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 Post subject: Co-op
PostPosted: Wed Sep 22, 2010 8:44 am 
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Re: Coop

I believe the best model for the co-op approach would be to have it run by a co-op racing manager. That person does all the paperwork, billing etc. They would then hire a trainer to train at a set salary. I believe splitting the administrative and the horsecare is the key. There are existing models for this around the world. The big outfits have these people in place in their operations. For an owner to deal with a trainer directly is something I've identified as a significant barrier to entry for new owners. Ideally, you should be able to get your horse trained for true cost. Bonus for performance.
I've been getting the wheels in motion to do something like this in Ontario, so drop me a PM if your interested in getting involved particularly if you are a breeder looking to get your homebreds to the track.
Ideally, a no-nonsense credit card on file for monthly payments is a good work around for deadbeats. Miss a payment, you're gone. A trainer trying to eak out a living will live with delinquent payments in desperation. I'd want to remove that burden. On the other hand, one would expect a trainer that can train, not just do what all the other trainers are doing. The trainer needs to get the most out of his/her stock and not break them down.
I believe a scenario like this is a good balance for allowing breeders to get their stock to the track without getting in too deep, and I believe of utmost importance is a good working relationship with the racing manager to identify performance potential and properly cull horses which will not perform. (The best way to save money in the long run is to not waste it on horses with demonstrated limitations)

My two cents.


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 Post subject: Re: Co-op
PostPosted: Wed Sep 22, 2010 12:32 pm 
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Gallop58 wrote:
Re: Coop

I believe the best model for the co-op approach would be to have it run by a co-op racing manager. That person does all the paperwork, billing etc. They would then hire a trainer to train at a set salary. I believe splitting the administrative and the horsecare is the key. There are existing models for this around the world. The big outfits have these people in place in their operations. For an owner to deal with a trainer directly is something I've identified as a significant barrier to entry for new owners. Ideally, you should be able to get your horse trained for true cost. Bonus for performance.
I've been getting the wheels in motion to do something like this in Ontario, so drop me a PM if your interested in getting involved particularly if you are a breeder looking to get your homebreds to the track.
Ideally, a no-nonsense credit card on file for monthly payments is a good work around for deadbeats. Miss a payment, you're gone. A trainer trying to eak out a living will live with delinquent payments in desperation. I'd want to remove that burden. On the other hand, one would expect a trainer that can train, not just do what all the other trainers are doing. The trainer needs to get the most out of his/her stock and not break them down.
I believe a scenario like this is a good balance for allowing breeders to get their stock to the track without getting in too deep, and I believe of utmost importance is a good working relationship with the racing manager to identify performance potential and properly cull horses which will not perform. (The best way to save money in the long run is to not waste it on horses with demonstrated limitations)

My two cents.


I do like your scenario for bringing new owners to the track and if you're suggesting that the racing manager could help the breeder/owner of a hard-knocking racehorse find partners & take care of the admin. work while the trainer trains & the breeder breeds & raises the next horses for the partnership, it is a very interesting idea, assuming the breeder is looking for partners. And I wish you well, but that really sounds more like a partnership or a large racing operation need than a small co-op. So I'm not really seeing the value of a racing manager in the circumstances we were discussing previously (people who are trying to breed hard-knocking racehorses & get them to the track in a regional market).

As an owner/breeder who sees the actual costs & my horse's performance, I can certainly judge for myself when I'm not making money. And there's also the trainer to tell me, if I somehow manage to miss it.


But in a small co-op aimed at breeders being owners at a cost-effective price, the trainer should be communicating directly with each of the owners in the co-op (especially if he thinks they've bred on who isn't going to make it at the track).

I wholeheartedly agreed with the administrative responsibilities belonging to someone other than the trainer. I can see how as an owner coming into the game, the communication (or lack thereof) from the trainer might be a detriment. But as the breeder/owner, part of what I should get out of the co-op membership is direct communication from the trainer.

By the way - many breeding farm owners can attest from sad experience over the past several years that having someone's credit card on file doesn't really save you from non-payment if the credit card's owner falls on hard times. The bills stop being paid, the credit card company stops honoring the card & you are left with a horse which may or may not have value (might have been abandoned as soon as you told the owner it should be culled), but which definitely needs to be fed.


