Is the breeding business a labor of love? Who is able to make money doing breeding? The stallion owners? The mare owners? Selling young stock? I’ve asked several people (horse professionals who have dabbled in breeding but have not tried to make a living at it), and the resounding answer has been nobody. Any thoughts?
Make money! Hah! I’d be thrilled if I didn’t lose my shirt on every breeding. It’s something you do because you love it, not for money.
I know of many successful breeders that make a living of it. They do however, tend to also do more then just breed, but breeding is their foundation. I think you start slowly, and if you find that you are moving stock for top dollar, then you expand. You don’t just one day decide to be a breeder. Furthermore, you start off with a lot of investment in the begining, such as getting the best mares you can. If you think you can be successful breeding with anything but the best mares, you are in for a big suprise. So it might take decades to turn it into a profitable excercise, but yes I think ou can eventually. I am banking on it, so I hope it will be true.
Tim
I know several folks who make $$ from breeding. But they are “professional” breeders and have invested in really nice mares and a stallion etc. They also improved their programs over time and each year have foals that sell at top $$ - They also breed their own broodmares etc. .
The folks I know who make a profit do what is needed and no more. They don’t cut costs but they don’t over spend either. it is a biz after all…
I think it could be possible if all went well assuming you had your own farm. If you had to board there is no way.
If you have your own place and work hard at it and have prepared yourself by learning avidly then make no excuses and do your job in selecting the proper breed and horses for you, keeping a timely web site, taking great pictures and video, and having a positive internet and business presence. You can have a good business with luck. Most people screw up in many facets of their horse business…you can’t. If you have a breeding business with 2 mares or 20 mares you need to be disciplined and smart and it helps a lot if people know your are a good person who is honest and straight forward. PatO
I don’t think anyone is in this for the money, unless they need tax writoffs, or have clients who do.:lol:
Can you make money? Yes, but only under the right circumstances.
You have to take into consideration the costs in your area and how many mares you are going to be breeding. Doing it in volume can make a big difference. Living in an expensive area (as I do) is kind of a death sentence, since I can’t charge more for a foal just because it cost me more to make it.
You also have to have luck on your side. You could lose a foal (or even a mare) at any time, or have astronimical vet bills, or your mares could suddenly refuse to become pregnant (I’ve been there too many times- ugh!)
As others mentioned, you need really great mares. If you don’t already have them, it could be a major investment. You might consider leasing a couple great ones for a season and see how it all works out. You probably can’t realize all that goes into it until you’ve done it.
Even if you make a “profit” you don’t want to think about the fact that you spent 5000 hours to make that $1000…
You can’t believe how much time I spend on my business, and I have yet to even come close to breaking even. There are the phone calls and emails, updating ads and FB and my website, taking endless new videos and pictures. That is on top of riding, working with the young ones, vet appointments, stallion research, stall cleaning, farm maintenance, tack cleaning, trailering here and there, etc, etc. It takes an incredible amount of effort, sometimes leads to massive heartaches, and can be downright exhausting. It IS a labor of love!
[QUOTE=Laurierace;6377722]
I think it could be possible if all went well assuming you had your own farm. If you had to board there is no way.[/QUOTE]
That’s really the key…and there’s no way to predict it.
The highlighted point only becomes important if you don’t have to board. If you do board, don’t bother unless it is a labor of love.
i think the biggest issue is that most horse people (including breeders) don’t look at what they do as a business.
Unless you are a service business (like i am) all businesses must make initial capital investment and capital expenditures as the business grows and progress - that is the nature of "capital"ism !
you might, as a breeder spend, say 10,000 on a mare - you dont write that off in one year - you depreciate her over time…
and if a mare say cost 10k and her useful life is 20 years - and she has say 15 foals that sell for between 10 - 15k, then it isnt difficult to see that at some point she will be carrying her weight.
also all successful breeders have a line that they wont cross expense wise. so there are no black holes. if a horse is injured, and it will take an amount over that line - they will not make those expenditures.
really horse business is not much different than any other capital heavy endevor 
also all successful breeders have a line that they wont cross expense wise. so there are no black holes. if a horse is injured, and it will take an amount over that line - they will not make those expenditures
This is probably why I will never make money breeding. I just feel it is my responsibility to do everything in my power to do right by the horse. I have horses that have been injured and have to be retired and I pay board on them… ect ect. I think if you could just “write off” horses that don’t work out you really may be able to make decent money at it. For me it is the vet bills that really eat up the profit, and it doesn’t matter how safe your place is they will always find some way to hurt themselves in some freak manner.
