From high-end show and training facilities to hobby farms, boarding is one way to bring in money. But, ask anyone in the business and they’ll tell you it’s difficult to make a profit.
As a University of Florida extension paper “The Economic Aspects of a Small Equine Boarding Operation in North Florida” bluntly states: “This type of operation will not sustain you by itself…”
After factoring feed, hay, bedding and myriad other costs, most boarding businesses usually either come out even or find themselves in the hole every month. Profits are rare and when they do arise, are generally paltry.
Expenses, and, by extension, the amount charged for boarding, vary widely depending on location, facilities and the type of services offered – anywhere from a couple of hundred to well over $1,500 a month.
Rates at a barn within a 40-minute drive of downtown Toronto will be higher than in a more remote area of, say, Saskatchewan, for a barn with similar amenities and services. Yet, one has to then consider how necessary a full-service stable would be in a remote location, far from the things that make a barn such as this viable – shows, proximity to equine health care and tack shops and, most importantly, clientele.
Expenses will also depend on the type of boarding. Full-care board can range from pretty basic, with feed, turnout and stall mucking, to more “deluxe” arrangements that include a host of services, right down to tacking up the client’s horse. Then there is pasture board, where horses are kept outside, generally with a run-in shed, and co-operative arrangements with varying degrees of barn-owner versus horse-owner responsibilities.
Larger facilities are often better able to absorb costs than smaller ones because of built-in efficiencies such as buying in bulk. On the other hand, smaller operations can be easier to run and require few or no hired staff.
Karen Nelson owns and operates Hillside Stables in Ardrossan, AB, which averages 10-13 regular boarders, plus up to six in-training boarders at a time.
She and her husband, Robert, built the farm with long-term costs and efficient operations in mind. Nelson’s career as a construction project manager and her experience working at a variety of stables helped them design a barn where “day-to-day operations are easy enough to allow us to manage our stable single-handedly.”
For example, they have automatic waterers in the barns and paddocks, stall mattresses to use less bedding and turnout pens close to the barn.
“I think many barns in this area were made when labour and consumables were much cheaper and taken for granted, and these barns require significant staff to manage, power to heat and cost to maintain,” said Nelson. “With the labour shortage last year, area barns started to have to increase wages to secure staff and still had problems finding people. I think securing reliable labour is one of the hardest things about running a stable, which is why we kept our facility small enough to not require outside staff.”
Taking measures to allay expenses, doesn’t mean Nelson is rich with profits from boarding. “But it does cover the regular operational costs of our facility,” she says.
Worth Going it Alone?
“I know a lot of people try to just run it themselves,” said Kim Selin, barn manager at Grandview Equestrian Farm in Cedar Valley, ON, a dressage training and boarding facility. “Therefore, they feel they’re not necessarily paying out the wages, but, at the same time, they end up overwhelmed with too much work. They get burnt out and they don’t continue the business.”
In fact, according to “Horse Boarding Stables in Alberta: An Economic Analysis,” a 2008 joint study by the province’s agriculture department and the Horse Industry Association of Alberta, “The hours of labour contributed to the business by the owner and family, in most cases, far exceeded what would be a normal work year (approx 2,000 hours).”
The study had two objectives: to provide the13 participants – ranging in size, type of facility and revenues – with a business analysis from which they could improve their own business and to gather economic information about the industry.
“Contributed labour and investment in facilities are two factors that have an important effect on the economic performance of the horse stable businesses in this study group,” it reads.
Despite Nelson’s objective to do the work without hired assistance, her business has grown enough since opening five years ago that she is contemplating taking on part-time help for lessons, barn chores “and to help me escape burnout!”
The Extras May Make the Difference
Even if stalls are filled, horses that don’t bring in income beyond the boarding fee, will limit profitability, sometimes to a crippling degree.
All boarders at Grandview have a horse in training with the farm’s head trainer, FEI dressage rider, Ashley Wright, explained Selin. “So, I don’t think they necessarily experience that like other farms do,” she said. “I have worked at other boarding stables where, it’s true, the boarders want the costs low, but then prices go up on certain things, so it’s hard to have enough of a surplus to be able to run it.”
In many cases, charging boarders for “extras” is what can put barn operators in the black: requiring boarders to partake in a prescribed number of lessons, horse show day fees, hosting shows, clinics and other events on the property and renting out the facilities to clinicians and coaches on a temporary or full-time basis, for instance.
Some barns will charge for nitty-gritty, daily details such as grooming and clipping; administering medications and other health care; removing blankets, boots, etc; and being on hand for veterinarian and farrier visits.
