Owners who offer boarding, what is your expense breakdown?

[cyanskies]

We moved onto our property last year and have been offering boarding to a very small number of clients. All the full-care boarders are gone now, I just have a handful of horses on self-care now.

Due to… gestures at everything, we need to re-work our prices before bringing in any more full care boarders. With all our startup costs and incidentals, it’s been tough so far to determine what a “normal” month looks like. Things are just so variable. Some things like taxes, insurance, etc. are constant, but other things like hay, electric bill, maintenance, etc. swing pretty wildly month to month.

We live in an area with pretty bad winters, so I’m thinking of having a monthly surcharge Dec-Feb to account for the massive increase in hay we have to feed, electricity for keeping pipes and water thawed, additional bedding when horses are stalled due to ice/mud, and so on…

So, just curious to hear how others have figured it out! Every time we sit down to list all our expenses, it seems much lower on paper than it ends up being when I’m faced with our credit card balances at the end of the month. We must be forgetting or underestimating things.

[OfCourseItsAnAlter]

There is a discussion over on the Hunter/Jumper forum right now that has a lot of information on expenses and board costs. You will have to wade through some other stuff to get to that point, if you don’t want to do that, maybe start at the bottom and work your way up, as those conversations came in the later part of the discussion.

It’s the “Questioning a board price increase” thread.

[clanter]

one thing add that was not covered in the Hunter thread, put in an amount for Tools… muck baskets/forks/hay nets… stuff that is not disposables or consumables that are needed for day to day operation.

When I had my companies EVERY contract had included in its cost 5% for tools and 15% for office overhead … just a fact of life the tools worn out or were lost on the job and that office had to be supported by the work being done

[OverandOnward]

I had a BO at a full-care barn who billed a base ‘stall rate’ (not really dry-stall, because labor for feeding, stall cleaning, turnout/in, blanketing & fly spray were included), and then added what each horse ate.

She was happy to feed just what each horse needed. But whatever she bought for each horse was billed to the owner each month, tax & transport & handling included. If she bought 2 x 50-lb bags that only your horse was eating, you were billed for the 2 bags. If you left in the middle of that time period, you could take the bags because you already bought them and she didn’t need them. [She had a large and well-organized feed room.]

She added a hay/alfalfa/whatever charge as well based on what your horse ate. Every horse got as much as they needed.

You can call this a bill-through or a surcharge. But it can vary by actual cost each month, so the BO is not left with a downside for rising costs.

This BO did this for some 25 boarders. I know not every BO could or would do this, but it worked for this BO for many years. (And still does as far as I know.)

This method never left her on the hook for price increases. Price increases went straight through to the owner as soon as they were incurred. Including hay/forage.

For someone who is organized enough to do it that could be a good model. Make a profit on the basic stall rate and bill through the rest of the consumables by boarder.

[OverandOnward]

But if you are starting out at this point in time …

Check with your local horse community, but looks like there is a rapidly-growing dire need for lower-cost horsekeeping - and that means PASTURE. With lots of good horse-nutritious grass.

Not everything that is green is nutritious to horses. Over-grazing won’t work if we want them to live on grass.

But if pasture-boarding, or boarding that relies heavily on grazing, is an option, with some minor supplemental feeding and maybe facilities that aren’t extravagant, that could be getting a lot of business in the coming year or more.

[cyanskies]

We do offer pasture board - so far, it’s been our least popular option. The costs for pasture board seem considerably more variable than for stall with turnout as well - we have enough grass that if we rotate regularly, the horses need zero hay in the spring/summer, but once winter hits, they get quite a lot.

[StormyDay]

I would not do a surcharge in the winter; instead, keep the base rate the same with the idea that the summertime profit can pay for upgrades to the property. This helps to give you more wiggle room in the event of needing a major upgrade or fix (like when the arena floods and you loose half the footing, or when you realize you are loosing customers because the arena doesn’t have lights, etc) and it prevents those people who will come for a few months in the summer and leave. People will board a horse somewhere when it’s cheap, and then when it comes around to the time to pony up and pay they will make excuses (dobbin only eats 10 pounds a day, I lost my job, I can’t afford it) or they will leave and you have an empty stall coming into winter.

[cyanskies]

@StormyDay

I would not do a surcharge in the winter; instead, keep the base rate the same with the idea that the summertime profit can pay for upgrades to the property. This helps to give you more wiggle room in the event of needing a major upgrade or fix (like when the arena floods and you loose half the footing, or when you realize you are loosing customers because the arena doesn’t have lights, etc) and it prevents those people who will come for a few months in the summer and leave. People will board a horse somewhere when it’s cheap, and then when it comes around to the time to pony up and pay they will make excuses (dobbin only eats 10 pounds a day, I lost my job, I can’t afford it) or they will leave and you have an empty stall coming into winter.

