Successful boarding - how to figure what to charge?

[tle]

For those that have successfully done boarding in the past (or present), how did you determine what to charge? I know you need to look at costs for what’s included, like hay, grain, stall cleaning charges, etc. But what about all the other costs - water, electric, property taxes, insurance, or even building/improvement loans or equipment purchases? Did you include all of those as well? Are there reasons to include or not include some of these items? Holy cow, what about salary for you? Did you include that too? Looking for anecdotes on what worked and what didn’t as well as reasoning.

TIA!

[merrygoround]

Before you make any decisions at all. Look around the area where you live. Ask what others are charging, then decide how what you will be offering compares. I look at the prices some advertise and wonder what quality of feed and care they could possibly offer at the price they advertise.

Others ask prices that are patently absurd but the physical facility is beautiful. And there “the proof of the pudding is in the eating”. The management can be wonderful or awful.

Then decide if you can survive on a reasonably close price to comparable farms.

Most FO seem to work for exceedingly low wages.

And yes, you include most of those things in your costs.

[rttigrl]

Agree with above.

I just started a business consulting company for horse people and agricultural businesses, and this is a question I anticipate hearing over and over again…

Your boarding service(s) are worth what your desired client will pay for it. Not one penny more (or less!) . So, I’d recommend research–look at other nearby farms’ offerings vs cost. Then think about what you can uniquely offer (a lot of times it’s lessons or training or great experience?) as a differentiator. Price accordingly.

Then, compare the price you think your clients are willing to pay with what you’re actually willing to make off of the endeavor. The problem with the horse world is that there always seem to be people willing to work for less than break-even profit…just makes you need to get more creative with your offerings.

Good luck!
Ginny

[Char0308]

If you want to run successful boarding business you need to at least break even; regardless of what everyone around you charges. So you need to know what people near you charge but you need to know what each stalled horse costs you for real on average to compare to others fees to see if its do-able for you. Monthly payments for Mortgage or Lease of farm, Avg Electricity, Avg Insurance, Avg tractor maintenance, Avg Arena Maintenance, Avg Farm Maintenance, Labor costs, and shavings for stalls should all be added for one month that divided by number of stalls. That is you base cost, then you need to figure what Average Feed and Hay cost that you plan to feed each horse and add this onto per stall cost. This is just a start, as you will likely have some marketing, phone, and long term maintenance issues you should consider too.

[tle]

Thanks all. I thought I was doing ok – knew what folks comparable were charging (figured I’d be maybe slightly above average but mostly in line), know what my monthly expenses are per horse for grain, hay, bedding, average water use, average electric use, current property taxes and wormer and fly control as well as what I would spend on stall cleaning and feedings. It was all looking pretty ok and doable, even realizing that I didn’t have insurance, equipment or things like fuel added in. However, then I added in a rough estimate for actually building the facility (barn and arenas) as part of the boarding expenses. Suddenly my ok profit margin at 80% full completely disappeared at over 90% full (and with more horses than I think I want to take on in the first place). I’d be working and boarding horses in order to pay to work and board other people’s horses. Granted, the facility would also enable me to run my schooling shows on site (vs renting the facility on the other side of town) as well as host some clinics… both of which woudl add to the income. I suppose I shouldn’t be looking JUST at boarding to break even but add in the shows as well, right? Since that’s part of the operation.

The shows and clinics and schooling opportunities are what I REALLY want to do but have some people asking about boarding. Boarding was always a secondary aspect to it – enough to have some company and some help and help covering the costs of the facility, but not enough that it became a chore or the primary focus.

[Alpha_Mare]

building new is really expensive

In my area no one makes a profit from boarding - they all need lessons or shows to make the profit. And in the cases of well run farms with reasonable, competitive board rates they owned the farm for years or inherited it or are leasing the location - one has built an indoor but had the barn already, that is the only one I know who has built new.

If your interest is in hosting shows, maybe you could have a smaller barn?

If you have not run a boarding operation before you may find that even a small number of boarders can become a chore very quickly.

You might do a ‘stress test’ on your financial estimates - here in the NE anyone running a clinic or show had very low participation early in the season because the weather was so cold people weren’t riding. Look at your projections if income is -10% or -30% your estimate, how would that make you feel? When you are doing the physically hard work of caring for horses it can be a real downer to be worrying about the $ that aren’t there.

[tle]

That’s what I’m thinking now… either a smaller barn OR build to the original size but only put in a few stalls and use the rest for storage (tractor, gator, etc.) since a storage building may be needed down the line anyway. At least I wouldn’t have the build out of hte stalls which I’m finding is one of the more expensive parts of a barn. Thank you all for your input!

[Hilary]

Just wanted to say welcome back tle!

Glad to hear you and the farm are making a go of it.

[tle]

Aw, thanks Hilary! Been a while for sure.

[Blume_Farm]

When running a business you look at all avenues of income: boarding, lessons, shows, clinics, etc. These all are part of your accounts receivable.

You also look at all avenues of expense: materials, labor, taxes, insurance, utilities, etc. These are all part of your accounts payable.

You should make a spread sheet for both columns and see what is the final balance. The hard part is when you have a business that is also your hobby. Some folks like to remove certain aspects from the accounts payable because they would be “paying for it anyway”. In a true sense of running a business you would not do that, but I understand the rationale behind it, and why folks do it.

Remember there are tons of things you cannot account for either in accounts payable (for some reason it never works the other way around…there is never extra income, just extra expenses!!!). For example, I run my own small animal hospital and my autoclave just broke last month. Cost me $700 to fix it. I could not have known that expense, but always keep a cushion for these things. You should do that too…a fence will need repair, a water line bust, a leak, a tractor break down, a tree fall that needs to be removed, etc. I add 10% to my A/P each month to account for those items.

[BeeHoney]

If you can do a horse business without boarding, you will be better off. Boarding is only good as a loss leader to get a base of clients for other services like training, unless you do very high end specialty board. Even then, the 24/7 nature of a boarding business is very costly on a personal level to whoever runs it.

People tend to think of the business expenses of a boarding business in terms of a per horse cost of grain, hay, bedding, and the time it takes to feed/turnout and clean the stall. Unfortunately, that’s the tip of the iceberg. Owning and maintaining a facility is ridiculously expensive, way beyond hay and grain costs (although those aren’t cheap either). You’ve got to hire workers, deal with staffing, payroll and taxes and workman’s comp, buy and maintain a fleet of various pieces of equipment from tractors, manure spreaders, arena drags, to weed whackers. You’ve got to keep fields mowed seeded and fertilized, fix fences and repair a thousand other things that you never even thought about until you ran a farm. It’s a high liability business, so there’s insurance of course, several different kinds of policies to cover different types of liabilities. It’s just really tough to price board in a competitive manner and not be running a charity.

[merrygoround]

Bee Honey- I think you have nailed it.