Business relationship with a trainer

[Scribbler]

I think you need to set your boarding fee taking into consideration your own costs plus the going rate for similar facilities.

When people say you don’t make money on boarding, they are taking land cost, either mortgage or lease, into account. Obviously if you just take feed and labor into account, then you are taking on a profit and if your farm was fully paid off, been in the family three generations, that might be an income stream.

What is it you want the trainer to do? Is it just the trainer with 5 horses and you with your own horse? I myself wouldn’t see much point on having a trainer at my private barn unless they were working with my horses. The advantage would be getting a great in-house coach.

Do you want the trainer to be a draw for more boarders and students? If so does this young trainer have enough draw to pull them in?

Honestly your young trainer paying full retail for board is not going to be making much of a profit herself on say two lessons horses and two resale projects. If you do the math, say a $3000 OTB that takes a year to turn into a lower level jumper will cost her over $8000 just for board at a modest $700 per month. Not including farrier and vet. If she can sell him for $15,000 she might break even or make a couple thousand clear profit. If you want 10 per cent of her sales, she is losing money.

Your young trainer is not necessarily realistic about her own business plan. There is no way a young trainer with 5 horses in full board is going to make that much money on her program. She won’t have enough horses or assistants to run a back to back lesson factory. She won’t have space for many client horses. She won’t t be turning $3000 OTTB into $50,000 horses. People won’t pay that kind of money for a horse from a tiny operation.

She will not be a cash cow ATM for you . More likely in six months you will be negotiating a dry stall rental for her or she will sell up and go back to working on a pub or back to college.

[Redlei44]

OP, I don’t disagree with your high level (and very real-world business sounding) goals for adding value. But I very much agree with @Scribbler ‘s post just now and was just about to post something similar. Based on my own past experiences in almost her exact situation and hearing many other anecdotes on this forum and elsewhere, i would put her chances of making herself any sort of living while also making you money at “slim to none”. I also put her chances of barely making ends meet for six months until she sells some horses, realizes she didn’t make any profit on them, and now can’t afford to buy and board any more at about 95%. Sorry to be cute about it but Scribbler says it well - the numbers dont work, especially for a young pro most likely dealing in low(er) dollar sales horses and an uphill climb to build a (hopefully) well regarded and stable business.

You’re not crazy for not wanting to subsidize other people’s business, but you also can’t get blood from a stone, as they say. If you have no other reason for wanting a resident pro on your property other than making some money off of their fledgling business (not just helping defray costs or having a pro onsite to work with you and your horses), it’s tough.

[soloudinhere]

I own four horses, and if a barn owner told me that she thought she was entitled to a % of my selling price when 1. I pay full board, which includes use of the facility and 2. she ponied up exactly $0 for the horse, his costs, or his training, I would tell her exactly where to stuff it.

In fact, my barn owner tried that, and she lost board on 4 horses because she tried to take a cut of something she wasn’t entitled to. My board is what pays for that fancy landscaping. If I want to sell a horse for $80,000, it’s because my horse is worth $80,000, not because you have decorative rocks on your lawn.

I suggest as both a horse owner and a sales business owner, that something is not a viable revenue stream just because you’ve thought of it. It’s only a revenue stream if someone is willing to pay it. Your choice on what you determine your product to be. To me, fencing, footing, etc is part and parcel of having a boarding business in which people are willing to keep giving you money. You can continue to say I’m wrong, but if I’m the one paying the bills, am I really the one who is wrong?

A long term relationship with me would probably not result from someone who was trying to squeeze me for everything I had from the outset. YMMV.

[punchy]

I feel like you’re describing two different things.

1. A regular boarding situation, where you may get a small flat rate for each lesson the trainer gives (more if it’s your horse) but you don’t get commissions on sales, i’ve honestly never heard of that.

2. You seem to be envisioning running a fancy sales barn without understanding what a sales barn is. It’s this: say I have a nice, fuzzy, out of shape horse in my scrubby out of shape back yard and I’ve got scrubby out of shape contacts in the horse world. I send it to a person specializing in sales. They have a nice fancy barn and nice fancy contacts. They give the horse a makeover in 30 days or so: clip, shoe, lose/gain weight, get it in shape. Then they market, and when they sell, they take a nice commission. But you’re not offering any expertise here—contacts in the horse world, training, risk, etc—you’re just offering to walk the customer to the lounge and landscape the garden? That’s not running a sales barn. You don’t get commissions for that. It may entitle you to charge more board, if your boarder cares about stuff like that, but that’s the extent of it.

[Displaced_Yankee]

@punchy

You seem to be envisioning running a fancy sales barn without understanding what a sales barn is.

Or a high end boarding barn (however…getting a cut of horse sales and training? Never heard of that.)