Yes - at the end of the day we make money on our breeding operation
Its a combination of stud fee revenues from both stallions, selling in utero foals, selling foals once they hit the ground, selling mares in foal, and knowing when to cull and cut our losses and when to move forward
I pick up some nice, cute mares off the track, get them in foal and offer them up for sale and so far every single one of them has sold at a price point where I can make a few dollars on each of them and it makes it worthwhile to have them in the operation as a revenue stream. It also gets more foals on the ground by my stallions out of mares that I liked and personally chose for them, without me having to foot the bill to maintain them until they have foaled and beyond
Several of my sales are overseas, and the bulk are in North America. Some are show homes, some are breeding homes, some are pleasure homes. I truly dont care if someone is willing to pay the price on one of my youngsters and all they want to do is stuff it with carrots every day, braid ribbons in its hair and take nice pictures of it. If it has gone to a nice home, and is well loved and taken care of, it doesnt have to go into the show rings in order for my program to be successful and turn a profit
So much of breeding is esthetics and hopes and dreams (from a buying perspective) and hence my decision to purchase and stand the stallions that I currently have on the roster
Guaranteed Gold is cremello so he will 100% produce palomino, buckskin and smoky black and to this day, I still have Mare Owners coming to me saying “I have always wanted a palomino since I was a little girl and am finally in the position to make that dream a reality”
Panoramic is jet black with lots of white markings and he produces those traits consistently. I have a whole 'nuther group of Mare Owners that will contact me saying “I have ALWAYS wanted a black foal with lots of chrome and I love your stallion and what he is producing”
My new colt that I may keep and promote as a future stallion prospect should produce a ton of chrome
Yes - some might consider those criteria “shallow” but really and truly I dont care - it attracts a huge following of clients who simply want something pretty and blingy greeting them each time they go down and see it. And yes - all of the stallions have/will have a performance career and move and jump well and produce youngsters that are user friendly to handle, but they also very much cater to the market where estethics and eye appeal matter. Very very much …
When I was standing Winner (HZ grey) I got SO many enquiries from people that wanted something with his performance and production credentials but also wanted the 100% guarantee of getting a grey foal. Everyone has their specific reasons for wanting to spend their money in a certain way … 
I think before you hang out your shingle stating “ABC Breeding” you really need to thoroughly understand the market you are targetting and run your operation like a business. Pure and simple - like a REAL business and take the “horse” part out of ther equation. And that means not allowing emotional decisions to override what is good for the entire business as a whole because once you do that, that one decision affecting that one single horse could adversely affect everything you have worked for and worked towards for the last XX years
I think true colors has got it right. Know your market and who you are selling to. Then go home and breed the best that that market desires, and ask as much money for them as the market will bare. The breeders I referred to earlier were also known as producing the best for my market, it says it all.
Tim
This isn’t exactly the whole picture though…the initial investment cost $10K, but then there is the maintenance of the mare (feed ,farrier, vet, show fees, etc.) as well as the cost of producing each of those 15 foals.
For example I bought a new piece of laboratory equipment for my hospital. It cost $10K, but I also have a monthly maintenance fee for it if $50. Then every time I run blood work I have to use these “cards” that cost about $18 each set. So when I calculate how much it costs to run blood work I have to include: the cost of the machine, maintenance fees, cost of those cards, cost of the tech to run it and my cost to interpret the results.
So if you are really running a business you NEED to factor in all those ancillary and hidden costs!
I think true colors has got it right. Know your market and who you are selling to. Then go home and breed the best that that market desires, and ask as much money for them as the market will bare. The breeders I referred to earlier were also known as producing the best for my market, it says it all.
