Owning a Horse FarmPossession of a horse farm
Thus, You Want To Buy A Horse Farm!
Editorial note: This is part 1 of a two-part lecture on buying your own horse farm. The second part, "Understanding the Money Game", describes the financial background of your horse farm and writes a genuine businessplan. Many of us have dreamed of having our own equestrian facilities and have taken into account all the benefits of our own wellbeing.
Dreams are often preferred to actualities, i.e. we put the legendary carriage before the horse! While guesthouses and breeders are naturally business, they all have something in common-a domicile on the land. Existing this dwelling will categorize the house as immovable assets, yet most home mortgage agents will not loan funds for them.
When a real estate is used for agriculture, agricultural/commercial purposes or is subject to certain real estate legislation in some countries, it is no longer suitable for a standard home loan. Usually, if the belongings are contained from too many acres or the stable has too many estates (usually over 6), it can be discredited by mortgages money providers, even if it is allotted housing.
For you as a potential purchaser, this means added value that goes beyond that of a residential building. It does not matter to the EBRD whether you are planning to use the plot or the stand area for revenue. While looking at any feature, you should be educating yourself as to your neighborhood zoning needs and how the feature is appreciated, so you know what kind of the loan you need to apply for.
As with any horse owners, we all have our own priority, which is most important to us, and that usually comes down to the needs of the horse we already own. Do your ponies tend to be a sport or a show? Their recreational ponies are no less important than costly show ponies, but be down-to-earth.
How important will a horse washing stand be to you if you have never bathed your horse in all the times you had it? Begin with a listing of YOUR horse. When you have amusement ponies and want to dress other amusement horse holders, it is possible that the two ranks look very similar.
You can then add any extra equipment you need for your operation to dress the same kind of boarders. Both of the articles on the two checklists are "must-haves" for your new company. Inquire other horse breeders (of the same destination market) to rate them as well. All this is part of your first research and the information will be useful to you later when you need to create your first businessplan.
As soon as you find a real estate with potentials, you have even more figures in front of you. It is NOT a pastime, but a shop! There is an interesting catch-22 in the bank sector when it comes to borrowing for a new deal. As a bank wants sound, historic finance information to make you happy when they lend you your funds, which will require you to create a 5-year projected operating income in your operating schedule - see the sarcasm?
REPROJECTing a cash inflow and outflow from a farm you don't even own? When you already own a horse, you know how much it takes to take it in. Keep a record of all your estimates, from the power to the chips needed to help the horse on the estate.
You are using mean values for each horse. While we know that each horse needs a slightly different amount of feed and different maintenance, we take an overall averaging. Some of the most important factors are the number of litres of horse feeds. For example, most ledgers on horse cares state stats already collected from hard dates on how many lbs of grass per lb of horse is needed by each horse per diem and how many gallons per diem they ingest.
You can increase the reliability of your budget by building on specific information. Do all your projection as a 30-day per months number. When you receive your policy estimate from your dealer, you should split these figures by 12 to get your cost per months. Although some expenditures, such as tax, may be incurred semi-annually, the EBRD requires that you turn these expenditures into monetary expenditures to calculate your monetary income requirements and to obtain a full overview of your company for an entire year.
As soon as you have the feeling that you have all your monetary expenses, you can create a basic calculation table with some formulae to compute your break-even point - this is referred to as break-even analyses. Each of your estimates are customizable, so you can refresh your Spacing Table as your pricing changes and you try different numbers of armored ponies.
If you have space for 20 ponies, for example, you can initially accept only 10 ponies and set a competitively priced rate for the particular area. When 10 ponies at $500/month lead to a monthly deficit, you can either boost your boardprice or the number of riders on your table.
They might find it is taking 18 ponies at $600 per month to even fraction. You may need to consider a cheaper real estate in this case. There is no reason to believe that you are always fully or almost fully utilized and that you will not be pushed out of the competition. Finding the "right" feature may take a while; you may not be able to find one the first day you start it.
It is much longer than a home loan, which often only lasts about 30 working day. With more research, "what if" and preplanning, the better you will be able to better understanding your needs for your money flows and the better you will be ready to make this a seamless, satisfactory experience that will be beneficial to you and your company for years to come.
For over 20 years Jennifer Goddard has been practicing horse riding with her own method. In addition, she has rode and shown in various sports and is the proprietor of Levaland Farm, a horse farm in Massachusetts. A graduate in Finance and Entrepreneurial Studies from Babson College, Jennifer is also President of equestrian company Equine Corporate Solutions.