If you want to run the high end boarding barn with top of the line facilities, care and customer service then you better make sure your potential trainer is up to providing that level of clientele. I always mix up the eventing levels, but it would make no sense to cater to a (dressage) Grand Prix level of care when the trainer only ride through Second level. Does you potential trainer have that high end type of clientele? Or does she do a high volume of pony club/4H kids? Is she turning over $8,000 horses or $80,000 horses? For me, when I was professional, I would probably pay a premium for a facility that was already in place. Not one with promises that my monthly rental would go towards improvements. Show me why I have to pay the premium for it first.

And to answer your question RE: right to a commission on a boarded sales horse, no you are not entitled to anything. As a boarder (in most situations) I am paying for the care of my horse because I do not have the time, land, resources, etc to do it myself. I pay you and an agreed upon level of care is provided. I do all my own rides or pay for all my own training and sell my horse. I get the profit as you did nothing to improve its value.

[mvp]

@Brave_Mucker

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

Wait a sec. If you have a young trainer hoping to lease five stalls from you, I don’t think she’s doing sales at the scale that means folks will pay more or less for a horse because you have manicured lawns or not. Also, all the accommodating of the prospective buyers is/should be done by the pro managing the sale. Chances are, that’s what she’ll want.

IME, the pairs of training/farm business that succeed divide the labor so that the farm owner cares for the farm (his asset) and the trainer cares for the horses and clients (her assets or customers). No one will do the care you want for what you own (or what brings you a paycheck) as well as you, so it’s a mistake to have someone else do that.

That usually means farm owners are setting themselves up to hate their leasing trainers when they put that pro in charge of farm maintenance. The truth is that there are not enough hours in the day to run the training/lesson/sales business and do farm maintenance. The leasing trainer also probably doesn’t have all the equipment needed and you probably don’t want them using your stuff.

The farm owner, for his part, often doesn’t know or care about the nuances of horse care that that particular trainer wants. There is a helluva lot of variation in there. The farm owner probably really doesn’t want to have to police every single client or student who comes to the place and needs to know how things go.

I also think that you have a different understanding of the industry and what the farm owner gets or contributes to a horse sold there. I don’t think anyone thinks they should have to negotiate those “freedoms” you mention; I think they take those for granted as part of what it means to own the horse.

Furthermore, no one leasing just five stalls is running the kind of operation that will pay her way. There’s just not enough income in a 5-horse operation to create a full-time job/living wage for anyone.

That’s not to say that this can’t be a great small business for the pro or even that this isn’t the pro you want. But this potential tenant of yours doesn’t have the income stream required to fit into your MBA-sounding business model. The professional that can afford to do what you want is boing to have a much larger, more established business and will need to take over much more of your farm in order to have their side of the equation work.

[GraceLikeRain]

Regardless of the facility amenities this is a boarding situation. The boarder is paying for the quality of amenities available so if there is a “halo effect” they have already paid for access to the facilities so why should they pay twice?

Charging a percent or flat fee for lessons conducted on your property is standard. If you’re interested in having a long term boarder, set the board rate at a level where you feel it is in your interest to have an additional five horses on property. Lesson fees ensure that the additional ring use/maintenance is worth your time.

If you find a pro willing to give you a percent of their sale because you have a pretty barn, I’d expect to be searching for a new “pro” in very short order.

[lenapesadie]

Seems to me that the easiest solution would be to charge a board rate that does turn a profit.

[Scribbler]

There is a halo effect in horse sales. However, beyond a certain point of clean, safe, and professional looking facilities , the halo effect is 100% created by the reputation of the trainer and not the property.

If you want to buy a competition horse in the $50,000 + range, you go to a trainer that has a proven track record in the discipline, and multiple winning clients. You are buying training and professional evaluation. For instance, this kind of trainer can take a $15,000 baby Warmblood and get $50,000 for him a few years later, where a no-name trainer might only get $30,000, for instance, for the same horse. That’s the halo effect.

Putting a no-name trainer alone in a high end barn does not make buyers want to pay more for the horses. The less program and activity around the trainer, the less plugged in they look.

I have visited a range of barns in my area.

There definitely are barns that have had private wealthy ammie property owner money poured into the facilities.

Interestingly by and large they don’t house really vibrant training programs. Indeed they often stand empty because the owners can afford that.

Sometimes this situation creates a conflict in priorities. There are rules and regulations about property use that are more about it always looking tidy than about it being a functional training barn. That sets off my Spidey senses, actually. I can admire the barn tidiness and decor but feel it isn’t a real professional barn, just a hobby farm. So the opposite of a halo effect.