I think if we kept the winter rate all year, we would be way too expensive for the area. The differential between what it costs to keep the place running in the winter vs the rest of the year is substantial.

A lot of our boarders are coming from the track over the winter, too - so we already have people moving in and out with the seasons. That’s part of why I don’t want to just amortize the cost of the extra electricity, hay etc in winter over the entire year, because our clientele comes and goes.

[StormyDay]

@cyanskies

@StormyDay

I would not do a surcharge in the winter; instead, keep the base rate the same with the idea that the summertime profit can pay for upgrades to the property. This helps to give you more wiggle room in the event of needing a major upgrade or fix (like when the arena floods and you loose half the footing, or when you realize you are loosing customers because the arena doesn’t have lights, etc) and it prevents those people who will come for a few months in the summer and leave. People will board a horse somewhere when it’s cheap, and then when it comes around to the time to pony up and pay they will make excuses (dobbin only eats 10 pounds a day, I lost my job, I can’t afford it) or they will leave and you have an empty stall coming into winter.

I think if we kept the winter rate all year, we would be way too expensive for the area. The differential between what it costs to keep the place running in the winter vs the rest of the year is substantial.

A lot of our boarders are coming from the track over the winter, too - so we already have people moving in and out with the seasons. That’s part of why I don’t want to just amortize the cost of the extra electricity, hay etc in winter over the entire year, because our clientele comes and goes.

Ah, ok; that’s a pretty different business plan than most boarding barns I’ve worked in have had.

[frugalannie]

I’m trying to figure out a way to answer this that might be useful to you and I’m not sure I can beyond simply describing what we do here.

Small operation with 9 boarders plus two of my own horses. I’ve run it as a modified co-op * for over 30 years in an area that’s pretty high price. Facilities include 3 larger pastures (couple of acres each), 3 smaller 1/4 acre, one 30x50 “med” paddock and two seasonal paddocks that have lots of grass but are too wet to use in winter and spring. We have an indoor ring. Stalls are 13x13, rubber mats over crushed stone.

We offer a basic feed: ration balancer. Any additional feed needed or wanted is the responsibility of the owner. I’ve developed a budget over the years so I know how much hay gets fed annually and x amount is in the board agreement. Additional available at replacement cost. I fill the hayloft straight from the field, buying a year’s worth at a time. Ditto with bedding. I know what electric and water usage are. So I take all those costs, divide by 12 then by the number of horses and get a number. I add a percentage for handyman, equipment, supplies, fuel for tractors etc.

Board here runs about 1/3 of most surrounding barns because we don’t have labor costs (except for handyman). There’s a waiting list of people who want to board here as a result. We don’t make much money but that’s not our intent. YMMV.

• Modified co-op means that labor is divided as follows: in a 30 day month there are 60 shifts, one am, one pm. Each one includes feeding, blanketing/unblanketing, cleaning half the stalls, setting up feed for next shift, watering etc. We all meet once a month and people sign up for shifts. (60 divided by number of boarders). I feed lunch hay most days and do all the indoor ring maintenance, field mowing and inventory control.

[clanter]

@frugalannie

Board here runs about 1/3 of most surrounding barns because we don’t have labor costs (except for handyman). There’s a waiting list of people who want to board here as a result. We don’t make much money but that’s not our intent. YMMV.

being that far below the market rate really is disservice to the equine support community and yourself

I was in manufacturing for decades, pricing a product was often based upon expectation of value, not what it cost to produce and market

We were not just throwing away money, there would be meetings to review costing with fights nearly breaking out to save a mill (1/10th of a penny)

[frugalannie]

I beg to differ, Clanter. I simply don’t know how its a disservice if I don’t charge for services not provided. Boarders are charged for what we provide. We don’t include things like property tax or insurance because we would be paying those whether or not they were here (excess liability is included in the calculation because we wouldn’t have as much as we carry otherwise).

Kind of interesting that 5 large full board operations in our area are shutting down this year and another shut down and was sold this past winter. At least one of those shutting is explicitly because they can’t find help and several places that are keeping operations going can do so only because the owners and trainers clean stalls. The problem is that they’re aging out. The model I have works for now and I think it’s equitable.

[happilyretired]

If you and your boarders can make the coop model work then good for you. For years I boarded at a barn that used the coop model for many boarders (I chose to just pay the full board amount as I was working full time and didn’t have any extra time). The dilemma is that it complicates the typical barn human dynamic and makes the “HR” side of running the operation more complicated. Some of the coop boarders would decide “their way made more sense” than how the BO wanted things done … other coop boarders didn’t get along with each other … some felt the “credit” they got for working in the barn wasn’t “fair” … inevitably some were less reliable than others, etc etc. My strategy was to pay full board – help the BO by financially supporting one or two barn projects a year – and keep my head down and avoid engaging in coop boarder drama.

