Looking for a horse training business plan? You're in the right place.
A training barn pays rent, wages and hay before the stalls fill. So how much money do you need to open? How many horses must you have in training before the barn breaks even? And what happens if owners send you fewer horses than you planned for? A blank template will not show you what a sensible answer looks like.
In this article we'll walk through a complete sample business plan for a horse training barn in Salt Lake City, Utah, section by section. We'll cover the executive summary, the SWOT analysis and, in particular, all of the financials.
Here's what you'll take away:
- The executive summary: see how to fit a barn, its programs and its funding on one page, so a lender knows what you're asking for within a minute
- The SWOT analysis: learn how to name a thin team and a lost riding week without scaring a reader off
- The start-up budget: find out what a truck, a trailer and a lease deposit add up to, and how big a reserve the slow first seasons call for
- Stall and ride capacity: check that your horse count matches the riders you can pay for, so you never promise five rides a week you cannot give
- The first year, month by month: spot the months when colt starts and board fall out of step, and plan your cash around them
- The five-year profit, cash flow and balance sheet: see how each hire, fee rise and hay bill shows up in the numbers
- The downside case: have an answer for "what if business runs 20% short?", with the steps the owner takes in response
If you're opening a training barn, read this before you write your own. The barn is fictional, so keep what fits your operation and change the rest.
In this plan
To turn this example into your own horse training business plan, use the horse training business plan template.
Ember Point at a Glance
Ember Point is a horse training barn that opens on January 1, 2027 on a leased property at the south end of Salt Lake County, Utah. It starts young western performance and ranch horses under saddle, keeps horses in full training with board, and coaches their owners in the lesson ring and at shows. Founder Kara Lindqvist owns 100% of the business.
The barn needs $215,000: $150,000 of Kara's savings and a $65,000 bank term loan. Of that, $65,000 buys a used truck and trailer and the barn's training equipment, $29,500 pays for legal work, licensing, the launch and the lease deposit, and $120,500 is held as a cash reserve.
| Year 1 | Year 2 | Year 3 | |
|---|---|---|---|
| Revenue | $425,800 | $575,700 | $662,900 |
| Net income after start-up costs | ($98,967) | $17,440 | $69,489 |
| Closing cash | $55,702 | $73,444 | $128,203 |
Eight owners have signed training agreements before opening, and the barn holds 14 horses in full training by December 2027. Year 1 loses money, because rent, a barn manager, a weekend hand and two riders are paid while the horse count builds one owner at a time. Year 2 is the first profitable year.
A downside case is part of the plan. If every revenue line falls 20%, Kara skips a hire, cuts marketing and her own pay and takes no distributions, and the barn still has cash in the bank at the end of every year.
The barn competes on one thing: horses that come home calm, sound and ridden by their owners. Kara starts every colt herself, sends owners progress video each week and teaches owners to ride the horse they have paid to have trained.
The Barn
Legal name: Ember Point Training, LLC, a Utah limited liability company. Owner: Kara Lindqvist, 100%. Premises: a leased 24-stall barn with a covered arena, a round pen and an outdoor arena on acreage at the south end of Salt Lake County. Start date: January 1, 2027, ahead of the spring colt-starting season. Stage: pre-launch. The lease is in review and eight owners have signed training agreements.
Why the barn exists
Send a horse home better than it arrived, and teach the owner to ride the horse that comes back.
Where the barn stands in three years
- 14 horses in full training by December 2027, up from 8 at opening.
- 13 colt starts in 2027 and 18 in 2028.
- A profit in 2028, the second year, and owner distributions from 2029.
- Three riders on the payroll from April 2027.