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PostPosted: Wed Sep 22, 2010 2:35 pm 
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Hi KB,
From a trainer's standpoint, this type of setup is similar to an owner that keeps a 10+ string of horses on the grounds and hires a private trainer.....paying all the bills and salaries, covering all racing expenses, insurance's etc., seeking to get to a lower bottom line cost to keep and train the horse on track. As the trainer, this is a win, win situation. The trainer has no expenditures, recieves a salary and isn't responsible to come up with that weekly nut to keep the business afloat. Some of the smaller trainers that are winning at a decent percentage has much of this covered between his assitant, accountant and secretary. The trainers that aren't as lucky have a big burden on their shoulders to make that weekly nut.....this doesn't mean they can't train, they just don't have the stock or clientel to be able to cull those that aren't earning and move up to a better model:>) If all these financial responsibility's were lifted and put on the hands of the owner's most any trainer would count themself lucky to get into such a position. The only shift has been all the financial responsibility, which was always the trainer's obligation now falls on the owner's and breeder's of the co-op. I wonder if the savings will be all that much to afford you what you are looking to do (lower the botton line). The truth is, the trainer's have a hard time paying the salary's and bills, would it be any easier for you......with the added financial responsibility the co-op takes on, will the savings (if any) be worth the effort and increased financial responsibility? TJ


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PostPosted: Wed Sep 22, 2010 6:16 pm 
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Exactly - a private trainer scenario, but with multiple owners.

And the questions in my head were (1) (exactly the question you posed) Would we really save any money this way? and (2) Would we find a trainer who would work with US, a group of breeder/owners with our own ideas of how our horses should run?

Thanks for talking through this -- several breeders local to me (think of Penn Nat'l as our home track) have expressed interest. And I've got a couple trainers in mind, although I also think there are several more I should consider - but haven't yet met. So with this discussion about hard-knocking horses & co-ops & sending our own babies to the track, we are slowly moving forward . . .


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PostPosted: Wed Sep 22, 2010 6:37 pm 
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KB Equine,

Have you come up with any numbers regarding this idea? Like the costs to the breeder/owner per month.

winds

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 Post subject:
PostPosted: Wed Sep 22, 2010 7:35 pm 
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winds wrote:
KB Equine,

Have you come up with any numbers regarding this idea? Like the costs to the breeder/owner per month.

winds


Nope - purely hypothetical, so far. But interesting to consider, isn't it?


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PostPosted: Wed Sep 22, 2010 8:14 pm 
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You 'guys' are on an interesting tack. I think of there were something concrete set up (business plan - legals, etc.) there would be some initial interest, probably a few mistakes made, and possibly something new and workable down the road.

Would there be interest in getting other investors/partners involved? If so, if there were a solid business plan where 'Knock hard stable' had some numbers to back the hypotheticals (wishes and dreams) you would also be in a stronger position when the tax man comes and you have to defend tax losses. The goal - of course - is a profit!

jm

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 Post subject:
PostPosted: Wed Sep 22, 2010 8:42 pm 
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TJ, your explanation/model makes the most sense in my opinion, and sounds as though it would be the most likely set up to succeed.
Here is where I found things broke down in the set up I had. The owner footed the bills for everything, but also since she was paying, decided which farrier, rider, vet worked on the horses, what feed was fed etc. I had to constantly hound her to get more feed, and it was often poor quality hay, and not the best grain due to cost cutting. I had issues getting the farrier when needed, and often couldn't findthe chosen rider. I was paid $20/day to do stalls, tack, walk, groom, set feeds and coordinate, and I held my own workers comp. I tried to help her cut costs, but in the end it cost her more to do it the way we did, and her horses didn't do well either.

The flatrated fee I charged was essentially a day rate, except the owner paid a flat rate/month and I had to make everything neccesary fit into it, as opposed to a day rate and then the owner paying for things like vet, farrier, lasix, meds etc on top of their day rate. I didn't have staff as I only had 5-6 horses in my care, so I wasn't paying out of pocket for work. I had a higher cut of moneys earned as compensation and there were some weeks I made a bit of money, some I lost, but mostly I was about even. She stayed right out of everything and let me do my thing the way I wanted, but she always knew what to expect on her bills.

Quote:
In my hypothetical co-op, we'd probably have 10 stalls either at a farm & would ship to the track, or at a training center - or at the track itself, track management willing. But at the farm works better in my mind for letting the trainer focus on training & not management & billing. (Unless, of course, I'm missing something, which is SO possible!)

The farm owner would order the feed, grain, etc., and apportion costs among the co-op members & the farm would supply grooms & hot-walkers, perhaps of their own staff or the trainer's choosing. The trainer would pick the exercise rider he or she wanted to work with, but the farm would pay. The trainer would keep the record of which horse got what, but the farm would do the billing, so the trainer didn't have to deal with that part.

I don't see the farm scenario laid out in that way being successful. Not many farms will take on a co-op simply due to their overhead costs of running the place. The co-op only pays monthly for what they use, but the farm carries all the overhead of bringing in the feed, bedding, paying wages of grooms, hotwalkers, stall cleaners etc, repairs, removal of manure so you can bill the co-op post use. Most farms that take co-ops still charge board but at ta lesser rate and the co-op deals with everything else.
I think, as a trainer, you could make a co-op work with the right personalities and dedication...but you would need a very set definition of co-op "rules" pertaining to what gets fed, what riders you use etc. And I think if you had more then a couple horses, a co-op manager would be an absolute must have or a trainer would go nuts! I'd be really interested if anyone can actually get this out of idea stage and into a working proposition. It's a really great idea, but I think there would be a ton of obsticles to ovecome to make it work well for all parties.

