There’s been a lot in the news recently about the pay cap on public sector workers, particularly firefighters after the recent Grenfell tragedy.
I’m not going to get involved with it as politics isn’t my strong point, but with the cost of basic living always rising it makes sense that wages have to follow the trend.
Which brings me onto equine businesses and changing prices. Business rates recently rocketed, hitting livery yards hardest. But unfortunately for them, you cannot raise livery prices in line with this because the rest of the country’s economy hasn’t changed in a similar fashion.
I always think that in order to raise your prices, be it livery, forage, lessons, facility hire, you need to be able to justify it. Take me, for example, now I have a higher teaching qualification I think I can justifiably increase lesson prices. If you are investing in new facilities or updating current ones then there is also room to increase fees.
Unfortunately there are a lot of hidden costs in the equine industry, which is why things are generally expensive. For me, hidden costs include petrol, insurance, PPE, website costs, professional development. For yards, hidden costs can include ongoing maintenance, insurance, business rates, staff wages, machinery maintenance. So when there’s a sharp increase in one of the hidden costs it can make clients feel that price hikes are unfair. But you can be honest, and without going into specifics, tell them that the reason you are having to put up your fees is, for example, because of the increase in your insurance premium. Or whatever the reason is. I think that when people know why they are being charged more they are more accepting of the situation. Which ultimately leads to happier clients and a more respected business.
I also think that if a price rise is imminent then it’s also worth checking that your standards haven’t slipped. You can’t justifiably increase your fees if you continue to be late to lessons, or if the standard of service is deteriorating. That’s when people will get unhappy and start grumbling. People need to feel that they get value for money, and if they feel that they currently get good value for money then they will be more accepting of increased fees.
I’ve been giving my prices a lot of thought recently, particularly with my ITT exam. They haven’t changed since I set up my business three years ago. Well, last year I increased my clipping fees to stay in line with others, and because I had a new pair of clippers. Which means I can do a better job.
But how do you go about changing price lists without disrupting your business? I always think client loyalty should be rewarded, and you have to balance out whether you are better keeping your prices the same and having a client have weekly lessons, or by putting your prices up and meaning that they then have fortnightly lessons. So long as you can fill that space then financially you haven’t lost out. But it’s a risk you take. Halving the number of lessons someone has is also detrimental to their education which may be catastrophic if they’re a nervous rider or on a green horse. So out of loyalty and respect for your clients it’s worth bearing that in mind. If you are a livery yard and put up prices then you risk owners doing favours for each other rather than using your services, which could affect your income.
There is also a question of how much to raise prices by. I always think there should be notice given to price changes of at least a month to allow families to budget. I also don’t think you should raise prices drastically, for example more than 10%. It’s a far softer blow to have two incremental price rises over three years than a large jump, which will upset the apple cart and risk the stability of your business. Plus, you don’t want to look greedy!
Equestrianism is already seen as elitist, so making yourself unavoidable to the amateur rider only does a disservice to the sport.
I think it’s also worth considering just changing the prices of one area of the business. So if facilities have changed, or equipment improved then you could justifiably increase prices for that area. Going back to my ITT exam; a higher teaching qualification could mean I’m better off just increasing lesson prices, and leaving schooling fees as they are. Which would only affect a portion of my business, meaning it’s probably more affordable for clients and less of a business risk to me. As a livery yard, if you have invested in new jumps or a cross country field then you could justifiably increase hire fees.
There’s lots of different elements to consider, and various ways to make the pill easier to swallow. I’ve altered my price list on my website for new clients, but am not changing current client prices at the moment. I do think all businesses should think carefully about the ways and means of changing fees. Which have to change as inflation, wages and living costs rise, but it should be done sensitively so that the business carries on running smoothly and clients continue to be satisfied with the quality of service they receive.