What the barn sells
| Program | How it is priced | Year 1 share of revenue |
|---|---|---|
| Full training and board | $2,400 a horse a month | 74% |
| Colt starting, 60 days | $5,800 with board | 18% |
| Owner lessons and show coaching | $85 an hour | 7% |
| Show hauling | $450 a show | 1% |
Who the barn answers to
Utah has a statute on equine activity liability, and the barn's training agreement, lesson release and posted warning signs are written around it. Counsel confirms the exact wording required before opening. The LLC elects to be taxed as a corporation. The barn also checks the leased parcel's zoning and the county's animal-keeping rules before the lease is signed, and the lease is conditional on both. A care, custody and control policy covers client horses while they are in Kara's hands, and workers' compensation covers the crew.
Horse Owners Along the Wasatch Front
Demand and the pay behind the work
The USDA's 2022 Census of Agriculture counted 7,190 farms in Utah with horses and ponies, holding 49,735 head on December 31, 2022. Most of those farms keep fewer than 25 animals. These are state totals and not a count of the owners within an hour of the barn, so the plan does not claim a local market size. What it needs is modest: about 16 horses in training and 20 colt starts a year, drawn from owners across the south end of the valley.
The pay behind the work
The Bureau of Labor Statistics put median pay for animal trainers at $39,990 in May 2025 and projects 4% employment growth from 2025 to 2035. Animal caretakers earned a median of $35,360, with 12% projected growth over the same period. Both are broad occupations that include dog and marine animal work, so they only hint at what a horse barn pays. Kara's $64,000 salary is the plan's own figure for an owner-trainer who also manages the business, and the assistant trainer and riders are paid between $36,000 and $46,000.
What an owner pays a barn
Fees for full training, colt starting and lessons differ widely between barns and between disciplines, and no published average for Salt Lake County is quoted here. The $2,400 monthly fee covers stall, feed and five rides a week and is the plan's own price. It is set against the barn's direct cost of roughly $380 a horse a month for hay, grain and bedding, and against the rides each horse needs, which is where the riders' time goes.
Who else an owner could send a horse to
| Alternative | What it offers | Why an owner picks it | How Ember Point differs by design |
|---|---|---|---|
| Large boarding and training stables | Many stalls, several trainers, indoor facilities | One address for board, lessons and shows | Three riders for 14 to 19 horses, and Kara starting every colt herself |
| Trainers at breeding and show farms | Training attached to a sales or breeding program | Prospects can be sold or shown through the same farm | No horses for sale, so no conflict between training and selling |
| Independent trainers who travel | Lessons and tune-ups at the owner's own property | Lower cost, and the horse stays at home | Five rides a week on a set schedule, which a visit once a week cannot give |
| Do-it-yourself with clinics | Occasional clinics and online videos | Cheapest route | Month-by-month progress reports and a plan for each horse |
The table describes what each category offers. It is not a ranking, and no individual stable is named.
SWOT
| Strengths | Weaknesses |
|---|---|
| Fourteen years of starting and showing western horses | One lead trainer, so a lost week of riding means a lost week of income |
| Eight signed training agreements before opening | Year 1 loses money and draws on the reserve |
| A covered arena that works through the winter | No name yet beyond Kara's past clients |
| Opportunities | Threats |
|---|---|
| Owners with young horses who want a start before they ride | A feed or hay price spike inside a fixed monthly fee |
| Show-day coaching as an extra for training clients | A rider injury during the spring rush |
| Referrals from vets, farriers and tack shops | A larger stable cutting its price to fill its stalls |
Who Sends Us Their Horses
Owners of young and green horses
Most are adults who bought a two- or three-year-old for the trail, the ranch or the local show circuit, and who want the horse started right before they climb on. They are usually good with horses and short of daylight hours.
Owners of horses with a problem
A horse that bucks, will not load or has been ridden hard and sour. The owner wants it fixed and does not want to be told to sell. These are the owners most likely to stay on after the first program ends.
The owner who wants to ride better
Training horses are the barn's core, but many owners end up needing lessons to ride what they have paid to have trained. That is where the lesson hours come from.
What owners ask of the barn
Their horse comes home sounder and calmer than it left. They see how it is going. The monthly fee does not change halfway through.
