Money in the Warm Months

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The formula for profitability seems so simple: make more than you spend. The truth is, the path to reaching that goal is not always clear. Here are some lessons on summer programs learned from managers who have been there, done that.

Return on Investment

Diligent planning is the best approach to developing a summer camp. Jill Humphrey of Leone Equestrians in Sacramento, Calif., speaks from experience when she advises, “The key is to commit early and do the necessary planning.”

First, take a look at the effort summer camp will take. Start by listing what you assume the tasks will be, then determine solutions to each that will lead to profitability for your business. These assumptions should be guided by whatever it is that has motivated you to run the camp in the first place. They will also help to clarify your own expectations for camp and what it will do for your business.

For example, Humphrey assumed that camp participants would come from a wide audience, so she expected participants with a range of ages and skills. Consequently, format and pricing for her camp had to be considered carefully.

The Leone Equestrians camp begins in late June, shortly after schools are out for the summer. It wraps up the last of four week-long sessions in mid-July, when the heat begins to squelch outdoor activity. Each day is divided into age-appropriate durations and filled with both riding and other activities.

Pricing is driven by the amount of time the participants will be under the camp’s care, and also by the cost to the business of the participants’ overall camp experience. When you have a clear understanding of the expenses, a breakeven analysis will show exactly how many participants you will need to make the camp profitable at different fee rates. It might help to devise multiple scenarios that you can manipulate to end with your goals accomplished.

Using Your Resources Wisely

Sticking with the analogy of a business-within-a-business, an equestrian camp will have fixed and variable costs, just like your full-time business. Once you commit to holding the camp and put the wheels in motion, you will have fixed expenses that will be incurred whether your camp is attended by three riders or thirty. While most fixed costs are regarded as simply a cost of doing business, some creativity and careful planning can lead to a positive return on your investment.

You have more control over your variable expenses—those that are affected by the number of participants who attend the camp. Some variable expenses that you can control can include the type and quality of rewards (ribbons, lesson discounts, or tack) and materials for the additional activities that you offer when participants are not riding.

Creativity pays off for the business-minded here, too. Knowing that labor and overhead are two of the most significant expenses for most businesses, Humphrey suggests leveraging human resources according to their strengths. Only qualified professional riding instructors lead the mounted hours of her camp day. To avoid underutilizing the instructors’ precious (and expensive) time, however, Humphrey recruits experienced client riders of sufficient age and responsibility to lead the more junior participants in arts and crafts, scavenger hunts, grooming, and horse maintenance exercises. “Their enthusiasm for horses is infectious, and they develop self-confidence by leading others,” says Humphrey.

Opportunity Costs

To be sure that your camp is truly a profitable venture, consider what impact the camp will have on the rest of your business. Every hour of attention you dedicate to the camp is an hour you are not paying attention to your full-time business. The same applies to your staff and your physical resources. A camp can only be considered profitable if resources used for the project generate more revenue than would otherwise be earned by those resources.

What follows are some questions and comments intended to stimulate thought regarding effective use of resources and the impact that your proposed summer camp will have on the rest of your business.

Pricing

• If you allow camp participants to use your school horses, does the camp fee more than offset the income you will not receive by using those horses in lessons? If not, you could limit participation to riders who have their own horses. Or, you could charge an additional fee for the use of the horse during the camp.

• Would the total price tag for such a scenario make the camp prohibitive to too many participants?

• Could you lease horses and/or tack at a price point that would allow you to attract additional camp participants and remain profitable?

• Could you increase the overall profitability of your camp by bringing in additional horses?

Staff

• Will they be able to effectively accomplish their responsibilities outside of the camp?

• Will the time they spend on camp activities earn at least as much for your business as they would earn on routine business?

Some potential solutions may be to hire additional temporary staff just for the camp. Recall Jill Humphrey’s suggestion to use experienced client riders, as mentioned earlier.

Regular Clients

• Consider the arena space itself, particularly if your facility has limited arena space.

• Is your lesson schedule so busy —or is your camp so popular—that regular clients will be displaced by the camp’s activities?

The bottom line is that the additional costs associated with running the camp should not outweigh the benefits—with one exception. If the under­­lying goal of your camp is to attract new clients, it may be acceptable to operate the camp at a lower profit—or loss. Managing that scenario requires a keen sense of the market, and confidence in your assumptions.

There is no master template that shows what numbers need to happen for an equestrian camp to be profitable. But with planning, the picture should become clear in no time.