Sunday, April 3, 2011

Starting With One and Working Up

Melissa and I get contacted several times a week from folks that are interested in replicating what we do. This is especially true on the horse side of our business for some reason. Primarily because we don't have time to answer every request for this sort of information in detail, some while ago we added a summary under "Run the Numbers" on our Paradigm Farms website. But maybe that doesn't do a very good job of sharing how we got started !

Just like every other business out there, we started with a website and some print advertising which was heavily supplemented by the cheapest advertising of all...telling everyone we knew that we were now in the horse retirement business !

And then came the biggest challenge.

Oh-my-God-what-to-charge !

We guessed at our costs and then added lots of room for error plus some extra for a profit. It may not be very scientific but it does work; six years later this is still how we arrive at what we charge.

I think our sort of boarding operation works best from a labour and financial standpoint when it's either small enough that you can do nearly everything yourself or when it's large enough that it requires considerable help. We can attest that being between those two extremes...when there is more work to be done than your "free" labour can reasonably accomplish but not really enough to justify an uncomfortable place to be.

Everybody asks for numbers here, but really that depends more on the circumstances of the person asking than it does on my answer ! Some people could probably do an excellent job and be very comfortable taking care of twenty or more horses with little to no additional help while others might be completely overwhelmed taking care of four. Similarly, some folks would think they were making a mint charging $ 150 per horse per month while others would feel like they were barely covering their costs while charging $ 1000 per horse per month. And they might both be right !

Here are a few additional truths we can share.

1. Don't quit that day job too soon ! Both Melissa and I had other sources of income for nearly five years while our business grew into itself. There are days I wish we STILL had additonal income to cover our living expenses. New businesses are capital sinks. Until your new business achieves a certain size, asking it to do more than finance itself is much like playing with fire. You are going to work a LOT of hours and not have very much time off during this phase.

2. Don't be in too much of a hurry to borrow. Just because you can doesn't mean you should. Most new businesses are shaky financially for a period of time and most people are equally shaky about the direction in which their new business might go. If there is ever a time to borrow money, it's after these two things have been fully figured out. We could have, and I am SO GLAD we didn't !

3. In any horse business I've ever heard of, you will never go wrong by budgeting more time and labour than you think possible toward look after your clients as well as their horses. Tending the people side of the business, with particular attention put toward minimizing drama while communicating openly and clearly with horse clients, is every bit as important as excellence in tending the horses.

Hope folks find this interesting and I hope my writing is at least somewhat coherent. Unlike Melissa, at least I got some sleep last night. We had a shipper arrive at 2:30 am so by the time the horse settled in enough to come in the house and turn out the lights we honestly might as well have stayed up. Yawn.


RuckusButt said...

I REALLY wish boarding barns, never mind retirement barns, would follow some of your principles. Where I am now is one of the best places I've heard of and even still they leave some things to be desired. I think Laura commented about the lack of pasture care/maintenance in a previous post. It's so true, no one puts in the effort. And that is at over $700/mth board!

Deborah said...

Read you often- sometiomes before the other blog..Love it!!