Filling the Stalls
From first call to training agreement
A phone call or message, then a visit to the barn where Kara rides the horse or watches it being led. A written training agreement follows within two days, with the fee, the program length, who pays the farrier and vet and what happens if the horse is injured or a bill is unpaid. Board is billed on the first of each month in advance.
The Year 1 owners
About 24 new owners find the barn in Year 1. Fourteen horses arrive in full training to take the barn from 5 to 12 while about 7 leave, and 10 more owners come for a colt start without staying on.
| Where they come from | New owners | Share |
|---|---|---|
| Vets and farriers | 9 | 38% |
| Kara's past clients and word of mouth | 7 | 29% |
| Social media and search | 5 | 21% |
| Shows and clinics | 3 | 12% |
How fees are set
The $2,400 monthly fee and the $5,800 colt start are flat, and the farrier and vet bills are the owner's. Fees rise 3% a year from Year 2. Lessons are $85 an hour.
Keeping horses in the barn
Kara expects a started colt to stay on in full training for a few months, and expects horses whose owners take lessons to stay longer. The plan holds horse counts below the 24 stalls so that Kara never has to take a horse she cannot ride five times a week.
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Average horses in full training | 10.9 | 14.0 | 15.5 | 15.5 | 16.0 |
| Colt starts | 13 | 18 | 20 | 20 | 20 |
Growth flattens after Year 3 because the riders reach their limit first. A fourth rider would call for a larger barn, and the plan stops short of that.
Eight owners before opening
Eight owners signed training agreements before the barn opened. They came from Kara's earlier clients, who followed her when she left the barn where she worked. Her old contract has no non-compete clause, and a lawyer has read it.
Getting Seen Around the Valley
What marketing costs and what it buys
Year 1 marketing is $16,000: $7,000 of launch spending funded from the start-up capital plus $9,000 of running costs. That is 3.8% of Year 1 revenue, falling to 1.7% by Year 3 as vets, farriers and past owners do the referring. Across 24 new owners it works out to about $667 each, around a quarter of one month's board.
| Channel | Year 1 spend | What it is expected to do |
|---|---|---|
| Website and training videos (launch) | $3,500 | A site with program pages, weekly progress-video samples and a booking form |
| Signage and photography (launch) | $2,000 | A road sign, barn photographs and a printed one-page program sheet |
| Open-barn day (launch) | $1,500 | A Saturday when owners, vets and farriers meet Kara and see the barn at work |
| Search and local listings | $2,500 | Pages for colt starting and horse training near Salt Lake City, a maps listing |
| Show and clinic sponsorships | $2,000 | A banner and a handful of tack-room visits at local shows; about 3 owners |
| Social media ads for colt starting | $2,000 | Short videos of a colt's first rides, aimed at owners within an hour's drive; about 5 owners |
| Vet, farrier and tack-shop visits | $1,000 | A coffee, a program sheet and a thank-you card for each introduction; about 9 owners |
| Client events | $1,500 | Two evenings a year when owners watch their horses work |
Marketing milestones
- January 2027: website live, eight owners' horses in the barn.
- April 2027: 10 horses in full training and the spring colts under saddle.
- September 2027: 12 horses in full training, plus the fall colt starts.
- December 2027: 14 horses in full training and $33,600 of monthly board income.
A Day in the Barn
The leased property
Twenty-four stalls, a covered arena, a round pen and an outdoor arena, leased at $8,000 a month on a seven-year net lease that rises 3% a year, with a two-month deposit. The term matches the bank loan. If the parcel fails the zoning check, the lease is not signed and no deposit is paid. Arena footing, fencing and barn repairs come to $9,000 in Year 1 and $11,500 by Year 5, and property tax and building insurance pass through to the barn on top of rent.
How a day runs
Feeding starts at 6:30. Kara and the riders work through about seven horses each until about 1:00, and the barn manager handles turnout, stall cleaning and the farrier and vet visits. Afternoons are for lessons, owner visits and paperwork. A part-time hand covers weekend and holiday feeding and turnout, and horses get a day off each week.
