| In
the new economy, where dot-com companies go public
and declare bankruptcy - all before breakfast
- it’s more important every day for enterprises
to develop a sound business plan. Before you can
effectively market anything you must first identify
your product, produce it at a reasonable cost
and, finally, make buyers aware of what you have
to sell. You must have a plan!
Many
horse breeders seem to operate without much of
a plan. That’s understandable. Most breeders get
involved because of personal satisfaction. Doing
something you enjoy is important, but that doesn’t
always lead to a sound bottom line. Wanting to
raise a few foals and sell them to good homes
often leads to emotional decisions. Those decisions
usually lead to a real dilemma - a field full
of horses with no buyers coming up the driveway.
Identify
your product
The most difficult horse to sell today is what
experienced horsemen often refer to as a “tweener.”
A tweener is one with a mixed heritage - not enough
bulk for halter and too much bulk and not enough
athleticism to perform. Study the pedigrees of
most mixed consignment sales, and you will be
amazed at how many tweeners are offered in each
catalog. The results are predictable - disappointed
sellers whose horse failed to command a bid that
met their production cost, and disappointed buyers
who had hoped their bargain purchase would become
more than a backyard pet.
At
Hilldale Farm, we changed our product over the
years. Previously, we focused on all-around horses
so we emphasized versatility in our bloodstock
selection, training and advertising. The plan
met with some success, but we found that the prospects
suited to a particular event sold the best.
Six
years ago, we made our goal much more specific.
We resolved to concentrate on raising performance
horses specifically for reining and working cow
horse. To make the plan work, we sold 36 of the
38 broodmares that grazed here 10 years ago.
The
market for quality horses is very strong today,
but most buyers have very specific criteria. Horses
that are bred, built and prepared to do a specific
job bring the top prices. Whether the event is
cutting, reining, western pleasure, hunter under
saddle, racing or halter, you must meet the buyer’s
strict requirements to make a good sale.
Pedigree
A pedigree seldom sells a horse, but usually
determines whether the buyer is interested at
all. In the past, a popular sire meant a good
pedigree, but that’s not necessarily true now.
The bottom side of the pedigree can be even more
important than the sire side. Here are the ingredients
of a highly regarded pedigree in today’s market:
1.
The sire, proven as a performer and a producer
2. The dam, proven as a performer or producer,
or both
3. Families established as producing champions
in major events For the small breeder, acquiring
bloodstock that meet these criteria is formidable
and expensive. Some compromise is likely, unless
you have deep pockets. A reasonable compromise
might be to purchase a young mare that was not
shown for some reason but has siblings with good
records and a strong maternal family as well as
a popular sire.
Another
sensible compromise would involve breeding to
a young stallion whose get are too young to perform.
If the stallion proves himself, you can be on
the ground floor of his career and, often, at
a very reasonable breeding fee. The owner of a
young stallion just entering his breeding career
will naturally be anxious to get foals on the
ground and will often offer a discount to proven
mares.
The
“black type” pedigree system has long been a respected
tool in selecting and marketing racehorses. Today,
this system has spread to all segments of the
industry. A black-type pedigree definitely attracts
potential buyers, but attracting buyers is only
the first step. Don’t forget that the winning
information presented in black type should be
in a particular event.
However,
certain “crossovers” in bloodlines considered
desirable for an event are not only accepted,
but can add to a pedigree’s appeal. Proven cutting,
or “cow blood,” is a plus to reiner, cow horse,
roping and team penning buyers. Close Thoroughbred
ancestry is not only desirable in a race prospect,
but also for hunter events and barrel racers.
Proven pleasure families crossed on 17-plus-hand
Thoroughbreds appeal as prospects for all-around
horses and hunters. At auction barns, these are
outcross pedigrees rather than simply “tweeners.”
Conformation
Conformation - especially balance and structural
correctness - is critical in your horses. Remember
that your best prospective buyer will also be
your most knowledgeable. Legitimate prospects
for both competition and breeding must be properly
conformed, so expect your product to be rigorously
examined. Selection for a particular event will
cause variances in the emphasis placed on certain
conformational features. Reiners will pay careful
attention to sound feet and legs and demand low
hocks. Hunters will want more daylight under their
horses, but size alone won’t sell. The hunter
prospect will be especially evaluated for length
and slope of shoulder. As more buyers become aware
of the manner in which conformation dictates movement,
buyers in all disciplines will focus more on hindquarters
that are designed for impulsion along with free-moving
shoulders.
