Why stall boarding rates need to at least double across the Midwest

[Kodidog763]

It’s hard for me to understand when people are complaining, after they have already been running their business, that they can’t make it. Do people not have a valid business plan before they jump into business?

I would love to run my own barn. I’ve wanted to do it for years, but it’s only realistic IF the barn will turn a profit. My DH and I started looking several years ago (before the economy tanked) at various barns. I met with barn owners and got realistic ideas of costs/expenses. I wrote a business plan. I built a relationship with my lender. I kept a spreadsheet of boarding prices for every barn within a certain radius of my desired location so I knew what the market would bear. I created a spreadsheet would calculate the viability, based on my business plan and the fair market pricing of board, of any property I was interested in. 95% of properties that were available would not turn a profit. We almost pulled the trigger on one property that would have shown a profit, but ultimately the sale fell through for a variety of reasons. The economy tanked after that and I postponed any thoughts of operating a barn.

It would have been completely irresponsible for me to just pick a property that I loved and then take in boarders hoping they would pay the bills. Then proceed to be pissed off because horse owners are not supporting MY faulty business plan (or lack of one).

Did the OP make an informed decision when starting this business? Did you have a business plan that showed you would make a profit? Or did you simply jump in without doing your due diligence?

My DH owns his own construction business. He prefers new construction rather than doing remodeling. With many of the new code changes/requirements, it’s gotten more expensive to build. For a small builder like my husband that translates to a higher cost to the customer. The market won’t bear that extra cost because the customer can get the “same” (I would argue the quality isn’t the same, but that’s another issue) house cheaper from a big builder. So does he complain that the industry isn’t fair, and that customers NEED to pay more? No, he realizes that new construction isn’t a viable business for his situation anymore. He now focuses on remodeling (and fixing the cheap, crappy construction you get from one of those big builders).

Sorry. I realize my opinion probably won’t be popular, but I think it’s ridiculous to blame your customers for your bad business plan.

[bauhaus]

[QUOTE=Kodidog763;8284649]
It’s hard for me to understand when people are complaining, after they have already been running their business, that they can’t make it. Do people not have a valid business plan before they jump into business?

I would love to run my own barn. I’ve wanted to do it for years, but it’s only realistic IF the barn will turn a profit. My DH and I started looking several years ago (before the economy tanked) at various barns. I met with barn owners and got realistic ideas of costs/expenses. I wrote a business plan. I built a relationship with my lender. I kept a spreadsheet of boarding prices for every barn within a certain radius of my desired location so I knew what the market would bear. I created a spreadsheet would calculate the viability, based on my business plan and the fair market pricing of board, of any property I was interested in. 95% of properties that were available would not turn a profit. We almost pulled the trigger on one property that would have shown a profit, but ultimately the sale fell through for a variety of reasons. The economy tanked after that and I postponed any thoughts of operating a barn.

It would have been completely irresponsible for me to just pick a property that I loved and then take in boarders hoping they would pay the bills. Then proceed to be pissed off because horse owners are not supporting MY faulty business plan (or lack of one).

Did the OP make an informed decision when starting this business? Did you have a business plan that showed you would make a profit? Or did you simply jump in without doing your due diligence?

My DH owns his own construction business. He prefers new construction rather than doing remodeling. With many of the new code changes/requirements, it’s gotten more expensive to build. For a small builder like my husband that translates to a higher cost to the customer. The market won’t bear that extra cost because the customer can get the “same” (I would argue the quality isn’t the same, but that’s another issue) house cheaper from a big builder. So does he complain that the industry isn’t fair, and that customers NEED to pay more? No, he realizes that new construction isn’t a viable business for his situation anymore. He now focuses on remodeling (and fixing the cheap, crappy construction you get from one of those big builders).

Sorry. I realize my opinion probably won’t be popular, but I think it’s ridiculous to blame your customers for your bad business plan.[/QUOTE]

This is exactly what I was trying to say, more clearly stated than I did.

Owning and operating a farm is difficult and expensive, and it’s not something even the most astute business owner can do without a big personal nest egg or venture capital investment to start with, or an outside source of income. If you’re paying a market rate mortgage with 25% down in an area where you’ll have a realistic supply of customers, you’re not operating in the black AND supporting yourself on that alone unless you have something really special to offer that you can charge a big premium price for AND that is rare and desirable enough to keep your barn full. If you just board horses, offering good care and safe, comfortable facilities just isn’t enough unless every other barn you’re competing with is run down and shady or far away, and your customers will pay you a premium price for the peace of mind or convenience.

[HorseCzar]

[QUOTE=Kodidog763;8284649]
It’s hard for me to understand when people are complaining, after they have already been running their business, that they can’t make it. Do people not have a valid business plan before they jump into business?