Occupancy and rides
Riders set the ceiling before stalls do. At the busiest point in Year 1 the barn holds 16 horses, 67% of its stalls. By Year 3 it averages about 19, or 78%. Each horse in training or under colt-start needs five rides a week, which is about 94 rides a week at that count. Two riders can give 70 and three can give 105. April of Year 1 needs about 70, so the third rider starts in month 4. In Year 3 the barn runs at about 90% of ride capacity.
Feed and hay
Hay is bought on account from a local grower and stored in the barn's hay shed ahead of winter. Hay, grain, bedding and manure removal come to $62,084 in Year 1. The monthly fee is fixed for the length of each training agreement, so any price spike falls on the barn.
Licenses and coverage
- The LLC's registration with the state and any city or county business license or permit that applies to the parcel, confirmed with counsel.
- A training agreement, lesson release and signage written to Utah's equine-activity statute, with wording confirmed by counsel.
- Care, custody and control insurance on client horses, general liability, property coverage and workers' compensation, budgeted together at $19,000 in Year 1.
- A written protocol for colic, lameness and injury, including the vet on call and who the owner can reach at night.
Vets, farriers and haulers
A vet and a farrier each serve the barn, and a second of each is on the list. A local grower supplies hay and a feed store the grain. None is hard to replace, but hay is the one input Kara tries to contract ahead.
Kara and the Crew
Kara Lindqvist, founder and head trainer
Kara has trained horses for fourteen years, the last nine as assistant and then head trainer at a south valley barn where she handled about ten horses in full training. She grew up showing in western events, holds a degree in animal science and teaches lessons on weekends. Her $150,000 investment is the savings of those years.
Where the team is thin
Kara has not run payroll, billed monthly clients or negotiated a lease on her own. The plan covers these with an accountant on a monthly engagement, a lawyer for the lease and the training agreement, and billing software that charges board on the first of the month.
If Kara is injured
A training barn cannot ride without its trainer. Kara carries disability insurance, and from month 3 the assistant trainer and the rider can keep the training horses moving for a few weeks. Owners are told in the training agreement that program dates can move if the horse or the trainer is hurt.
Outside help
A retired trainer who runs a larger barn reviews the numbers with Kara each quarter. Kara uses the extension service and a local equestrian association for clinics and for owner referrals.
Ownership and the bank
Kara owns 100% of Ember Point Training, LLC and signs a personal guarantee for the loan. The bank takes a lien on the truck and trailer and asks for quarterly accounts.
Financial Plan
The tables below come from one five-year model of the barn: twelve months in detail, then one column per year. The barn figures sit first so a reader can test the fees, stall counts and ride counts before looking at the results.
Truck, tack and cash reserve
| Use of funds | Amount |
|---|---|
| Used three-quarter-ton truck and four-horse trailer | $42,000 |
| Round pen panels, wash rack, feed room and tack-room fit-out | $14,000 |
| Training tack, saddles, groundwork and arena equipment | $9,000 |
| Business license, county permit and insurance binding | $1,500 |
| Legal: entity, lease review, training and board contracts, release forms | $5,000 |
| Launch: website, video, signage and open-barn day | $7,000 |
| Lease deposit (two months at $8,000, refundable at lease end) | $16,000 |
| Cash reserve for the slow first seasons | $120,500 |
| Total uses | $215,000 |
| Source of funds | Amount |
|---|---|
| Kara Lindqvist's savings | $150,000 |
| Bank term loan | $65,000 |
| Total sources | $215,000 |
Kara puts in $150,000 of her savings, 70% of the $215,000, and borrows $65,000 from a bank over seven years at 10.5%, interest only for the first twelve months. The rate is a planning figure and not a quote. The bank takes a lien on the truck, the trailer and the barn's other equipment, plus Kara's personal guarantee, and the seven-year term matches the lease. The lease deposit is refundable at the end of the lease, but the model has no deposit asset, so it is charged as a start-up cost and the cash is treated as spent. The $120,500 reserve is the biggest single line on purpose. Rent and wages start on day one, the horse count builds one owner at a time, and Year 1 still loses $98,967 after start-up costs.