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 Post subject:
PostPosted: Thu Sep 23, 2010 3:58 am 
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KBEquine wrote:
winds wrote:
KB Equine,

Have you come up with any numbers regarding this idea? Like the costs to the breeder/owner per month.

winds


Nope - purely hypothetical, so far. But interesting to consider, isn't it?


I find it very interesting. If I thought something like this might be in the works I would have tried to run my filly instead of selling her at Timonium.

winds

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 Post subject:
PostPosted: Thu Sep 23, 2010 6:20 am 
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This is just the talking stage - I would imagine if we ever move forward & get this up-and-running, there will be members joining & leaving, so when you've got one you want to run, maybe we'll have worked out the kinks & have an opening.


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PostPosted: Thu Sep 23, 2010 6:36 am 
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Shannon wrote:
TJ, your explanation/model makes the most sense in my opinion, and sounds as though it would be the most likely set up to succeed.
Here is where I found things broke down in the set up I had. The owner footed the bills for everything, but also since she was paying, decided which farrier, rider, vet worked on the horses, what feed was fed etc. I had to constantly hound her to get more feed, and it was often poor quality hay, and not the best grain due to cost cutting. I had issues getting the farrier when needed, and often couldn't findthe chosen rider. I was paid $20/day to do stalls, tack, walk, groom, set feeds and coordinate, and I held my own workers comp. I tried to help her cut costs, but in the end it cost her more to do it the way we did, and her horses didn't do well either.

The flatrated fee I charged was essentially a day rate, except the owner paid a flat rate/month and I had to make everything neccesary fit into it, as opposed to a day rate and then the owner paying for things like vet, farrier, lasix, meds etc on top of their day rate. I didn't have staff as I only had 5-6 horses in my care, so I wasn't paying out of pocket for work. I had a higher cut of moneys earned as compensation and there were some weeks I made a bit of money, some I lost, but mostly I was about even. She stayed right out of everything and let me do my thing the way I wanted, but she always knew what to expect on her bills.

Quote:
In my hypothetical co-op, we'd probably have 10 stalls either at a farm & would ship to the track, or at a training center - or at the track itself, track management willing. But at the farm works better in my mind for letting the trainer focus on training & not management & billing. (Unless, of course, I'm missing something, which is SO possible!)

The farm owner would order the feed, grain, etc., and apportion costs among the co-op members & the farm would supply grooms & hot-walkers, perhaps of their own staff or the trainer's choosing. The trainer would pick the exercise rider he or she wanted to work with, but the farm would pay. The trainer would keep the record of which horse got what, but the farm would do the billing, so the trainer didn't have to deal with that part.

I don't see the farm scenario laid out in that way being successful. Not many farms will take on a co-op simply due to their overhead costs of running the place. The co-op only pays monthly for what they use, but the farm carries all the overhead of bringing in the feed, bedding, paying wages of grooms, hotwalkers, stall cleaners etc, repairs, removal of manure so you can bill the co-op post use. Most farms that take co-ops still charge board but at ta lesser rate and the co-op deals with everything else.
I think, as a trainer, you could make a co-op work with the right personalities and dedication...but you would need a very set definition of co-op "rules" pertaining to what gets fed, what riders you use etc. And I think if you had more then a couple horses, a co-op manager would be an absolute must have or a trainer would go nuts! I'd be really interested if anyone can actually get this out of idea stage and into a working proposition. It's a really great idea, but I think there would be a ton of obsticles to ovecome to make it work well for all parties.