I would love to run my own barn. I’ve wanted to do it for years, but it’s only realistic IF the barn will turn a profit. My DH and I started looking several years ago (before the economy tanked) at various barns. I met with barn owners and got realistic ideas of costs/expenses. I wrote a business plan. I built a relationship with my lender. I kept a spreadsheet of boarding prices for every barn within a certain radius of my desired location so I knew what the market would bear. I created a spreadsheet would calculate the viability, based on my business plan and the fair market pricing of board, of any property I was interested in. 95% of properties that were available would not turn a profit. We almost pulled the trigger on one property that would have shown a profit, but ultimately the sale fell through for a variety of reasons. The economy tanked after that and I postponed any thoughts of operating a barn.

It would have been completely irresponsible for me to just pick a property that I loved and then take in boarders hoping they would pay the bills. Then proceed to be pissed off because horse owners are not supporting MY faulty business plan (or lack of one).

Did the OP make an informed decision when starting this business? Did you have a business plan that showed you would make a profit? Or did you simply jump in without doing your due diligence?

My DH owns his own construction business. He prefers new construction rather than doing remodeling. With many of the new code changes/requirements, it’s gotten more expensive to build. For a small builder like my husband that translates to a higher cost to the customer. The market won’t bear that extra cost because the customer can get the “same” (I would argue the quality isn’t the same, but that’s another issue) house cheaper from a big builder. So does he complain that the industry isn’t fair, and that customers NEED to pay more? No, he realizes that new construction isn’t a viable business for his situation anymore. He now focuses on remodeling (and fixing the cheap, crappy construction you get from one of those big builders).

Sorry. I realize my opinion probably won’t be popular, but I think it’s ridiculous to blame your customers for your bad business plan.[/QUOTE]

This is hilarious. I remember when I had the same thoughts as you before I had a barn.

[airhorse]

The problem is, there is always somebody willing to do it for less. A purpose built facility constructed to code, with all the amenities, paying a mortgage, taxes, and commercial insurance will never be able to compete against a family barn with no mortgage and homeowners insurance.

I will say it again, less than $7 per day is not nearly enough for the responsibility of caring for a horse.

[bauhaus]

OP, there’s nothing stopping you from raising your board to whatever level you think is appropriate. I’m not too sure what kind of response you were expecting here.

[ladyj79]

I just don’t get it, though. OP is already making a 25% profit. She clears 3500 after expenses monthly. These are her own figures. She feels she works too much. She wants to work less and make more money. And she wants to do this by price fixing.

Even if her numbers of 80hrs a week are accurate, that’s over 10$ an hour for cleaning stalls and feeding horses. I don’t know where in the midwest she is, but I can guarantee that’s over minimum wage. Also 80hrs a week is a crock unless you are actually the slowest stall cleaner in the world or have no system to accomplish any task whatsoever.

I hate to be mean or rude or whatever, but you are making a healthy profit on your business and really just come across as irrational.

[airhorse]

[QUOTE=ladyj79;8286066]
I just don’t get it, though. OP is already making a 25% profit. She clears 3500 after expenses monthly. [/QUOTE]

Before mortgage, taxes, insurance, and utilities.

[SMF11]

[QUOTE=airhorse;8286077]
Before mortgage, taxes, insurance, and utilities.[/QUOTE]

And her labor?

These are the largest expenses my farm has. So no, she’s not making 25% profit!

[bauhaus]

And if she increased her board $500/month above its current price of $500, she’d be looking at an $8000/month increase in income. Either her mortgage, taxes, and insurance are very high and she’s underwater or she’s about breaking even now but wishes that a typical boarding barn owner/manager salary was nearly $100k a year.

[ladyj79]

Not if her numbers are accurate. If you are “breaking even” on stalls, and 150% profit on field boarders, you are “factoring in” those “business expenses”, otherwise those numbers given by OP are meaningless.

If those numbers are meaningless then my point about getting rid of all stall boarders holds true. If you are literally spending 500 per horse on feed and bedding, then a) wow! You are doing it wrong, and b) why on earth would you be doing that??? Just have field boarders.

Who does “business expenses” without factoring in business expenses such as taxes/mortgage/insurance/etc??? If you tell me “break even” and “150% profit,” I’m presuming you are including operating costs and not just how much it costs you to feed a horse. Back to ignorance.

[HorseCzar]

I make 0% profit on stalls. I make 150% on outdoor (which is an overestimate for sure)

Why can a stall boarder get by without paying a profit?

[js]

[QUOTE=HorseCzar;8286181]
I make 0% profit on stalls. I make 150% on outdoor (which is an overestimate for sure)

Why can a stall boarder get by without paying a profit?[/QUOTE]

Because you determined the price for renting stalls, the boarders didn’t. If they demand more then charge more. If there demands exceed your capabilities then stop with the stall boarding portion and only do pasture board. Seems simple enough.