Barn figures behind the forecast
- Full training and board costs $2,400 a horse a month. It covers the stall, hay, grain, shavings and five rides a week, and it is priced as a premium barn with a small herd per rider. Farrier and veterinary bills go straight to the owner. Kara opens with 8 horses and ends Year 1 with 14, which adds up to 131 horse-months. About 14 horses arrive during the year and about 8 leave as programs finish or horses are sold. Average counts for Years 2 to 5 are 14, 15.5, 15.5 and 16 horses, and fees rise 3% a year from Year 2.
- A colt start is a 60-day program at $5,800 with board included, or $2,900 a month. That sits above the $2,400 training fee because a colt needs daily work and carries more risk of injury. Year 1 has 13 starts, bunched from February to May and again in September, and the count rises to 18, then 20 a year. A colt holds a stall for two months, so colts fill about 3 stalls on average once the program reaches 20 starts.
- Owner lessons and show-day coaching bill at $85 an hour from March: 360 hours in Year 1, about 520 in Year 2 and 640 in Year 3, rising to 720 by Year 5. Hauling to a show is $450, with 12 shows in Year 1 between April and October and 16 to 18 a year after that.
- The barn leases 24 stalls. The busiest month in Year 1 is October, with 16 horses (13 in training and 3 colts), 67% of the stalls. Year 3 averages about 19 (15.5 training horses and about 3 colts), 78% of the stalls. Each rider gets through about 7 rides a day, five days a week, or 35 rides, and every training horse and colt needs five rides a week. April of Year 1 needs about 70 rides, which two riders can just give, so the third rider starts in month 4. From then three riders give 105 rides a week. The busiest Year 1 month needs 80, and Year 3 needs about 94, or 90% of capacity, with Kara teaching about 12 hours a week on top.
- Hay, grain, bedding, supplements and manure removal run at 16% of board revenue, 14% of colt-start revenue and 4% of lessons. In Year 1 that is $62,084, or 15% of all revenue. Hay prices swing from one season to the next, so this is the line to watch.
- Payroll adds 27% to wages for payroll taxes, health coverage and a small retirement match (15% for the part-time hand). Workers' compensation premiums sit in the insurance line instead. Wages in the crew table are launch rates, and 3% pay raises are charged as a separate line from Year 2. Board is collected by bank debit, so the model carries no card fees.
- Rent is $8,000 a month for a 24-stall barn with a covered arena and acreage, on a seven-year net lease that rises 3% a year, plus a two-month deposit. Property tax and building insurance are passed through under the net lease and shown on their own line. Equestrian property leases vary a great deal by parcel and county, so the rent is the plan's own figure, and the lease is conditional on the parcel's zoning and animal-keeping rules.
- Insurance of $19,000 in Year 1 covers care, custody and control on client horses, general liability, property and workers' compensation for the riders. Arena footing, fencing and barn repairs run at $9,000 in Year 1.
- Board is billed on the first of the month in advance, while lessons and hauling go out on invoice, so receivables average 8 days. Feed and hay suppliers give about 20 days. The bad debt allowance starts at $1,500 for owners who fall behind.
- The LLC elects to be taxed as a corporation, so the model charges the 21% federal corporate rate and a 4.5% Utah rate used as a planning figure. Confirm the current Utah rate with the State Tax Commission, because it may change. The Year 1 loss carries forward. A barn that stayed a pass-through entity would pay tax on the owner's return and keep more cash in the business.
- Owner distributions of $15,000, $20,000 and $25,000 are paid in Years 3 to 5, only from cash the model shows the barn can spare.
