Starting a Business and Building Facilities

[fizzyfuzzybuzzy]

My long term goal is to own and run my own facility – the details of that are fairly fluid as I work through a business plan. But the basics are that I am looking to have a piece of property that has 10 (I would run it essentially by myself with limited help) - 35 (I would be the barn manager and have 4-5 employees) stalls, indoor arena (I live in New England, it’s pretty much a necessity) and have a clean, safe, attractive but not over the top fancy place. Dressage and Eventing focus, with a smaller rehab portion of the barn. I have run facilities like this for 10+ years and currently manage an $8 million/year business, so the business part for me is good. What I haven’t done is start my own business or build an equestrian facility from scratch. I waffle about the building part, as I have a picture in my mind of what I think is a sensible layout and safety is a HUGE factor in that. So many facilities that are currently on the market do not meet my needs, and to retrofit a million dollar property seems like it would cost more than building from scratch. Am I wrong in that assumption? I am also not a millionaire, and funding the business is a concern. Are equine facilities still considered agricultural businesses? I plan to start the LLC soon and start my lesson, training and sales/leasing portion of the business while I am working out the finer points of my own facility.

I’d love some insight on someone who has done this successfully (or not!) and see what worked and what didn’t. Feel free to PM me to if you prefer not post.

Thank you!

[Guilherme]

The Usual First Answer: start by contacting your Extension Agent and find out what they have on the rules for an equine business in CT. New England is usually a high regulation/high cost region and that means you’ll have lots of “hoops” to jump through. They may have a skeleton business plan you can take and customize.

If you have money or your family does and will back you then life will be a lot easier than if you have to borrow. Equine operations are not favored by most commercial lenders and even Farm Credit gives them a VERY thorough look before they will lend money.

Building from scratch can be done, but purchase of an existing operation and then remodeling might be much more financially sound.

Good luck as you go forward.

G.

[foggybok]

Having spent most of the last year farm shopping, I will say that at least in this area, building from scratch is a lot more than buying an existing facility. So then you run into a bunch of facilities that aren’t quite what you want. But the price difference is staggering. One place we made an offer on would have been at least double in price to buy the land and build. The one we are currently trying to buy would cost 60% more to build new. This might be a local phenomenon, but I wouldn’t be surprised at all to see it out there too… I get that existing structures aren’t the way you want. I have looked at way too many places……. But I think it’s the way to go.

And secondly, as I you can see in my other post, banks don’t like these properties. You get charged higher rates and there are a lot of hoops to jump through. If you are going to try to make a living off the property, be prepared to show them it really will pay for itself. They don’t even like it when you have alternate income.

Best of luck!

[OneTwoMany]

Agree with earlier posters. We purchased raw land and built a farm to our specifications. However, the resale value of our farm is only a fraction of what it cost us to build.

If you can, buy versus build. You’re unlikely to get your money back if you build it yourself.

[FreshAir]

Buy don’t build. You get a more firm idea of what you are getting into and can do your renovations piecemeal. Site work is the silent killer of all projects.

[Alpha_Mare]

If you are thinking of buying in your area, whether to retrofit or building new, you should do some serious research on zoning and approvals processes for different towns that have properties you might like. These can make a large difference in cost for you to do a change. Typically a brand new large building is going to have more hoops to jump through than the renovation of a large building that’s already there (indoor arena, barn). Your neighbors will be able to comment at town hearings and depending on how much they like/don’t like the usage you intend may again affect what you can do and the price.

For those reasons I agree with others to buy rather than build.

[clanter]

Typically a brand new large building is going to have more hoops to jump through than the renovation of a large building that’s already there (indoor arena, barn). Your neighbors will be able to comment at town hearings and depending on how much they like/don’t like the usage you intend may again affect what you can do and the price.

when renovating you have to remain within the preset structure’s footprint other wise a new permit for new construction is required

and about zoning… it can be used to an advantage… I know of one property that wanted to put in a softball field, the neighbors protested the field’s construction… until… I told the party who want to build the field that the property was zone ag which meant it could used as a farm/ranch… so just tell them you are going to raise hogs on the property which was allowed by the zoning rather than build the softball diamond… softball diamond was approved with the blessings of the neighbors

[BeeHoney]

Definitely buy, don’t build. Building is tremendously more expensive, as others have pointed out. Renting is a great, very reasonable option for starting out this venture.

But, use your business savvy now to run the numbers. I think you will find that it will be difficult to make this a profitable business given the enormous capital expenditures required and the high cost of labor and of maintaining such a property. There are articles and spreadsheets on the internet that can help you run the numbers. Obviously, if you are a professional high end trainer who is able to supplement your income stream with lessons, training horses and sales commissions the numbers will look much better. Don’t forget to consider hidden costs, like losing $$$ worth in hay when the roof of your hay shed is damaged in a storm, losses due to theft, losses due to deadbeat/no-pay clients, or losses in attorneys’ fees, losses due to damages to equipment when your employee misuses the tractor, etc. Be sure to calculate in your own salary and benefits–I think it is reasonable to expect that your job managing the farm should provide you with a base salary and some basic benefits.

Even if you CAN run such a business and think you could make it break even or be profitable, I think you should compare it to other investments that you could make with the same $$. Farms and equine facilities tend to make very poor real estate investments and can be very difficult to resell. I also think you also should consider your pay/benefits with your current job vs. what you will be paid as a barn manager. This way, whatever you do you will do with your eyes wide open. Being clear headed about the tremendous costs involved with running a facility is really important.

[Greyscale]

You have a really nice idea and it’s very cool that you already have a business experience in general, with such knowledge it’ll be easier for you to make your company successful But considering that you’re starting from scratch now and certain specific features fo this type of business it can be a long road to success.
In general your main steps can be:

• starting from freelance teaching (try to start by offering to visit people that have their own horses, you can test the waters in general and find your first clients, and also make helpful partnership for future)
• being ready for great and hard work (which will include not only the service you want to suggest for your clients but also taking a good care about your horses, it’ll always be one of the main things for your business)
• having enough school horses
• teaching and training with your horses
• creating a reliable and good work team (you can start from working students for example in the beginning)
• making a good and professional advertising for your business with using various innovations tools https://idapgroup.com/for-startup/
• providing an effective management system for better control and work of all parts of your company
• having a start capital (not millions but at least smth for the start)

[clanter]

• making a good and professional advertising for your business with using various innovations tools

my youngest daughter out of frustration of being “too young” to find a job started her own riding riding school. (She was a Gold Metal equation rider and a national champion distance rider)

The one thing that helped her gain students was she had tee-shirts made with her schools name across the back which she required the students to wear during the lessons. These students would often wear those shirts around town which accomplished a couple of things… it spread the name of her “school” (the local paper did a write up on her school after a reporter saw one of students at the mall) and it empowered the students with a level of individuality that they were different (in a good way LOL)

She started at zero by end of summer she was fully booked as well as all the following summers until she stopped the program.

Each year she changed the shirt’s color which gave some level of pride to the old-timers that they were there at such and such time