Are you pricing your livery services right?

As part of a new series, the EEA has teamed up with LiveryList to spread the word of Good Employment even further.

Cheryl Johns is the owner and founder of LiveryList and the Yard Owner Hub, she is a qualified and experienced yard manager, marketing advisor, and business consultant with experience across a range of industries. Cheryl works as a consultant for equestrian charities and organisations to develop their understanding of the livery sector.

In this first blog, Cheryl talks about the important topic, costs.

"We all know that the equestrian industry is one of the hardest to make a living. Costs of running a yard can be variable, and fluctuating. Recruitment and retention of good staff can be difficult. And the management of horses and their owners can bring unpredictable situations.

Whether you are a newly opened yard, or an established business, it is important to understand the financial status of your business. You should be clear on whether what you charge for your livery packages suitably covers your costs for providing those facilities and inclusions.

Unfortunately, for various reasons many yard owners are falling short with what they charge. This could be a reluctance to raise prices in case of losing clients, it could be knowingly keeping prices low to compete with other yards in the area, or it could be through naivety of costings or a lack of business knowledge.

The LiveryList Yard Owner Hub has resources and information on livery pricing to help you make the calculations, understand the how and the why, and the support and documentation to help you make any subsequent changes. This includes a very simple “Livery Charges Calculation Sheet” to help you work out your base costs for your livery packages.

One of the main factors that many yard owners overlook in their cost calculation is the costs of their own labour. Whilst they may include the costs of their employees and any associated employment costs, they often overlook their own labour in terms of time spent both practically and administratively running the yard. This applies to all yard types, even if you have a DIY yard there will still be a portion of time that is spent managing clients, on administrative tasks, and running the yard. There will always be a value to this time, and it should be apportioned correctly within your cost calculations. It is also important to remember not to undervalue your skill, experience or knowledge as the owner or manager of a yard, and to not simply base your costs upon minimum wage!

The same applies to services provided by the yard, such as ad-hoc or assisted services like holiday cover, grooming or exercising. Many yard owners often underestimate the time taken for such tasks, and undervalue the advantage to the horse owner, especially when many services- such as a turn out or bring in one end of the day- save the horse owners the time, fuel and hassle of visiting the yard. Therefore, not only must an actual time-related cost be applied in these charges, but a convenience factor as well, even more so if such services are requested at short notice.

Once you have calculated your costs and decided on any necessary price or structural changes to your livery packages and services, then it is important to bite the bullet and make immediate changes. These changes should be made across the board for all clients, both new and existing. We also have template documents on the Yard Owner Hub to help you professionally and effectively communicate these changes to your clients.

For those yard owners who fail to charge the appropriate amounts for their livery packages or services, there will always be a shortfall in their income. Too many yard owners run yards as a subsidiary or hobby business and end up dipping their hands into their own pockets to support the livery business. A business is a business and should be treated as such. Yard owners should not be expected to subsidise their clients’ horse ownership, and the more yards who price themselves correctly, the more value that is added to the industry, and the more horse owners will have to face up to an unavoidable increase in costs for keeping horses at livery.

For those needing support on the pricing for their livery yards,  the LiveryList Yard Owner Hub have available to watch a very useful and informative webinar 'How to run a profitable Livery Yard | Understanding Livery Yard Costs' covering in detail the understanding of costing livery packages and services."

Thanks Cheryl for talking about this important topic!