V. Horse Related Businesses

The main objectives of the horse-related business survey were to obtain information on the types of horse-related businesses in Connecticut, ownership profile, and economic characteristics - such as assets, number of employees, annual revenues and annual expenses. The survey was pre-tested. A total of 550 business surveys were mailed out and 77 (14%) were received back.

The major categories of activities carried out by these businesses are boarding of horses (25%), providing training and lessons (17%), and breeding (16%). Also, in many cases, a business carries out multiple activities. Most businesses are owner operated (89%) and horse facilities also tend to be owned (83%) rather then rented. The average industry experience of the owner is 22.8 years, but there is considerable variation in this regard (as reflected in the standard deviation of 14.61). The average business employs 1.6 full-time and 2.88 part-time employees (each of whom works an average of 6.5 hours/week). This translates into an average of 2.068 full-time equivalent (FTE) employees.

The average number of horses kept (or used) in a business is 16.7, but only 9.08 are owned by the business itself. Mixed breeds, Quarter Horses, and Thoroughbreds account for 52% of these horses. The average market value of total horses owned by a business is $58,536. Information was also obtained for related business assets, like land, buildings and equipment, as of December 31, 2002. As one might expect, land and buildings are, on average, the most valuable assets. Finally, business owners were asked to provide data related to revenues and expenses. The results obtained are summarized in Tables 5-1 and 5-2. Average estimates for each category of revenue and expense are reported.

Based on the above data, one could simply take the difference between average total revenues and average total expenses (i.e., $45,920) to be the average profits of a business, but this would not be right as in several instances businesses provided data for only revenues (or only expenses). The more correct approach would be to calculate profits of each business from the raw data (when profits can be meaningfully calculated) and then compute an average. With this latter approach, the estimate we get for annual profits is $70,840 per business.