quite a lot

I agree w several above - if the horses are all paying full board, I’m not sure how you would request lesson/sale horse percentages. If you are providing lesson horses, that is a different story. If the trainer is keeping your barn full and staying afloat, she may be deserving of a break in board for one of hers.

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That’s not the trainers problem, that board only helps the barn break even. That’s pretty standard. Very little to no profit in boarding.

Yes barns usually get their cash flow from lessons, training, or sales of horses that are done by the barn. As in the people that own the barn. They either give the lessons, training, or do the sales themselves, and/or own those horses. If that’s not possible, there is a slight chance that you can make your money through someone else, but it’s not much.

Some stables do take a percentage or flat rate from the riding lessons. If she trains or sells horses, I am not sure how you’re entitled to any money from that outside of board unless you part own the horse.

You can or course determine what you want out of it and have an open discussion or negotiation, but it’s possible that the trainer decides it’s not worth it.

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Not quite. If you have done your costing right, each boarded horse is paying a percentage of your mortgage. So many people who claim that boarding “just breaks even” mean that the boarding biz is also subsidizing their horses or building a facility that they use as well which is 1. Way better than they would/could build for themselves; and 2. Let’s them write off those considerable costs as business expenses such that the cash flow of the business sucks (and it loses as much money as possible without triggering an audit), while providing the BO with the use and appreciation of a large asset.

No one builds a facility that large in order to house a trainer with five stalls. So I think your facility is either a sunk cost or a real estate investment. It sounds like, no matter what, you won’t be making lots of money from this deal. But then, if you had no other pro, you’d be making no money (but perhaps saving yourself some work and wear-and-tear).

In answer to your specific question:

I knew of one barn in NorCal back in yestercentury that charged horses there for the pro** full board plus 10% of the pro’s income. That could come from lessons and training. I believe horse sales and show fees were left out of the total on which the pro had to pay her 10%.

** I am not sure that the pro’s personal or sales horses were charged full board, as the pro did most of the care for those. Clients’ horses were cared for by the barn (though the trainer did the grain part of the feeding), and those folks paid full care board to the barn. The barn hired its grooms and stall cleaners; the pro had a WS (me) or her own groom if she needed it just to do the tacking-up and special horse care.

In exchange for that 10%, the rings were maintained to the pro’s standards and no other professionals were allowed to do any business at that barn. So another boarder could take lessons with the resident pro, but could not have their trainer come in to give them lessons.

From a trainer’s perspective, they are bringing you 5 boarded horses (complete with one person to herd that group of client cats so that you as the barn owner don’t have to). In theory, and as the CA barn mentioned above sometimes worried about, the pro brings whatever cash flow you get from board to your barn in the first place.

I see why you wouldn’t want to bother opening up your place for one-off boarding with individual owners, but what a pro might bring to the table has value. You may or may not share that opinion.

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if you board your own horses on the farm for free there maybe an issue as then the “farm” has the appearance of a hobby,

When we had our farm as a business we paid the farm to board our personal horses (but it was a wash since the farm paid us lease payments) It was clearly done with the transactions being straight forward, nothing to explain. All boarders paid period. The Farm was an independent operation and it was profitable since it was a Business.

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need to recalculate the board to include the facility development if that is not included as facility development/repair is an ongoing business cost.

Back in the days when I had our businesses operational, there was a line items cost to every contract for even Tools as those were expendable or lost items that had to be replaced…so each contract had a fixed cost added to the contract in the bidding process.

So who owns the property? When it gets sold, who takes the profit? Who pays the capital gains on that profit?

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Thank you all for the very thoughtful feedback. We have a meeting in one hour with the young lady who wants to HQ out of our facility. I spent all day yesterday measuring out a new field to serve as our next paddock to support her business.

Your comments have been a great help. Thank you

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I have boarded in a couple of barns that have rented blocks of stalls for a trainer’s business. One was a bit of a mess. It seemed to be based upon percentages from lessons and sales and there were bad feelings about honesty and use of facilities.