Revenue by program
| Revenue stream | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Full training and board | $314,400 | $415,300 | $473,600 | $487,900 | $518,600 |
| Colt starting (60-day programs) | $75,400 | $107,500 | $123,100 | $126,800 | $130,600 |
| Owner lessons and show coaching | $30,600 | $45,500 | $57,600 | $64,900 | $68,800 |
| Show hauling | $5,400 | $7,400 | $8,600 | $8,900 | $9,100 |
| Total revenue | $425,800 | $575,700 | $662,900 | $688,500 | $727,100 |
| Growth on prior year | – | 35% | 15% | 4% | 6% |
Board and training pays for the barn: 74% of Year 1 revenue and 71% of Year 3. Colt starts supply 18% in Year 1 and 19% in Year 3, and they matter beyond their size because a colt arrives in a spring or late-summer month when board numbers have not yet caught up. Lessons and hauling together bring in 8% in Year 1 and 10% in Year 3. They use the same riders and the same arena, so they add little cost.
Month by month in Year 1
| Month | Full training and board | Colt starting (60-day programs) | Owner lessons and show coaching | Show hauling | Total revenue | EBITDA |
|---|---|---|---|---|---|---|
| Jan 2027 | $19,200 | $0 | $0 | $0 | $19,200 | ($18,246) |
| Feb 2027 | $19,200 | $5,800 | $0 | $0 | $25,000 | ($13,292) |
| Mar 2027 | $21,600 | $11,600 | $1,700 | $0 | $34,900 | ($4,835) |
| Apr 2027 | $24,000 | $11,600 | $2,380 | $450 | $38,430 | ($1,820) |
| May 2027 | $24,000 | $11,600 | $2,890 | $900 | $39,390 | ($1,000) |
| Jun 2027 | $26,400 | $5,800 | $3,230 | $900 | $36,330 | ($3,614) |
| Jul 2027 | $26,400 | $5,800 | $3,400 | $900 | $36,500 | ($3,468) |
| Aug 2027 | $28,800 | $5,800 | $3,400 | $900 | $38,900 | ($1,418) |
| Sep 2027 | $28,800 | $11,600 | $3,740 | $900 | $45,040 | $3,826 |
| Oct 2027 | $31,200 | $5,800 | $3,740 | $450 | $41,190 | $538 |
| Nov 2027 | $31,200 | $0 | $3,060 | $0 | $34,260 | ($5,382) |
| Dec 2027 | $33,600 | $0 | $3,060 | $0 | $36,660 | ($3,332) |
Board income climbs by about a horse a month all year. Colt starts cluster from February to May and again in September, which lifts revenue to $45,040 in September and holds it near $36,000 through the summer. Operating profit (EBITDA) is positive only in September and October and negative in the other ten months. The lowest month-end cash balance is in Dec, at about $52,000 once the 8-day wait on invoices is taken out.
Barn crew
| Role | Annual wage | Starts | Year 1 end | Year 2 end | Year 3 end | Year 4 end | Year 5 end |
|---|---|---|---|---|---|---|---|
| Founder and head trainer | $64,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Barn manager and groom | $40,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Assistant trainer and rider | $46,000 | Month 3 | 1 | 1 | 1 | 1 | 1 |
| Weekend and holiday barn hand (part time) | $22,000 | Month 1 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Rider and groom | $38,000 | Month 4 | 1 | 1 | 1 | 1 | 1 |
| Total payroll incl. on-costs | $242,258 | $264,060 | $264,060 | $264,060 | $264,060 |
Kara, the barn manager and a part-time weekend and holiday hand open the doors in January, so the barn is staffed seven days a week from the start. The barn manager rides the quieter horses until the assistant trainer joins in month 3, as the first colts arrive. A second full-time rider and groom starts in month 4, ahead of the spring rush. After month 4 nobody else is hired, which is why payroll sits at $264,060 from Year 2, with raises charged separately. Kara's $64,000 salary is already in payroll.
