The State of Horse Businesses
by Richard Bacon
It has long been commented that horses and money do not fit comfortably together. This wisdom has been assumed to apply equally to business and privately owned horses. This article highlights recent research into the financial performance of a range of UK equine enterprises.
A study of comment on the riding school sector over recent years makes for depressing reading. Time and again, the same themes emerge - centres forced to close, with the reasons attributed to one or more of the following: competition from "unlicensed" yards or diversified farms; impact of the National Minimum Wage; "excessive" business rates, colleges, etc. etc.
The purpose of this article is to question some of the assumed wisdom of the sector, and to open up new possibilities. It is my contention that the oft-repeated woes of the sector are largely myths, disguising both its true state, and the underlying reasons for the contraction in riding school numbers over recent years.
First, the true state
of riding schools. The main findings of the research, when compared to
previous research conducted 6 years ago, can be summarised as:
So what of riding school closures? Undoubtedly there have been casualties over recent years, with ABRS suggesting a decline of over 20% since 1988. However, this sort of decline is by no means unique to riding schools. Earlier research from 1995/6 suggested that between ¼ and one third of centres were financially non-viable. The closures have been predominantly weak, usually inefficient, businesses. The frequently quoted reasons for closures may have been the final straws that broke weak backs. The updated research is much more positive - those centres that have survived are in a better state.
The research has also looked at a wide range of enterprises - including race training, stud and livery.
The troubles of the stud sector have also been widely publicised in recent years. These are largely borne out by the data. The old adage, that "fools breed horses for wise men to buy" has a ring of truth about it. The collapse in the market for native ponies has left many people struggling to recover the cost of breeding, let alone any business overheads. There continues to be a market for quality horses, but only for the best. This is a sector that needs serious change - essentially too many people are breeding too many animals for which there is no market.
Most other sectors have benefited from the favourable economic climate of the last few years. This has led to increasing horse ownership - to the benefit of both livery yards and racehorse trainers.
We are standing in a period of economic prosperity and stability unparalleled in recent UK history. There is an increased awareness of the importance of exercise, accompanied by the spending power to pursue it in an enjoyable way. This bodes well for those businesses that possess the management skills to capitalise on the opportunities. But to compete in this new era, the service offering has to be right. All consumers are becoming more discerning, even the young. The best in the sector have seen new ways of doing business; others need to catch up. This is a change more dependent on attitude than money!
Richard Bacon is Equine
Senior Curriculum Leader and Lecturer in Equine Business Management at
Warwickshire College, England.
The research mentioned
has been published in the Equine Business Guide, 4th Edition, available
from Equistudy, Warwickshire College, Moreton Morrell, Warwick CV35 9BL.
It provides detailed costings for a range of horse businesses, plus a
wealth of other useful information. It is essential reading for pro-active
business managers, and all who require reference data on equine enterprises.
The price of the Equine Business Guide is £18.
Please visit Equistudy at www.equistudy.ac.uk.