You have heard it. You may have even said it, but
how do you know it?
You don’t really know what your true profit or loss in
the horse boarding part of your operation is unless
you’ve taken the time to put your numbers on
paper.
Now, I know that finding the extra time to create a
worksheet on paper or on your computer is close to
impossible, but you’ll never really know until
you do it.
Even if math isn’t your strong subject, I know you
have these skills: addition, subtraction,
multiplication and division.
STEP ONE
Gather the following:
- Cost of hay per horse per day
- Cost of bedding per horse per day
- Cost of grain and supplements per horse per
day
- Cost of direct labor per horse per day (untangle
specific labor expense for boarding operations from
general labor expense by using a stop watch to time
each part of the boarding labor sequence: feed,
muck, water, turnout, etc.)
- Utility costs associated with boarding: water,
electric, natural gas, propane/>
Add up the daily costs and use your results to
calculate costs per month
per horse for direct expenses. Subtract your direct
monthly expenses per horse from your monthly board
rate. This is your Gross Boarding Profit.
Now, if you still have some money left, go to step
two. If you're negative with the bucks already,
STOP. Raise your board rates and/or
reduce
expenses and start over.
Step Two
This step takes some 'figurin' but you can do
it.
From your expense records gather the following
expenses:
- Accounting and legal
- Building maintenance
- Equipment maintenance
- Insurance
- Management
- Rent
- Real Estate Taxes
- Other applicable general operating expenses
Assign a portion of each of the above
general expenses that is attributable to the boarding
business per month.
Subtract the sum of the general expenses
apportioned to boarding business from your Gross
Boarding Profit.
Congratulations. Now you really know your profit
from the boarding business!
Keep in mind these items about board:
- All boarding clients are price
sensitive
but not all
boarders are price focused. Quality of care
and
facilities are matched to board rate.
- Boarding as a business is primary in
creating
profitable sales of lessons, training, showing and
horses, but often secondary in
profitability.
- Stalls occupied with boarded horses that
generate no other income than monthly board, limit
your total profitability - no lessons training, showing,
etc.
If all of the above steps drive you crazy, I've
developed an easy to use Excel spreadsheet
program - a Boarding Profit Calculator
- to
help you with
the process above. Additionally, I offer one on one
training
along with a group teleclass program on this
process.
Would you like to know more? Click here.
