It seems that almost all yard owners have the same three problems: the weather (either there’s too much rain or not enough); liveries falling out with each other (and expecting us to sort it); and the ridiculously low price of livery meaning that 99% of yards operate on the basis of cashflow rather than profit. Obviously, any business advisor will say you should have a cushion of three month’s worth of operating expenses in the bank, and this is unquestionably sensible, but it’s not always possible, so for most of us cashflow is critical.
There’s nothing we can do about the first two problems, and the price of livery is only going to improve when so many yards have been forced to close that owners realise that expecting to pay £100 a month DIY with hay and straw is going to lead to their heart horse having nowhere to live. It’s odd how they are happy to pay the farrier, and the equine dentist, and for their instructor/equine massager/back lady/matchy-matchy sets and tubs of turmeric, but something as fundamental as stabling and grazing should be the cheapest of the cheap. Apparently, land is free, and stables and fences erect and maintain themselves…
So, while we’re stuck with the madness that is livery prices, we need to ensure that the little we pay ourselves is not further reduced by bad payers and bad debt.
Some yards are big enough businesses to use direct debits, but those are the exception rather than the rule. Options such as card payment facilities, online payments, or even PayPal can be used and can help to avoid the lame excuses.
Without direct debit, the majority of yard owners are reliant on liveries being honest and honourable – and solvent. In most businesses new clients are subject to some form of credit-checking; the run-of-the-mill equine industry doesn’t do it, but what we can do is use our contacts instead. Not to look at their bank accounts, but to find out what yards they’ve been on before, and if they left owing money. The horse world is incredibly small, so leverage your network to avoid inviting trouble onto your yard.
Livery is usually paid in advance, and the normal deposit is one month’s basic livery of whichever type they’re on. The theory is that if they don’t pay on time and you give them notice you’re about even. If they’re not on full livery, though, additional services are paid in arrears so the time- and energy-consuming services that make you question your life choices, like turning out in the rain, or holding a chestnut mare for the farrier, will be the work that you don’t get paid for. So never, ever let it mount up.
The most important thing we need to do to protect ourselves is to have contracts. Written, signed contracts, in place before the horse steps foot on the yard. And those contracts need to include a whole bunch of provisions about money – not just the monthly fee, but a deposit, and charges for additional services, and for breakages, and what will happen if they don’t pay. Make sure they include:
- a late payment penalty provision – and use it. It can be a fixed fee or a percentage of the bill, a single payment or a daily rate, but you need to say when it will apply from (so whether or not you give them a couple of days’ grace) and if the rate increases with each subsequent late payment;
- a clause that says that you can exercise a lien over their belongings – prevent them from taking tack or vehicles until they’ve paid, as a form of security;
- a provision that says that if you need to use solicitors you can recover your legal costs from them if they pay before you go to court;
- a lock-out provision, preventing access to your yard until the bill is paid, with the right to charge for full livery until the bill is paid and the horse collected;
- the right for you to have the horse removed, although this is problematic in practice, so it should be backed-up with provisions giving the circumstances in which you will declare it abandoned; and, as a last resort
- selling the horse and any equipment left behind under section 12 of the Torts (Interference with Goods Act) 1977 to cover your losses.
This is going to make your contracts look serious and quite heavy-duty. Good liveries will understand why and will never have to face these provisions. Bad liveries will either not come, not stay, or think twice about trying it.