Breakeven or Bust! Knowing Your Breakeven Can Keep Your Horse Business Right Side Up!

The concept of Breakeven is important because until you reach breakeven, your business is actually costing you money - not making you money. However, once your business has reached breakeven, each incremental sale (or a portion of it) becomes profit.

Breakeven is the point at which your Revenues equal your Expenses.

Breakeven measures time and money.

It helps you plan how long it will take you to make a profit and how much cash you will need to have on hand to survive until that point. 

It is helpful for both start-up and existing horse businesses.  Here are a few ways horse business owners can apply the concept of Breakeven and use the Equestrian Professional.com Breakeven Calculator.

1. If you are looking to fund your horse business with other people's money (like the bank or a private investor) - they will most likely ask you what your breakeven point is and how long it will take you to reach it. 

2. If you buy and sell horses – Breakeven will let you know how long you can afford to keep each horse and where you will need to price them to make a profit.

3. If you are considering a major business investment – i.e. new barn, truck and trailer etc.. Calculating Breakeven will help you figure out how many months it will take you to recoup your investment or how many horses you need to take to the shows each month to cover the expense of the trailer.

4. If you are introducing a new product or service and want to see how long you will need to “carry it” before it begins to pay off – for example:  camps or school horses, blanket wash & repair service, a series of seminars etc.

 To see a quick three minute video on Breakeven and to see the Equestrian Professional Breakeven Analysis Calculator in action - click here.