Business Plan for Thoroughbred Breeding Operations
We are the #1 CPA firm in the thoroughbred industry with over 400 clients.
We have personal experience in breeding because we personally own 25-30 mares per year and have been in the thoroughbred industry for over 40 years.
We have had considerable success and our offspring have been named champions, as well as winning at least 100 stake races.
When you breed a horse, even if you sell it, you are eligible to receive Breeder’s Awards.
Here are some of the basic elements in our strategy which then translates into a successful business plan.
Steps to Follow
1.) Decide which market you are breeding for; to sell or race the offspring. If you breed to sell, you would breed to stallions whose foals have the highest resale value.
2.) Decide how much of a calculated risk taker you are and “how patient you are” before you achieve your goals. The age of the mare and its produce record becomes a major factor.
3.) Decide on a yearly budget as to how much you will pay to acquire the mares and how much you will spend on stud fees. A good rule to follow is to spend half the amount of the cost of the mare on stud fees.
4.) Do not “fall in love with your mares.” If the produce are not correct or the mare is not producing, be prepared to cut your losses.
5.) Alternatively, if you produced a stakes winner, continue to upgrade the stallions. Go back and breed to that sire or to similarly bred but more proven and expensive sire.
6.) Surround yourself with a qualified team.
7.) Some of the tools we use are:
A. Using Nicks or patterns that have statistically produced the best results.
B. Utilizing the characteristics of a particular stallion to reinforce the mare’s characteristics (speed to speed, speed to stallion, grass to grass).
C. Going to proven sires with great produce records.
D. Going to first or second year stallions whose name is still popular with buyers because the memory of their record on the track is still very popular. American Pharaoh stud fee starts at $200,000 because the buyer of an offspring to breed him believe the foals will sell for more than $200,000 because the name American Pharaoh is still well recognized.
You should treat your breeding program as if it was a mutual fund.
In other words, treat your mares as factories, the foals as inventory and be willing to sell some of them or use them in your racing program.
Caveat: You’re dealing with living animals and they are unpredictable, they are very valuable but they are also expensive to keep. Think with your head, not your heart.