Bingo Tim. 100% correct
There are some fabulous breeders out there that breed for the upper level dressage and jumper markets. Never in a millions years of Sundays would I go head to head with any of them (you included! :lol: ). You (and the others) have the mare base, the knowledge and the depth and experience to consistently produce athletes that excel at those levels and you attract the buyers that WANT to buy what you are producing
And you said it in a nutshell. Know your market, know what you are breeding for, know what the buyers in those markets are looking for and willing to pay, buy the horses that will allow you to produce and cater to that market, and then put pen to paper and see if your cost of producing that product and your ROI allows you to make a consistent profit at the end of the day
If it doesnt - if you are always subsidizing your “business” and never turning a profit or barely making ends meet, then you (or someone you trust for their business acumen) needs to take a hard look at your operation and see if it can be saved and turned around by doing X, Y and Z and if it cant, you need to look at a major restructuring or getting out and getting into a new line of work
SO many breeders have the basic concepts right and some quite frankly dont at all, but where they are doomed to fail is that the business end of it is lacking - the sales and marketing part and the ability to step back and disassociate themselves from the emotional warm and fuzzy “horse part” of the equation and regard it simply as a business that needs to be profitable and self sustaining if it is to have any hopes at all of succeeding both short and long term
[QUOTE=bluehof;6378723]
This isn’t exactly the whole picture though…the initial investment cost $10K, but then there is the maintenance of the mare (feed ,farrier, vet, show fees, etc.) as well as the cost of producing each of those 15 foals.
For example I bought a new piece of laboratory equipment for my hospital. It cost $10K, but I also have a monthly maintenance fee for it if $50. Then every time I run blood work I have to use these “cards” that cost about $18 each set. So when I calculate how much it costs to run blood work I have to include: the cost of the machine, maintenance fees, cost of those cards, cost of the tech to run it and my cost to interpret the results.
So if you are really running a business you NEED to factor in all those ancillary and hidden costs![/QUOTE]
yes, of course! And creating budgets that include any and all costs is critical…
But I don’t think most folks have a problem with those kinds of costs - I think most folks don’t understand the nature of capital and how it affects future profits - aka you must create capital if you want to make money - that is just the nature of the business!
You don’t write off the 10k for the mare the first year - you depreciate her over time so that say - only 1k of her cost is expensed each year - along with her other costs. This makes the bottom line much more profit friendly - and is how ALL capital intensive businesses do it.
To make money you MUST be willing to make heavy capital expenditures. And the more you want to make - usually the more capital you need to spend.
The correct way to depreciate mares is not over time, but over average number of foals produced. The average number is 7 (stats from the TB industry). So if a mare costs you 10,000, each foal she produces, before anything else, has cost you $1400. And you have to stay in the business for more than 7 years to beat that number from the get go.
Actually running the numbers is a very sobering exercise.
[QUOTE=Molly Malone;6378982]
The correct way to depreciate mares is not over time, but over average number of foals produced. The average number is 7 (stats from the TB industry). So if a mare costs you 10,000, each foal she produces, before anything else, has cost you $1400. And you have to stay in the business for more than 7 years to beat that number from the get go.
Actually running the numbers is a very sobering exercise.[/QUOTE]
ok, but still - you are going to depreciate the mare over time - in this case 1/7th of her cost - each year.
I am not an equine accountant - but i am an accountant for small businesses, so am using my "small business " experience to (hopefully) add to the discussion
i work with many small businesses and where they fail is usually
a) not planning for future revenue streams
b) over spending on the wrong things
c) not budgeting
d) not being sensitive to their market.
e) once they do start making $$ they tend to expand into non revenue generating areas which pulls all profit from the initial biz so both end up failing.
the business that do thrive and grown tend to:
a) have budgets and stick to them
b) pay attention to their market
c) always working towards future revenue streams
d) use capital wisely.
e) cut their losses.
I think an additional hidden cost of mares can be the cost to maintain them after they are no longer productive. (The other down side to purchasing that wonderful older mare–fewer productive years/foals in ratio to a possible long unproductive years!)
(I think I am leasing my next mare because I will be feeding too many old ones!)
