For professional horsemen qualified to instruct riding,
lessons are the quickest route to earning money in
the horse business. Think about the business
transaction for a moment. The student takes a
lesson lasting from 30 minutes to one hour, private or
group and pays you immediately or in advance for
your time and use of your lesson horse.
The ideal world for instructors would have all
students provide their own horses. And some
instructors enjoy that situation, but, most often in
the beginner to intermediate student rider universe,
the lesson mount is from your stable of
lesson horses. Good lesson horses usually
have simple names like Skip, Charlie and Whitey.
They are outstanding examples of patience,
have
calm attitudes and are loved by all of the students
who ride them. The truth is your best lesson horses
get more Christmas cards than you can count.
Undoubtedly, you have some horses in your lesson
program that aren’t as popular as others, but have
good merits. Often, these other horses aren’t as
adaptable to just any student rider and have a more
limited group they can serve.
Since limited use means less lesson revenue, this
subject often brings up the common question, “
How much does a lesson horse cost per
year?”
The short answer: More than you might
think.
The long answer. Takes many more words,
formulas and calculations (yawn) than you want to
read right now.
As an alternative, give some thought to the process
of calculating the cost of maintaining your lesson
horses.
Initial Cost
As an example, Ben a great horse, needs a rider
with intermediate skills. Ben cost $3500 and is
expected to be a lesson horse for 5 years. Ignoring
the possibility that Ben may
have a resale value when he is retired from the
lesson program, straight line depreciation over 5
years is $700 per year. ($3500 divided by 5
years)
Annual Maintenance
This includes trim and shoes, normal veterinary
expense, grooming, blankets and halters, special feed
supplements, applicable insurance, etc, plus
hay, grain, bedding and labor for normal care.
Opportunity Cost
If Ben occupies a stall that could be occupied by
a “paying” boarded horse, the profit that would have
been generated after boarding expenses is also an
expense of Ben the lesson horse.
The key to analyze the contribution to profit
generated by each of your lesson horses is to
track how many lessons each is used for
each month and annually. A low-tech, low cost
clipboard with a chart and a pencil will accomplish
the task.
The goal is to know how many lessons old Ben
gives for the year.
Let’s Do The Math
Assume:
- "Ben" depreciates at $700 per year.
- Annual maintenance totals $3040 per year.
- Opportunity cost of stall is $1200 per year.
- Wow! $4940 per year or as much as $411 per
month!
- OK, you sell him for $3500 at the end of 5 years
for retirement only $353 per month
- Better yet, Ben lives in the 'Back Barn', no
opportunity cost. Only $253 per month.
In simplistic terms, $ 253 per month means if Ben is
only giving 3 lessons per week or 12 lessons per
month his cost per lesson is $ 21.00 ($ 253 divided
by 12) $ 21.00 doesn’t leave much to pay you or
your paid instructor and other operating expenses,
does it? You can see the plot thickens with higher
costs and lower school horse utilization rates.
Sammy Davis, Jr. said it best, “ Ouch, Babe”
Love your lesson horses, but make sure they are
pulling their own weight in lesson revenue.
Remember, if they aren’t pulling the farm freight, the
new owner will love them as much or more than you
do.