Too many fees beyond the monthly board, can turn boarders off, however, warns Selin. “Other stables might have a little bit higher board, which is okay, but they also feel that they’re a premiere place, so they’re going to charge you if you need boots on your horse or you want individual turnout. You’re going to pay extra for a lot of things,” she said, “but then boarders get tired of feeling like they’re being nickel-and-dimed, so they often become dissatisfied and move.”
And, sometimes barns have to shift from their initial objectives to keep up with boarders’ and other clients’ desires. “At first we mostly catered to beginner students and boarders who just wanted a place to keep their horse,” said Nelson. “Now, I get much more demand for training of horses and riders who want to be able to jump and show without owning their own horse. We made the decision last year to include lessons in our outside board rate to encourage the type or boarders that maximize our per boarder profit.”
A Case of the Empties
The University of Florida paper shows that in that particular area of the state, “Studies show that boarding facilities average an 80 per cent occupancy rate, with clients changing facilities once a year.” That can translate into a lot of empty stalls and an ever-varying clientele.
Most barn operators will face gaps in income when clients leave with their horses and they’re unable to fill the stall right away. Boarders’ transient qualities are natural for people who don’t have their own farm, said Selin. “They always think there’s something better somewhere else. Everything will be going great for a year and suddenly, for some reason, they want to move on. There’s not always good reasons for it.”
Although, said Nelson, if she started to witness a higher-than-usual turnover, she would review her rates and services.
Then, there are those unfortunate circumstances when the boarder pulls a runner, leaving the horse – and its associated expenses – in the barn owner’s lap. While boarding contracts and livery keeper’s acts can alleviate some of these headaches, they aren’t failsafe.
To protect themselves, barn owners have to diplomatically, but firmly demand clients pay on time and institute late fees.
External factors will also impact capacity. “It’s important to recognize that for many horse owners boarding a horse and buying related services is a luxury. As a result, the market for these services may experience reduced demand during periods of economic decline,” states the “Commercial Horse Boarding Stable Industry” an Alberta Agriculture and Rural Development factsheet.
Beyond Financial Costs
In addition to financial costs, lifestyle considerations can make operating a boarding barn a less-than-attractive prospect.
One of the major issues is the emotionally draining and difficult task of contending patiently and tactfully with borders’ concerns and complaints, not to mention problem individuals and/or horses.
Barn owners (and their families) also have to kiss privacy goodbye. Boarders will knock on their door at all hours, cutting into personal and family time. Back at the barn, finding time to ride, train and enjoy their own horses may prove difficult, too, as boarders monopolize their time. Plus boarders might not treat equipment or the facility with respect.
“As much as I enjoy the work it can be tiring and overwhelming,” said Nelson, who admits she can’t take vacation and sometimes has to change personal plans due to a sick horse, a boarder needing help or important repairs, for example.
So, why bother then? If profits are scant, the work never-ending and the hassles many.
For most who endeavour to do this, it’s about lifestyle – being with horses all day, the freedom of running a business, and, despite the aggravations, serving the industry they value. “I like the social aspect of boarding horses for like-minded individuals,” said Nelson. “I also enjoy teaching and it makes it easier to do if the facility is in my own backyard. Before we built Hillside Stable, I taught out of other locations, but ran into issues with how my horses were being cared for, and the amount I was being charged for low-quality care. I wanted to be able to do it my way. It’s more about personal satisfaction and enjoyment than about money.”
Boarding Business Costs:
Horse Sport Stables
It may sound obvious, but in order to be profitable, the revenue a boarding barn takes in must exceed the cost of overhead expenses.
For our purposes, we will examine estimated yearly costs associated with the invented Horse Sport Stables, a 30-acre property, located 45 minutes north of the imaginary major city centre, “Corinthia”.
Our basic facilities include:
• 20 boarder stalls
• stalls are 12’ x 12’ lined with rubber mats
• an 80’ x 120’ indoor arena with heated viewing room
• a 100’ x 200’ outdoor sand ring with full set of jumps
• boarder tack room with lockers
• pastures fenced with post and rail and electric inset
• wash stall
• access to kilometres of trails
At a rate of: $750 month per horse, the income derived from boarding 20 horses is $180,000 annually. Note that lessons would cost extra.
(Note: All figures are estimates only, based on budgets found in various industry papers, actual market pricing and the author’s own experiences. The following is intended to give readers a general snapshot of the scope of annual fixed and variable expenses that can be incurred when running a boarding stable.)
