| One of the questions I get is about how to arrive at a | | | | extended family involved in your horse enterprise. |
| dollar amount to charge that will allow the horse | | | | Why? No person wants or can work 24/7 without a |
| business to survive over a period of time. There are | | | | break now and then. You will want to attend a horse |
| three things that you must know in order to do this. | | | | function or just take a vacation away from the |
| Charging less than the competition is not one of them | | | | business and in order to do this; you must have |
| unless you truly have lower costs and overhead. | | | | someone to do the chores. |
| Overhead is a term we use to denote the amount of | | | | The problem is to find someone, who has an interest in |
| money needed each hour, day, week or month to | | | | horses, is dependable, responsible and will work on an |
| keep the front doors open. It is the electricity, water, | | | | as-needed basis. You can sometimes find a client who |
| building rent or mortgage payment, taxes, insurance, | | | | wants to do these things part-time in an exchange for |
| etc. that we use whether we have customers or not. | | | | a reduction of their bill. The down side is they may not |
| You need to know how much it costs each month for | | | | have the experience and when you have to stop their |
| you to do this. | | | | participation, you lose both your help and a client. Only |
| If you keep a set of books, you should have this | | | | you can make that decision. I have found that it is |
| information available to you. If not, you should gather up | | | | easier to hire an independent contractor whose |
| all the checks and receipts for the past year and write | | | | livelihood is taking care of animals for owners. If they |
| down how much you spend each month on each item. | | | | don't work out, I can terminate the contract and find |
| Only then will you know how much it costs to keep | | | | someone else. |
| the doors open. | | | | Costs are controllable. You need to shop around for |
| You will find that it differs month to month and season | | | | the best price on feed each year. Prices will vary from |
| to season. But if you have the amounts for each | | | | supplier to supplier. Estimate how much grain and hay |
| month, you can average them over a period of time. | | | | you will use over the next twelve months and contact |
| You will have a rough idea how much it costs each | | | | each supplier to find his price to supply you. |
| month to run your business. | | | | The same applies to bedding. No matter what you use, |
| Costs are expenses that vary month to month and | | | | if a supplier knows that you will use X amount of |
| season to season. A person running a boarding stable | | | | bedding over the next year, he will give you a better |
| or training barn will have bedding, feed, farrier, vet, | | | | price than if you buy it one load at a time. |
| outside labor that are necessary to the business. Let | | | | Profit margin is what we add on to our overhead and |
| us look at how we can control these expenses. | | | | expenses to pay our salary and have something left |
| Bedding will vary from horse to horse. Some are pigs | | | | over to cover unexpected emergencies or to grow |
| in the stall and some are not. Whatever you use for | | | | our business. This is a sticky situation for most people. |
| bedding, you want it to last as long as possible and be | | | | They want to meet or beat the competition but that |
| as dust free as possible. You must realize that some | | | | may not be the answer if they want to maintain their |
| stalls are going to be picked two or three times a day | | | | business for an extended length of time. |
| in order to get the best use of the bedding. | | | | If you want to have a 50% profit, you will add 100% to |
| Everyone says that they feed a coffee can of grain | | | | your overhead and costs. You can add more or less |
| and one to three flakes of hay, two to three times a | | | | but that is your decision. Get out your old math books |
| day. Go down to your bakers supply house and get a | | | | and look up the formulas. A 33% profit would require |
| scoop with a scale built in to it. Buy a hanging scale | | | | you to add 50% to your expenses. |
| and put it where you can weigh each flake of hay. | | | | If your business is boarding, you can add some extras |
| Buy a weight tape and tape each horse when it | | | | that the competition may not do for a nominal fee or |
| comes into the barn. Start thinking about pounds of | | | | at cost as an incentive to your potential clients to |
| feed per animal. It takes 1.5 to 2 pounds of feed per | | | | board with you. If you are a trainer, you may do the |
| 100 pounds of animal weight to maintain that horse | | | | boarding or hauling at a lower fee and raise your |
| depending on what it is doing. | | | | training fee to cover the difference. One should be |
| Horseshoeing and veterinary charges are the | | | | inventive about these things. Wal-Mart does not sell |
| responsibility of the horse owner. If you have to hold | | | | everything at a lower cost than the competition. Some |
| the horse for the shoer or vet, the owner should be | | | | of their items have a profit margin of 90 % of more. |
| charged a reasonable fee. Otherwise, they should be | | | | The same thing will work for you. You can have |
| there for the shoeing and veterinary calls. | | | | low-price leaders but the rest of your product should |
| Outside labor, whether independent contractor or | | | | be priced so you can have the profit you need to |
| employees, have to be used unless you have a large | | | | maintain your business. |