There are the variable and unpredictable expenses that need to be considered such as, insurance, facility repairs, equipment maintenance, marketing and advertising, social media management, etc. The management and control of variable and unpredictable expenses is difficult to impossible, so they need to be covered with a sufficient profit margin.
Considering the business risk, hard work and unpredictably of a boarding business a profit margin of 50% is not unreasonable. Unpredictable expenses can lower your profit margin significantly in any month, or for several months, or even make you lose money. Horses are beavers, and their kick is a cannon.
In this example the monthly stall board with full service has a monthly cost of $286.83 per horse, (($9.43 x 365) / 12). Therefore, it is not unreasonable to charge $575 per month. $575 per month is a 50.1% profit margin, (($575 – $286.83) / $575)). Your horse boarding business may have additional expenses that are not mentioned in this blog, or expenses that is unique to your business. It is also reasonable to bill periodic services such as deworming and other services as a separate line item in addition to board. If you would like help with your boarding business pricing, my contact information is below. There is no charge, take advantage of it.
Remember, boarding horses as a business, is a business, not a friendship. If it happens to also be a friendship, that is a bonus, but it shouldn’t lower the board charge. It is also good business practice to bill your board one month in advance. You are incurring the majority of your cost to board a horse in advance.
Next time we will discuss how to compete in an equally priced boarding market. Remember, equineGenie tracks, manages, analyzes, teaches and raises your horse business I.Q.
Here’s to a successful boarding business!
Bob Valentine, Ph.D.
President - GenieCo, Inc
Ft. Collins, CO 80527
www.equinegenie.com
Dr. Valentine taught Equine Business to graduating seniors in the Equine Science Department at Colorado State University. He has been involved in the horse business for many years. If you have any questions, you can reach Bob at bob@genieatwork.com, or call him at 970.682.2645 (office) or 970.231.1455 (mobile).