Business Question!

[ponygurl]

I am taking an Equine Business Practices class, and we have to write out a full-fledge business plan. My "imagionary" business plan is for a Miniature Horse training facility:

- possibly boarders - maybe 15?

- 20-30 training horses

- my horses: 2 breeding stallions, 7 broodmares, and then a show string of around 5.

This is just my rough draft; since I will be starting from scratch, I will probably have 20 training horses. I don't know about the boarding horses - I'm not quite sure I'd get very many mini boarders...

SOOO my question is, I need to figure out my insurance - I emailed 2 companies but I don't know if/when they will get back to me. If anyone knows, what is the average monthly insurance cost? I figured my maintence cost would be about $300 a month - that will be for machinery, gas, any broken fencing/equipment. What have you guys found to be the average? Thank you so much! I know some of this information amy be a little personal, but if you could just give me a rough estimate that would be awesome!

Plus any suggestions are gladly accepted!!

 

[ruffian]

you will need to figure out the "value" of your horses and equipment, etc., for replacement cost, and then also figure out your liability limit. Typically around a million dollars. This is just a plan, so you don't have to be exact. Call - don't e-mail - your insurance agent and ask him/her if they could ball park a value. It doesn't have to be exact. The liabiity is going to be the biggie.

Good luck with your class!

 

[Mominis]

Call Tamara at Smith-Embrey in Lexington, KY. You will want liability with care, custody, and control for the training business along with facility insurance. As Ruffian mentioned, you will need an average value of the horses in training/boarded with your operation.

 

[Genie]

There isn't a "right or wrong" answer on insurance cost.

Pick a number and no one could say it was incorrect.

Work out what your gross income would be for boarding 20 miniature horses...which will depend on whether or not your are providing training. That will be easy to determine by viewing websites of forum members who provide that type of service.

Calculate your cost per horse based on every requirement including vet, hoof timming,wormer,feed and supplements.

Your cost per horse can be reduced if the boarder is paying for all related costs and you are only providing the "roof" which lowers your income expectation but likely is a safer was to go so you don't run into unexpected expenses.

A basic income and expense statement is below.

******************************************************************************************

For example 20 horses at 100.00 per horse = $2000.00 per month

Barn Insurance = 150.00 per month

personal mortgage/rent expense = 600.00 per month

leaves you 1250.00 per month to cover your labour and food, electrical,savings, etc..................

**************************************************************************************************

Insurance costs will vary depending on the service you provide. If it's just coverage for the building then it will be significantly lower than insurance which covers the horses.

If I was doing the venture I would provide only the facility and the feed,farrier and vet costs would be at the owners' expense and as well they would have to provide their own insurance protection for the animal.

 

[Mominis]

If you are planning that many training horses, you'd better add payroll to your expenses. You will need an assistant trainer with those kind of numbers. One person can work 8 horses in an 8 hour day and not rush. Anything over an hour per horse and you'll need another set of hands to help out. Once you get that far, you are going to need a groom or two to help prepare, cool, and groom out the horses that you've worked.

 

[alphahorses]

I apologize if someone already pointed this out, but don't forget that training is seasonal for most miniatures. Many minis are with trainers from March(-ish) through Nationals, then go home for the winter. So, just for argument sake, if you charge $100 per month, you will probably not earn:

20 horses x $100/month x 12 months = $24000/yr

More likely it would be something like:

20 horses x $100/month x 7 months = $14000/yr

Which means you have to make enough during training months to cover the rest of the year.

Unless you start with a new barn and fencing (or rent), $300 per month for maintenance is low IMO, especially for the number of horses your plan supports. If you cannot do maintenance yourself, it is definitely low. (And if you start with everything new, you still need to plan long-term and put money aside for when things do start to fall apart).

A few other items to consider in your budget:

- Field/pasture/lot maintenance (including mowing, re-seeding, fertilizer, weed management, footing for lots, fencing, tree-trimming, etc). We can easily spend $1000-$2000 a year just on this.

- Manure management - For example, we cannot spread our manure where we live, and it costs me about $120 each time it is hauled away. Even if you spread it, you have to figure equipment and fuel costs.

- Mechanical equipment maintenance & purchases (everything from truck, trailer, and tractors to snow-blowers and weed-eaters)

- Accountant costs - a necessity for a business IMO, especially if you hire help.

- for your breeding stock, your business plan should define about how old they will be when you sell them. And of course you have to plan on the costs of replacement stock. Your business plan neeeds to show that mature stock will make enough money to support themselves, their up-coming replacements, AND make a profit on top of that. Otherwise, they could fall into the IRS "hobby" category.

 

[ponygurl]

Thanks everyone! I have decided to just do a training center - no boarding! I will have about 45 horses total in my imaginary business plus my breeding stock

. it will cost me $530.40 a month to take care of 1 horse, so I will adjust my training/boarding fees accordingly as well as all the other setuff! I also found my property in North Vernon, IN for only $325,000! Thanks for all the advice everyone