Horse Business Q&A - How Can a Boarding Stable Diversify Their Income?

We received 100's of excellent questions during and after our horse business seminar.  Since we couldn't answer all of them during the seminar, we will be providing answers and information both here in our newsletter and on the Equestrian Professional website. One subject many people were interested in was diversification. Here is one of the questions we received regarding diversification and boarding stables.

Susan- Ohio, USA 
What are some ways to diversify the boarding business to make it more profitable without having a public riding lesson program?

Dear Susan,
Thank you for a great question. There are several very important things to consider when it comes to diversifying and while it may be tempting to take short cuts and try new ideas prior to testing them – I highly encourage you to test your ideas on paper first! Here are some basic guidelines that you can use to identify diversification opportunities and a few examples to give you some ideas for your boarding stable.

There are basically two phases to diversifying your income and offerings.

1. Discover any additional needs and wants your clients and potential clients may have that you can fulfill.

2. Determine if fulfilling those needs is profitable and practical for your business.

Phase 1

Make a list of horse related services and products that your current and potential customers may need and/or want and how they currently fulfill these needs.

For example: 

         

The Need or Want	How It Is Being Fulfilled
Customers regularly purchase supplements or extra feed	The feed store down the street and online vendors
Customers enjoy taking clinics	We currently host one clinic per year but several of our clients ship to other clinics through out the year
Customers enjoy beach (or trail) rides off the property	We have a trailer and used to take them for free but haven't done this in a while
Many customers are working longer hours and have asked for extra services	We've been throwing in a few turn outs and blanketing from time to time for free.
A few customers have expressed an interest in half leasing there horses	In the past we have not assisted in this
With winter right around the corner our clients are looking for body clipping -	They find outside people to do this

                                                                                                                                                                                                                    

Note: These are just a few examples and your own list should contain many more!

Phase 2

Examine the practicality and profitability in terms of resources, reputation and profit margins. 

For this portion, I highly recommend you use some of the tools on the site to test each idea before your try them in your business. Look carefully before you leap! Here are the areas you must consider!

Will this product/service be profitable?

Be sure you take the time to figure out your profit margins. Use our online Equestrian Business Profit Calculator . This will help you to price your services properly and maximize your time.  I cannot stress how important it is not to guess or assume something will be profitable  Far too often people implement the wrong plan and/or miss opportunities because they did not take a few minutes to check their profit margins. 

Example: If a stable owner didn't know their $600 per month board fee had a profit margin of only 4% or $25.00 and offering a blanketing service for $1.00 per day ($30 per month) has a profit margin of nearly 100% (because in this case there was no additional overhead involved) they  might not think it was worth it to offer the blanketing.  Even though the barn couldn't offer the blanketing unless they provided the boarding - the little blanketing fee actually made them more money than the boarding.

Does adding this service detract from our other offerings?

Example: If one of the biggest reasons clients board at your stable is because you offer a quiet adult atmosphere - you wouldn't want to run a camp for children

Does this product/service provide benefit to our current customers?

Example: The added benefit of “convenience” that providing your clients with feed supplements –may add. (Even if the price is the same as going to the feed store – the convenience of not having to haul it out to the barn may provide substantial benefit to your client.)

Will adding this product/service help us to attract new customers?

Example: While you may host clinics or educational seminars that are mostly geared towards your current clients –but may attract new clients, especially if you market them well.

Is this product/service consistent with our identity/ branding?

In other words, is it compatible with what we stand for as a business or does it confuse the customer? If your business caters to upscale dressage ladies you might not want to diversify into breaking mustangs even if you had the perfect employee to do just that.

Finally –

Does this product/service compliment or compete with our current offerings?

This is very important! Every now and then people will diversify in such a way that what they offer only takes business away from another part of their business -  

For example: A turn-out and grooming package that is so inexpensive it encourages clients to drop their horse out of training, Or hosting so many great clinics your clients don't attend as many horse shows with you as they normally would. Take care with your pricing and be sure to look at every new diversification idea from several angles!

Remember - Your goal in diversifying is to create more income and opportunity. Do not jump in with your eyes closed.  Test the practicality and profitability of each idea on paper before you implement them.

Hope this helps!

          Sincerely,

                       Elisabeth McMillan

PS.   There are many tools on the site to help you successfully identify and implement diversification strategies - try "60 Income Diversification Strategies for Horse Professionals" and check the links at the bottom of this page for more information and support. You may want to take a look at our quick guide to Member Benfefits , even if you are already a member  - it can help you get optimal use from your membership.

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