Profit and loss
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $425,800 | $575,700 | $662,900 | $688,500 | $727,100 |
| Hay, grain, bedding and horse supplies | ($62,084) | ($83,940) | ($96,654) | ($100,387) | ($106,015) |
| Gross profit | $363,716 | $491,760 | $566,246 | $588,113 | $621,085 |
| Payroll incl. on-costs | ($242,258) | ($264,060) | ($264,060) | ($264,060) | ($264,060) |
| Rent | ($96,000) | ($98,900) | ($101,900) | ($105,000) | ($108,100) |
| Utilities | ($12,000) | ($12,400) | ($12,800) | ($13,200) | ($13,600) |
| Marketing | ($9,000) | ($10,000) | ($11,000) | ($11,000) | ($12,000) |
| Insurance | ($19,000) | ($21,000) | ($22,500) | ($24,000) | ($25,000) |
| Professional fees | ($6,000) | ($6,500) | ($7,000) | ($7,000) | ($7,500) |
| Software subscriptions | ($1,800) | ($2,200) | ($2,500) | ($2,700) | ($2,800) |
| Arena footing, fencing and barn repairs | ($9,000) | ($10,000) | ($10,500) | ($11,000) | ($11,500) |
| Property tax and building insurance (net lease) | ($9,000) | ($9,300) | ($9,600) | ($9,900) | ($10,200) |
| Truck, trailer and fuel | ($6,000) | ($7,500) | ($8,500) | ($9,000) | ($9,500) |
| Tack and equipment replacement | ($3,000) | ($3,500) | ($4,000) | ($4,500) | ($4,500) |
| Memberships, clinics and continuing education | ($1,200) | ($1,500) | ($1,500) | ($1,800) | ($1,800) |
| Bad debt allowance | ($1,500) | ($2,500) | ($3,000) | ($3,200) | ($3,400) |
| Annual pay raises (3% a year) | $0 | ($7,922) | ($16,081) | ($24,485) | ($33,142) |
| EBITDA | ($52,042) | $34,478 | $91,305 | $97,268 | $113,983 |
| Depreciation | ($10,600) | ($10,600) | ($10,600) | ($10,600) | ($10,600) |
| Interest | ($6,825) | ($6,437) | ($5,533) | ($4,528) | ($3,413) |
| Income tax | $0 | $0 | ($5,683) | ($20,169) | ($24,548) |
| Net income before start-up costs | ($69,467) | $17,440 | $69,489 | $61,970 | $75,422 |
| Start-up costs expensed at opening (legal, licensing, launch marketing, lease deposit) | ($29,500) | $0 | $0 | $0 | $0 |
| Net income after start-up costs | ($98,967) | $17,440 | $69,489 | $61,970 | $75,422 |
Year 1 shows an operating loss of $52,042 and a net loss of $69,467 before start-up costs, $98,967 after the $29,500 of legal, licensing, launch and lease-deposit spending. Year 2 is the first profitable year at $17,440: revenue rises 35% while payroll rises 9%. Year 3 reaches $69,489, a 13.8% EBITDA margin, which climbs to 15.7% by Year 5. Income tax is $5,683 in Year 3, small because the earlier losses carry forward, and $20,169 in Year 4, which is why net income dips in Year 4.
Cash movements
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Cash from operations | ($94,298) | $25,953 | $78,874 | $72,214 | $85,485 |
| Equipment and fit-out | ($65,000) | $0 | $0 | $0 | $0 |
| Funding received | $215,000 | $0 | $0 | $0 | $0 |
| Loan principal repaid | $0 | ($8,210) | ($9,115) | ($10,120) | ($11,235) |
| Owner distributions | $0 | $0 | ($15,000) | ($20,000) | ($25,000) |
| Net change in cash | $55,702 | $17,742 | $54,759 | $42,094 | $49,250 |
| Closing cash | $55,702 | $73,444 | $128,203 | $170,298 | $219,547 |
Cash closes Year 1 at $55,702, after the $65,000 of equipment and a $94,298 operating outflow, and grows every year after that, even with distributions, to $219,547 in Year 5. The loan pays interest only in Year 1, so principal repayments of $8,210 start in Year 2.