Beyond
functional conformation, it’s a lot easier to
sell a horse that is not only correct, but pretty
as well. In particular, a plain-headed horse must
be really outstanding in order to overcome a bad
first impression. Almost always, if you have to
sell yourself on buying a mare, you will have
to work even harder on selling her foals.
Color
It’s easy to get sidetracked from your
rational buying plan when color enters the picture.
If your telephone call begins with all the basic
qualities you need in a top mare and then ends
with “and she must be black with four white stockings
and a blaze” your chances of making the best buy
are slim.
Still,
that you are color conscious yourself means that
your market will be affected by color also. Since
about 80 percent of all Quarter Horses are registered
as sorrel or chestnut, a red horse’s color doesn’t
set it apart from the crowd. Still, color preferences
tend to be different in different events. In the
finals of one of the hunter under saddle futurities
at the 2000 All American Quarter Horse Congress,
only two of 16 horses in the finals were sorrel.
In other classes, especially individual performance
events, color does not seem to make much difference.
Red is a preferred color for many halter exhibitors
who feel that muscle definition is more visible
on sorrels and chestnuts. I like to offer color
variety in our foal crops so that buyers may suit
their own fancy. Regardless, you should never
sacrifice quality for color. In our own herd,
we have to be somewhat color conscious since our
senior stallion is a palomino. We can’t use palomino
or buckskin mares in his band without risking
raising unregisterable cremello foals. Further,
since we are keeping daughters of this stallion
for future broodmares we had to again be color
conscious in choosing a junior sire. We chose
a bay colt, who also met our standards for pedigree,
conformation and ability.
The
numbers game
Once your plan includes a specific goal
- for instance to produce reining and reined cow
horse prospects suitable for major futurities
and aged events - there are more decisions to
be made. The optimal size of your breeding operation
is one of the biggest decisions. Most breeding
operations get too big too soon.
Allowing
your horse numbers to build too quickly usually
results in a “welfare system” within the broodmare
band. Profits from productive mares must be used
to support the non-productive members of the herd.
Also, your time and resources are spread too thin.
Fewer horses can be better fed, better groomed,
better trained and, thus, made far more marketable.
Quality before quantity is always the best rule.
By investing whatever capital you have available
in fewer and better mares, your chances of success
will be greatly increased.
Culling
is the great divider between horse breeders and
horse multipliers. Regardless of how carefully
you select your breeding stock, some will fail.
If a mare produces a disappointing foal, a small
breeder often has the luxury of trying a cross
on another stallion. If this doesn’t work, it’s
almost always best to sell. A loss taken early
is usually the smallest loss. Mares that are difficult
breeders, hard keepers or poor mothers have to
be truly exceptional producers to justify the
extra care and expense they require. Finally,
mares with bad dispositions tend to pass that
along to their foals by genetics and by example.
Those individuals need a new zip code.
Do
I want to own a stallion? Whether or not to own
a stallion is one of the biggest decisions you
face in a small operation. Both the advantages
and disadvantages of stallion ownership can seem
compelling. If you have had bad experiences and
excessive costs with mares you have sent away
for breeding, you will certainly be tempted to
keep your mares at home. You have more control
by using your own stallion or purchasing shipped
semen. If you have 10 mares or fewer you probably
lack the facilities, expertise and help to properly
stand a stallion. Promotion is usually an even
bigger problem, and unless your stallion gains
name recognition and respect through advertising
and competition, his get will be hard to sell.
Although most breeders enjoy raising foals by
their own stallion, this is seldom the best course
to follow. If you choose shipped semen, be prepared
to pay for daily ultrasounds or send your mare
to a receiving station.
Remember
that purchasing a stallion service is far more
than merely the purchase of semen. A part of a
stallion’s name and reputation and a part of the
name and reputation of the stallion owner will
be attached to your foal. This can work to great
advantage for the small breeder. One marketing
tip is to breed to a stallion whose reputation
will bring results when you advertise in a classified
ad.