[Obsidian_Fire]

@happilyretired

If you and your boarders can make the coop model work then good for you. For years I boarded at a barn that used the coop model for many boarders (I chose to just pay the full board amount as I was working full time and didn’t have any extra time). The dilemma is that it complicates the typical barn human dynamic and makes the “HR” side of running the operation more complicated. Some of the coop boarders would decide “their way made more sense” than how the BO wanted things done … other coop boarders didn’t get along with each other … some felt the “credit” they got for working in the barn wasn’t “fair” … inevitably some were less reliable than others, etc etc. My strategy was to pay full board – help the BO by financially supporting one or two barn projects a year – and keep my head down and avoid engaging in coop boarder drama.

If you go this route you choose your boarders very carefully. It does work. I have been in this situation before.

[frugalannie]

Agreed that assembling the right people is crucial. Also I’ve been told that I’m a benign dictator. I write a memo to everyone once a year or so outlining how things are done at this barn. I always note that I’m happy to hear suggestions, and I may modify procedures. But it will be my decision.

I spend at least an hour a day just on communicating with the boarders. I’ll stop in and chat while they’re tacking up or whatever, checking in on their lives in general and always ask if there are any issues I need to know about. It’s my job to resolve those issues and if necessary bring them up at the scheduling meeting.

It’s funny how those skills translate to other areas of life. A neighbor has had a sudden health issue and some of us in the 'hood are helping out. Communication, organization and consistency are making the process as smooth as it can be under the circumstances. Just like the barn.

[Obsidian_Fire]

But see, YOU are the leader and you act like it. That alone is HUGE in making situations such as yours work out.

[Alpha_Mare]

when I boarded (before I had my farm) our barn manager would have a ‘hay fee’ based on the price of hay at the auctions she was seeing in November. And we would all pitch in (20 stall barn) for the ‘premium’ of winter hay.

For a sport horse farm with an indoor arena north of the Mason-Dixon line, the Winter months are at a premium - as the OP said, many people want to move in just for the winter (e.g. Dec - March) and it’s fair to price according to VALUE, which is higher in the winter.

[OverandOnward]

One income method for board barns is hosting recognized or unrecognized shows, as well as clinics. For those with sufficient space that is laid out appropriately, there is income possibility in outside riders for use trails, arenas, jumps or cross-country schooling. Of course there is a lot of build out and upkeep, but this can be one of the least worky ways to get the property making money without the daily/weekly grind.

From those I know personally, the unrecognized shows make more money! They will do one or two recognized each year just to “prove” that the facility as up to recognized standard.

Basically, riders & instructors coming in from the outside can help the profit situation, if it is done correctly. There is definitely work involved. People management is big with this as well. But it is more easily turned on & off and requires less in terms of daily responsibility and grind.

I know of one facility with a first-tier cross-country course that was making a good part of the yearly income on two major, multi-day xc schooling times per year. For those periods the course and the footing were fully up to competition readiness, just not dressed. They also made good extra money from one-off schooling days/weekends for individual trainers who would bring their entire student & horse string. This type of activity is very good income for the trainers as well, and builds a mutually beneficial relationship with good communication about the quality of the course.

[cyanskies]

Reviving this post from the dead for a moment!

I’ve been working on re-calculating our costs, and most of the items are pretty straightforward. Utilities, property tax, hay, etc. The thing I’m most stuck on is how to factor in the cost of the large, one-time, startup costs. Equipment - truck, tractor, manure spreader, mower, etc. We spent ~$6,000 cementing the storage shed so we could actually put hay/bedding there instead of having the floor just be dirt/mud. All the electrical wiring that goes to the pastures for both water heaters in the winter and the electric fencing needs to be completely replaced - no quote yet, but I suspect that will be at least a 4-digit project, possibly 5…

How does one price these things in? It seems fair to include them since they are all expenses/improvements that make it possible to keep horses on our property. But I have no idea how to break these expenses down from a one time major expense into a monthly cost per horse.

[frugalannie]

Don’t know how helpful my answer will be. We looked at it a couple of different ways. Improvements that we would have made boarding or not,( for our own horses) we add to the basis for when we or our heirs sell the property. Things that are boarding operation specific we spread the cost over 5 years then divide by number of boarders to figure out reasonable contribution per month. If it’s a crazy amount we might do it over longer. Just a quick overview. And anything that isn’t really associated with the boarding but is used at least partially got it (tractor for example) I don’t tag to the barn. But the fuel I do.