The one that worked well seemed to be a clean rental agreement (not totally sure since I only boarded there) The trainer rented a block of stalls for a set fee, whether or not they were full. The barn provided the basic care. AFAIK there was no cut from lessons. I dont think there was a cut from sales but it was a small part of the business anyway. There were also some set hours that the trainer could not use the arenas - which we other boarders appreciated!

I think the second arrangement worked better as there were predictable expenses for the trainer and income for the owner.

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Perhaps a “haul in fee” for lessons who haul in. I know barns do this. IRT sales horses, I have no idea, sorry.
Be sure the trainer has her OWN insurance, min 1 Million coverage, and names you as also insured (or whatever it is called). The lcoal Equine cneter requires this when shows or clinics are held, and IIRC USDF requires it when a club puts on a clinic using their name.

Talk to your insurance agent about how to protect your interests.

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Agree that you are not owed any kind of % on the sale of her project horses. If you bring a buyer to her, then a finders commission might be in order.

Most property owners WILL charge a haul-in fee to those who haul in to train with her. This pays for wear and tear of the arena and parking area, insurance and utilities

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I’ve never heard of a barn owner recouping a percentage of any sales. If she’s paying full board I just don’t see how that would be fair to her. Arena fees and haul in fees for lessons are perfectly reasonable.

The goal is not to make money off the trainer, your goal is to make money off the trainer’s clients she brings in. You want her business to do well and you want her to teach lots of lessons and you want those clients to move their horses to your place or to buy a horse from her and then keep that horse at your place.

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Full board covers that horse’s care and contribution to wear and tear/maintenance of the facility.

Thus, if she is using her horses, that she is paying full board on, to teach lessons on, their use of the facility has already been paid for. That’s not the same thing as using YOUR horses to give lessons.

Same with sales. You are providing a facility whose use is already paid for in the board for that horse. If you want to charge some sort of trial fee for outside riders coming to try a horse, that’s on you, but it’s not standard.

Haul in fees or fees for non-boarders to use their own horses on your facility, totally legitimate. But a boarder is already paying to be there and nickel and diming never works out in the end.

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Thank you all for the comments. This thread is an interesting one. A number of topics and assumptions are made:
1- what does a monthly boarding fee cover: some contributors look at board as a way to cover the costs of your own horse and enjoyment…ie. let someone else fund your endeavor. Other contributors look at board as a way to cover your mortgage so someday you have a sizeable capital gain.
2- when someone is paying full board what are the implied freedoms?: Can they sell their horse from your barn and not pay an additional fee. Can they give lessons as long as there is insurance coverage…

What I do know is that if your primary business is focused on providing a high level boarding facility:
1- you need to constantly improve the facility; fences, new paddocks, wash stalls, tack room, bathroom facilities, parking, snow removal, landscaping, out door lighting, and security.
2- personnel need to be recruited and trained. Unless you are providing onsite living quarters, seasonal turnover is a fact of life.

So, is it “fair” to negotiate a fee for a trainer to use your farm to showcase the sale of horses? That question is better answered by asking “What value does the farm provide to the person marketing the horse?” Is there a halo effect to pulling into a well landscaped facility? Is there value in having a groomed arena to test ride the horse in? Is there value in accommodating a buyer on Sunday morning or after hours? Is there value in providing an office for the trainer to work from? Is there value in having staff available to greet the prospective buyer and take them to the lounge?..now wash and repeat 5 or 6 times until that one horse is sold.

I believe that in order to run a financially sound boarding facility you need to explore all opportunities to provide value and capture revenue commensurate with that value.

Lastly, a positive and thriving business can only be had when it is good business for all parties involved…in this case, the trainer has to be able to meet all of her business and professional goals. Because we do not want to be looking for another trainer in 6 months…rather a long long professional relationship.

Best to all

Thank you