Advertising
When you get ready to sell your product,
decide how you’re going to let buyers know what
you have for sale. We try to make most of our
sales by private treaty. A high percentage of
the horses we sell are prospects - from weanlings
to 3-year-olds. Very few of our sales are to local
buyers, so advertising in national publications
is a necessity. Although we use several media
throughout the year, advertising monthly in The
Quarter Horse Journal gets the most results. A
few full-page, full-color display ads each year
build name recognition for our horses and our
farm. Relatively small black-and-white ads give
us the most calls on specific horses for sale.
Invariably, horses whose pictures appear in the
buyer’s guide ads get the most calls. We try to
never use a photo, however, unless it makes a
good impression of the true qualities of a particular
horse.
For
breeders whose market is very specific - such
as racing - ads in specialized publications usually
work best. Some magazines now offer special sections
for cutting, reining, cow horses and barrel racers
so that both news stories and ads for each sport
appear in their own section.
Where
well-read local horse newspapers are available,
take advantage of some low cost and potentially
effective ads. Here again, you need to target
your most likely prospective buyer. By keeping
records of actual sales, logging telephone calls,
video requests, etc. you can develop a “buyer
profile” for your own farm. One very effective
tool is to keep in touch with past buyers, using
direct mail and personal contact to make them
feel a part of your team.
One
of the least expensive means of reaching buyers
is through the use of handouts or brochures. Locally,
these can be distributed to feed and tack stores,
veterinary clinics, farm supply stores and local
shows. The same strategy can be used on a national
or regional level at conventions and major shows.
The image, even the paper, needs to say “quality.”
Sponsorships are another way to build name recognition.
Donated trophies for your county 4-H horse show
can help people remember your farm. The same idea
applies at a regional or national level.
Videos
If you work toward private sales, and your
market goes beyond adjoining counties, you will
have video requests. You might shudder, but these
requests can result in a lot more than aggravation
- like actual sales. Our experience in making
and sending videos has been a real education.
We have learned that every video request is important.
By accepting that only one in 20 videos will result
in a sale, we are no longer frustrated by those
that become part of someone’s video collection.
The one that works, and you will never know which
one, will more than pay for the rest.
A
good video is easy to watch, honest and relatively
short. A high percentage of the videos we receive
fail all three of these tests. Because most of
us watch TV, we are media conditioned. Our attention
span is short, especially for commercials. Edit
out the junk, but don’t edit out every mistake,
especially under saddle. For your babies, don’t
wait for a request. Look for a day with good light
and make a master tape of all of the foals for
sale. Give equal attention to the dams, and preview
the master tape yourself before you decide whether
or not it represents each horse to your satisfaction.
Then, since you have chosen to send videos, invest
in a VCR double deck player that allows you to
make your own copies from the master tape. By
phone, explain what footage you have, and invite
a visit to your farm if the buyer would like more.
If
you choose to respond to requests for videos,
send them promptly. A prompt response, even if
the video was volunteered, makes a statement.
That statement speaks for your farm, and says
that “we welcome your business.” Some of the recipients
will call back, even if it’s two years later.
The
horse auction
Auction sales represent an opportunity for
a fair wholesale price for your product. Select
sales, usually in a select market place, set records.
But beyond that, sales always represent a chance
to present your product before an audience of
potential buyers. The bonus is that you know when
you will receive a check.
The
first secret to selling a horse at auction is
in preparation. The second is placing the horse
in the right auction. The right auction usually
means that the sale is professionally conducted,
with first class advertising, facilities and ring
personnel. Behind the scenes, the sale must have
a quality reputation. But the sale you selected
for a particular horse should make your consignment
rank among the bigger fishes in the pond. Look
at past sale results, the specialty of the better
horses offered, the consignment and sales fees,
and move accordingly.
Once
you have taken a properly prepared horse to an
auction, be prepared to accept the results. There
are exceptions, but refusing the final bid is
seldom profitable. Delaying a “reality check”
usually results in an ultimate loss and a more
profound educational experience.
Follow
the plan
Once you’ve developed the plan for your equine
business, make sure you follow it. Your goals
might change as your operation grows, but don’t
forget to continually monitor and update your
business plan. You don’t want to have the fastest
selling stock one week, only to find out that
you’re next week’s dead dot com.
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