Hi Shannon, KB,
You sound like a dedicated hard working woman, the type that would probably help a co-op type situation...especially since you've had a taste of what not to do. In the deal/case you cited it sounds to me like your owner wanted to be the trainer and just used your license to do things her way. I've been doing this a long time and in most cases only one person can train, feed and care for a horse, that's the person that's with the horse 24/7 on their hands and knees checking every inch of him daily, clocking his first steps out of the stall, observing the training and how well the horse handles it, how he pulls up on the track, how he feels coming off the track, how the horse cools out, how much he drinks, his attitude at feed time, does he clean his tub, etc. This is the only person that can safely dictate what a horse should be doing on a daily basis while considering that horses attitude when it comes his time to go out. You can write up a tentative schedule, but that doesn't mean the horse can make it happen......it changes on a daily basis. If the owner's/breeder's of a co-op arrangement want to be involved on a daily basis, then decisions made together could possibly work as long as they are there with you when that horse steps out of the stall....knowledgeable horseman/woman usually see the same thing. I know personally I've never been able to share one horse's training schedule with another person.....when I train a horse they are all treated as individuals and each one is trained differently. It may sound weird, but I get to the point I know how that horse will feel on a daily basis and get to know what he needs each day to move him forward surely and safely and most importantly soundly. Now, that's just me....I'm sure there are other's out there that are willing to bend....but you really don't want one that is willing to bend to far as it usually is a signal this trainer is either not that knowledgeable or burnt out and will go along for the ride....possible at the expense of the horse. The horse always comes first, no matter what the consequences are to you....always do what's best for the horse. Some of my friends in NY would get a kick out of hearing I just fired my owners again:>) A couple of them ended up in the big league too, but might I add they didn't deserve it.
Even in a co-op situation, the trainer needs to set up the feed program.....once it's set up it's usually no big deal placing an order.....just peek in the feed room make the order and bill the owner's....gotta say that does sound good:>) Like on Letterman.....The number 1 reason why a co-op situation like this could work (bill the owner:>).....but it may be more in favor of the trainer than the owner's and breeder's. The hay, bedding and feed rise and fall according to the purse structure and currently where you are KB.....Penn National's purses are pretty good. The first thing you have to find out/do is secure good hay, feed and bedding at a reasonable price....I think that's the most important issue in saving money....possibly buying trailer loads of hay, palettes of bagged shavings or decent loose shavings, bulk grain etc., could save the co-op enough money to make it work financially better than it does on the track. Decent places for the help to live could cut back on weekly salaries...a good exercise rider could save you some money if he's willing to live on the farm and take a weekly salary instead of by the head. Of course, the worker's comp insurance which needs to be on file in the trainer's name at the track the horses run....and anything else that you need for the barn that is used daily....find the best prices and buy in bulk. TJ


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PostPosted: Thu Sep 23, 2010 7:01 am 
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TJ, I agree with buy bulk and save, but in a co-op, who pays for the bulk? If you disperse among the owners in your co-op and osmeone leaves, how do you reimburse that owner? I really like the co-op idea, and it is something I'd really love to be part of somewhere. I'd really like to hear if anyone can make this work for them.

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PostPosted: Thu Sep 23, 2010 7:59 am 
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Shannon wrote:
TJ, I agree with buy bulk and save, but in a co-op, who pays for the bulk? If you disperse among the owners in your co-op and osmeone leaves, how do you reimburse that owner? I really like the co-op idea, and it is something I'd really love to be part of somewhere. I'd really like to hear if anyone can make this work for them.


Hi Shannon,
That's the beauty of this thing for the trainer.....all that stuff is determined by the co-op's rules. They buy the stuff, they are responsible for reimbursements. It's a great deal for a trainer (clear head) but can be just as beneficial to the co-op if they hired a competent trainer. The possibilities are endless and good for both the owner/breeder (member's) and trainer....horses can be readied and culled if need be to various sales according to ability or sold privately right where they are. Of course, you couldn't just sell all the bad ones.....you'd have to sell some good ones to....just go in at a higher reserve. The members have their choice as to what they prefer to do with their horse after getting a good idea of the horses ability and soundness to withstand training and racing. TJ


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PostPosted: Thu Sep 23, 2010 8:09 am 
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http://www.thesportjournal.org/article/ ... orseracing

According to this blog, the trainer is better off owning the horse if he/she has a small stable.

http://holyracehorse.blogspot.com/2009/ ... ining.html

http://www.racehorsetrainers.com/dayrates.htm

This is a very interesting thread. It reminds me of the risks Charlie Whittingham took with a number of his great horses when he took a considerable share of the ownership. In the case of Sunday Silence and his agreement of Arthur Hancock, I believe he even sold half of his share so he immediatedly made a profit.


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PostPosted: Thu Sep 23, 2010 8:09 am 
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I would think that, with declining foal numbers, the supply-demand teeter totter is moving significantly toward the breeder/owner. Because demand for bulk items falls when the numbers fall, the price should fall. Buying in bulk can reduce hay prices significantly (you guys in Pa can get good stuff from the mountain meadows by the truckload for a great price)

I go back to one weak link in the chain though - the 'cheap claiming race'. The system militates against LONG TERM investing much of anything into an animal (breed/board/leg up/train) if it can only run in a condition where the horse can be snatched for $5k or less. It simply makes no sense to invest and pushes everyone to get the 'big horse', and people get slaughtered financially trying.

Harness racing has a system of lower priced conditioned races. Owners can place and run their charges in these, and possibly make a buck slowly, rather than lose a $25k investment in the racing office after the race in the blink of an eye.

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