Feed & Nutrition
•Horse Sport Stables provides a basic feed of commercial concentrates with vitamin and mineral fortification twice a day. We go through 5 bags/week each at a price of $15, for a weekly cost of $225. Annually, that’s $11,000.
• We use 10 bales of hay a day for 20 horses, based on about half a bale per horse every day. At $4 a bale, we spend nearly $300 a week or $16,000 a year.
• Another expense, salt, is replaced at a rate of about three stall blocks a week. Each block is $3, totalling approximately $500 per year for salt alone!
• Horse owners buy their own supplements, dewormers and additional food.
Stalls and Stable
• Boarders’ horses are turned out daily from 7:00 a.m. to 4:00 p.m. and stalled overnight. We bed on shavings, purchased in 3.25 cu.ft. compressed bags, $5 each. We go through 40 bags a week (approximately two bags per stall), which costs $800 per month or $9,600 per year.
• Stall waste has to be deposited in special bins and removed from the property. Increasingly vigourous agricultural laws that protect against toxic run-off prevent Horse Sport Stables from storing the manure onsite or spreading it around the property. This costs $10,000 a year.
• Horses being horses, replacement of stable supplies such as buckets and feed tubs, salt-lick holders is ongoing. Also, items such as wheelbarrows, brooms and pitchforks take an incredible amount of use and abuse. By the end of the year, bills for these bits and pieces add up to $2,500 or more.
• Maintenance repairs and updates are ongoing. Horses are destructive and repairs to their stalls and the barn in general are endless. Sometimes we can do the repairs ourselves but there are times when professional help such as a plumber or electrician is required. The cost of the raw materials and the occasional tradesperson runs $2,000 annually, barring no unfortunate issues like a leaky roof or acts of God that aren’t covered by insurance.
Pasture, Fencing & Arena
• Maintaining pastures keeps the farm looking great and is essential for horse health and sound nutrition. Included in our annual expenditure of $1,000 includes: correcting compacted soil at water troughs and gates; seeding, weed control, fertilizing, mowing (either fuel and wear-and-tear on our equipment or hiring out), manure removal and/or harrowing.
• Good fencing is expensive, but imperative. We spend $1,000 replacing boards, running electric inset, adding fencing, trimming fence lines, painting and ensuring gates are in good working order.
Clients will draw on utilities in ways a barn owner might not even consider until they see their first electric or water bill: heaters, clippers, arena and barn lights (that never seem to be turned off), stall fans during summer months, bathing horses, lunchroom microwave, refrigerator and a multitude of other uses. Utility bills will increase with every new boarder.
• Electricity (we’re on a well, so this includes water too), $10,000 per year. We don’t heat our barn or indoor arena so this cost could increase dramatically in colder climates.
• Telephone, $1,000 a year for landline and cellular service.
With rates ever on the increase, liability insurance can make running a boarding business cost-prohibitive. But it is essential for a commercial entity – and that is what a barn will be considered whether boarding only one horse or 100.
Premiums depend on location and the details of the policy. Horse Sport Stables has a commercial policy through an equine insurance broker for $4,000, payable annually.
As part of our capital investment, we bought a compact tractor (with mower, harrow, snowblower, bucket and blade) a one-ton truck, lawn tractor and a used four-horse trailer, each of which is financed. (Note: The cost of depreciation also isn’t factored in.) Yearly expenses for loan payments, maintenance/upkeep are:
• Truck – $12,000
• Tractor (and implements) – $7,000
• Lawn tractor – $2,400
• Total annual fuel cost – $3,000
• Vehicle insurance – $3,000 (this includes a special policy to accomodate multiple drivers)
Sometimes this “other” category is a budget buster.
• It’s not unusual to spend $400 a year on office supplies business cards, software, hardware, paper, ink, etc.
• Signage/advertising/marketing, which includes ads in magazines, classifieds, website maintenance fees and more total $2,000 a year.
• Horse Sport Stables easily spends $400 a year on miscellaneous items – a list that’s never-ending and includes bathroom supplies, soap, paper towel, refreshments, etc. Clients are notorious wasters of barn owners’ offerings (toilet paper, for example).
• The business uses a lawyer on occasion averaging about $500 per year.
• We outsources all accounting/bookkeeping tasks which costs $1,500/year.
• We hire a full-time barn manager who works a 35-hour week at $15 per hour, more than $27,000 a year, plus workers’ compensation at another $400 a year.
• The farm has a $400,000 mortgage which costs $2,400 per month, $28,800 per year.
• Since we are a commercial enterprise our property taxes run $14,000 per year.
• Jump and riding equipment maintenance – $500