Balance sheet
| At year end | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Cash | $55,702 | $73,444 | $128,203 | $170,298 | $219,547 |
| Accounts receivable | $9,333 | $12,618 | $14,529 | $15,090 | $15,936 |
| Equipment and fit-out (net) | $54,400 | $43,800 | $33,200 | $22,600 | $12,000 |
| Total assets | $119,435 | $129,862 | $175,933 | $207,988 | $247,484 |
| Accounts payable | $3,402 | $4,599 | $5,296 | $5,501 | $5,809 |
| Bank loan | $65,000 | $56,790 | $47,675 | $37,555 | $26,320 |
| Paid-in capital | $150,000 | $150,000 | $150,000 | $150,000 | $150,000 |
| Retained earnings | ($98,967) | ($81,527) | ($27,038) | $14,932 | $65,355 |
| Total liabilities and equity | $119,435 | $129,862 | $175,933 | $207,988 | $247,484 |
Margins and break-even
| Measure | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| EBITDA margin | -12.2% | 6.0% | 13.8% | 14.1% | 15.7% |
| Net margin (before start-up costs) | -16.3% | 3.0% | 10.5% | 9.0% | 10.4% |
| Payroll incl. pay raises as share of revenue | 57% | 47% | 42% | 42% | 41% |
| Revenue per full-time equivalent at year end | $94,622 | $127,933 | $147,311 | $153,000 | $161,578 |
| Average monthly revenue | $35,483 | $47,975 | $55,242 | $57,375 | $60,592 |
| Monthly revenue needed to cover operating costs | $40,560 | $44,611 | $46,334 | $47,886 | $49,472 |
| Debt service cover (EBITDA / interest + principal) | -7.6x | 2.4x | 6.2x | 6.6x | 7.8x |
In Year 1 the barn averages $35,483 a month against $40,560 needed to cover costs, so it loses money. Year 2 averages $47,975 against $44,611, a narrow pass with about 7% of headroom. Year 3 averages $55,242 against $46,334, about 16% of headroom. Debt service cover is negative in Year 1, 2.4x in Year 2, the thinnest profitable year, and 6.2x in Year 3. A bank would want to see more than 2x, and Year 2 is the year Kara would watch.
A season with 20% less business
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $340,640 | $460,560 | $530,320 | $550,800 | $581,680 |
| Net income before start-up costs | ($87,960) | ($12,460) | $32,568 | $37,215 | $45,823 |
| Net income after start-up costs | ($117,460) | ($12,460) | $32,568 | $37,215 | $45,823 |
| Closing cash | $38,396 | $26,656 | $59,737 | $97,147 | $141,906 |
Every revenue line is 20% lower in every year. Kara's response is to skip the rider and groom hire, cut marketing by 20%, draw 20% less pay and pay no distributions. With two full-time riders, the barn manager takes warm-up rides and Kara schedules fewer lesson hours. On those terms the barn ends every year with cash, never below $26,656, and is profitable by Year 3. Year 1 loses more, which leaves equity at $32,540, so Kara would speak to the bank before the first net-worth test date.
Sources
- Bureau of Labor Statistics, Animal Care and Service Workers, Occupational Outlook Handbook: median pay for animal trainers ($39,990) and animal caretakers ($35,360), May 2025, and projected growth 2025 to 2035.
- Utah Code Title 78B, Chapter 4, equine activity liability. The page could not be opened when the plan was written, so the statute is described in general terms only and counsel confirms the current wording.
- Utah State Tax Commission, corporate franchise and income tax. The page returned an access error, so the 4.5% state rate is a planning figure to confirm.
- USDA National Agricultural Statistics Service, 2022 Census of Agriculture, Utah state report, equine inventory table: 7,190 farms and 49,735 head of horses and ponies. The figures are as reported in a search extract of the table, which was not opened directly, so confirm them against the PDF.
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