An acquaintance that owns a boarding facility is experiencing financial difficulties. Due to the fact that I burned up some aging brain cells while trying to explain where they had made mistakes and how to possibly correct them, this article was produced. Please remember that I live in the northeast and have based much of my research on what I see for costs in this area. You need to do your own research in your area and determine if boarding is even a worthwhile business endeavor for you to start or remain in. When hired as a consultant I attempt to give businesses sound economic guidance. Unfortunately, when I am contacted, I usually find that there are major problems already existing. There isn’t any miracle formula that will turn bad management practices around. Solutions do exist if management is willing to take the steps to get control of their unique situation.
One reality that must be faced is that the boarding economics of equine ownership, as well as equine related expenditure such as supplies, equipment, veterinarian, blacksmith, and lessons and training fees, ebb and flow within the economy in which you live. What is running the economy in your area? Who are the major employers in your area and are these major employers of your clients stable and solvent? If you are giving lessons or training, it is worthwhile to note what your young clients’ parents do for a living and how your adult clients are supporting their equine sport. Will they be around for a season or for several years? You can’t gamble and make expenditures on future expectations if you don’t have some sort of picture of the future and you surely shouldn’t if you are already in debt. If you aren’t paying attention to what is going on in your area you may be caught in a downturn when it could be the most costly for your business. In simple language, if disposable income is there, horse enthusiasts will spend it on their passion. People will get into the sport, take lessons, give their children lessons, lease horses, buy horses, possibly get into showing their equine, breed and board their equine at a facility that meets their needs, if they don’t have a home facility. If disposable income should drop, something has to change and all aspects of the horse industry take a hit when people start to curb their spending habits. It will differ in some areas of the country more than others, but that is all part of economic ebb and flow.
If you are already or intend to start or take over a boarding facility, with or without training, instruction or other services being offered, you have to maintain some business structure, actually keep records to track what your expenses are as compared to what revenue (money) is coming in to the facility. Good monthly and yearly records help you look to the future and make decisions about your facility and how it will operate. What segments of your operation are making money and what areas are not? You need to know at any given time if you are operating in the black which means you are making money, in the red, that means you are losing money or if you are just breaking even. If you are already in the business and know that you are heading for trouble or already in it, what suggestions may be pertinent to apply to your boarding economics? Any business operating in the red needs to assess where the financial drain is occurring. What steps need to be taken to stop that drain? How do you determine where to cut costs or raise fees while still maintaining a competitive price for your product? Also it is important to look at how you are marketing your specific “brand.” What do you have to offer that another competitor does not? Can you easily expand into an area and charge for these services and at what price? How can you as a business owner even start to approach this economic thinking process? Are there any rules that you can apply?