[bauhaus]

Right now, every boarder at a barn in the midwest with 16 stalls paying $500 a month who is reading this is wondering if OP is their barn owner complaining about not making a profit off their stall.

[ladyj79]

Your stall boarders are paying your mortgage. And insurance. And putting a roof over your head as you live in the barn. If you don’t need that 8k a month to operate, get rid of them.

Again, your business entire is making a 25% profit. That is HUGE. But if it’s not sufficient, raise your board rate 20% for EVERYONE, including field boarders. This would give you an additional 2750 a month, thus raising your “hourly wage” to almost 20 bucks (6200 profit). For picking stalls and feeding horses. Congrats, you’re living the dream. I mean that.

[kdow]

[QUOTE=bauhaus;8286224]
Right now, every boarder at a barn in the midwest with 16 stalls paying $500 a month who is reading this is wondering if OP is their barn owner complaining about not making a profit off their stall.[/QUOTE]

Seriously, I’m glad I don’t have a horse, I wouldn’t want to board with a BO so resentful that they aren’t making enough money.

[BeeHoney]

It’s a really tough business for sure. Overall my business is “successful” but over the years I have gotten better at analyzing the numbers and regular stall boarders who don’t use training or layup services are at best a break even endeavor for me. Thankfully I usually have plenty of breeding, training, and layup clients.

Interestingly, the regular stall boarders are the ones who make my job as a barn manager the most work. They are the ones who call and text me after hours and on the weekends, who leave a mess in the barn, want to be out at the barn at odd hours, schedule the farrier or the vet at the last second and then need help, etc. Yes, I have rules, but having to constantly remind a group of adults to follow the rules is an unpleasant task in and of itself. Yes, the other horses sometimes need things after hours, but somehow it seems to be much more rarely, with the exception of a layup that requires around the clock care. However, in that instance I am able to charge for my (or my staff’s) after hours time.

I don’t in the least blame my clients. Overall they are a wonderful group of people. But, recently I have come to feel like it isn’t fair that my training & layup clients are footing proportionately more of the bill. I will be increasing my rates over this next year and I do expect some attrition as a result. This is a logical business move and there is no resentment. I don’t want that attrition to happen, but my overall costs have increased quite a bit over the past few years and I have also gotten older and have less desire to pour my energies into an endeavor that isn’t profitable. My area has plenty of lower cost boarding options, most with less service and less quality and I feel badly if my clients feel “forced” to choose lesser options for their horses.

I think that a lot of people undervalue their own time and expertise when running a boarding stable. It was an eye opener for me the first time I went on a real vacation for a couple weeks to see what it cost to replace myself. That is the actual, real life value of my role. And that wasn’t even counting the completion of many office tasks like payroll, billing and filing tax forms.

[Vindicated]

[QUOTE=HorseCzar;8285438]
This is hilarious. I remember when I had the same thoughts as you before I had a barn.[/QUOTE]

What part of this is hilarious?

[kalidascope]

[QUOTE=BeeHoney;8286400]
I think that a lot of people undervalue their own time and expertise when running a boarding stable. It was an eye opener for me the first time I went on a real vacation for a couple weeks to see what it cost to replace myself. That is the actual, real life value of my role. And that wasn’t even counting the completion of many office tasks like payroll, billing and filing tax forms.[/QUOTE]
Yet it is being described as ‘unskilled’ and ‘minimum-wage labour’ on this very thread.

That other thread recently, where the OP asked what people wanted in a barn - the #1 thing almost everyone said was “skilled/competent staff”.

There seems to be a bit of a disconnect, no?

Sure, forking horse poo out of shaving isn’t hard in itself, but the skill is noticing when the number or consistency of the piles is off. Another currently active thread describes a bolshy horse and the trouble the lesser-skilled (teenage) workers have bringing him in - trouble that experienced staff don’t have.

Is barn management really unskilled work worth only the minimum wage? I’m not saying it should be worth $100k per year - but there’s a ten-fold scope between those two extremes.

[PaperPony]

[QUOTE=kdow;8286379]
Seriously, I’m glad I don’t have a horse, I wouldn’t want to board with a BO so resentful that they aren’t making enough money.[/QUOTE]

I know this will be unpopular, but it seems to me that many boarders are of the opinion that it would be WRONG for a person to make money off boarding, and the places that they board should be run just because the person enjoys doing the work so much that they are willing to do it for free and often at a great personal or financial sacrifice to the rest of their lives.

[airhorse]

What is access to a 500K or more building worth? Any decent facility around here is going to be way over 1M if not closer to 2M with land. That’s a big number to come up with every month whether stalls are full or not.