The halo effect would be created by going into a barn that was properly laid out, but functional. And full. It would be created by going into a barn that housed a substantial established busy boarding lessons training show program at the level I was shopping at. Bonus points for catching a client out of the corner of my eye doing something interesting in the arena. Obviously I would have looked up the trainer and clients and horse in question on a shows website. In geberal, the bigger the better for a clientele, up to a certain point.

If I was shopping at this level, I would look up the show results but not care if they had a portapotty or proper plumbing.

It’s possible priorities change at a much higher level. Maybe the parents of chikdren who get $200,000 equitation horses need a heated viewing lounge. But maybe not. Because at that level, sales tend to be brokered by trainers. Nonhorsey mum isn’t allowed to be distracted by the hanging baskets and freshly swept aisles into buying a dud. For trainers, the halo effect will be entirely the other trainers reputation.

So, no, OP, your landscaping is unlikely to add more to the price of a typical “young trainer” project horse.

[TheDBYC]

I don’t know that I’ve ever heard of an arrangement where the trainer would pay the barn owner a % of his or her sales & lessons. My daughter’s trainer teaches out of two facilities; boarding one or two of her own horses at each & also brought with her to each facility approximately 5 students who board their horses Students contract directly with the BOs for board, and all horse care & facility maintenance is performed by the BO. Trainer might pay the BO a cut of the lessons taught. I know for a fact she does not pay BO a cut of any sales, though.

My trainer rents approximately 1/3-1/2 of a large facility with amenities suited to producing/ training FEI level horses (Very large arenas with top of the line footing, massive supply of jumps, dressage court, miles of meticulously maintained ride out with solid obstacles, easy accommodation for full-sized 52’ rigs, etc. ) She does 100% of the care for her boarders and has a full staff to that end. Her guy performs the routine maintenance on the arenas & pastures, using equipment belonging to the BOs. The BOs ride & use a small barn off away from the main barn/indoor complex for their horses. Trainer sometimes helps with the care of their horses and has started/put rides on a couple of their horses. We pay board directly to the trainer, who in turn pays the BOs some set amount for facilities rent. She doesn’t pay a % of lessons or sales to the BOs.

Land prices and COL are astronomical in this area. The main appeals of renting to a trainer are 1) that they’re enabling you to fill a block of stalls in one fell swoop by bringing clients, and 2) you’re able to qualify for a substantial tax break under agricultural land use rules by having equine activity on the premise. RE taxes are prohibitive without that.

[TheDBYC]

@Brave_Mucker

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.

Not in my area, no. Maaaaaaaybe for a show hunter facility catering to super-rich ammy. But otherwise, no. What you’re envisioning is rare to non-existent here. And this area is arguably the epicenter of the east coast sport horse industry.

Example: I used to board & train with a CCI**** eventer whose rented facility consisted of an old dairy barn converted for horses, a well-built but bare bones arena (no outside rails) miles of ride out maintained by 2 hunts, and seriously kick-a$$ trainer, who did it all with the aid of two teenaged working students. There was no indoor. There was no restroom – you dropped trou in your horse’s stall or ran to the barn next door if nature called. While trainer redneck MacGeyvered a system to ensure correct humidity levels, there wasn’t a climate controlled tack room. When the main water line into the barn cracked, CCI**** trainer was the one who hand dug a huge hole down past the frost line to pinpoint the leak because the well company would’ve charged $1000s to dig. He did a big sales business in upper 5-figure+ horses out of said barn. My horses were deliriously happy in his care in his Motel 6-like barn (clean & comfortable).

I’ve also tagged along with people looking at a horse represented by an internationally known rider/trainer, one of several renting barns at a drop-dead gorgeous, multi-million $ facility. There’s no farm staff to meet you & usher you to some fancy heated observation area. There’s obviously some general farm maintenance crew that mows & edges the zillion miles of fenceline. Each trainer just has their own assistants & grooms that work directly for them, though. We got buzzed in at the gate, hung a left at the polo field as directed, parked, and entered the barn, where famous rider himself greeted us. An assistant trainer tacked the horse as famous rider talked about what he’d been doing with the horse. Then we walked out to the arena & he rode it first. It’s also common for high end horses to be tried places other than home. (WEF or other show facility, hauling out to a big X country course, etc)

I do know of a recently built dressage place that has an all cream-colored interior designed tack room and the like. Boarders got huge gift baskets at Xmas; they’ll tack & untack the horse for you. Trainer is nice but somewhat under-qualified compared to others around here.

Eta: Multi-million $ facility where famous rider rents space is GORGEOUS. However, it works out only because we’re talking someone who can easily command $4k+ per month per horse for training board. The farm also gives him a break because he’s attracting business for them. I can’t imagine anyone in the 99% that is “normal” trainers being able to make those numbers work.