Over the next few weeks, we’ll be recounting the issues that influenced Summerhill’s ascent to the National Breeder’s Championship, and what roles they contributed to the process. Some background might be of value here.
While horses have been in the blood of most of us ever since we can remember, the realities of running a commercial stud farm were so far removed from any other business experience we’d known, our venture into stud farming was like entering kindergarten for the first time. It was 1979, and a chance visit to Summerhill to see a yearling filly we’d just purchased at the National Sales was at the root of it. It was tough in those days to make a living out of horse breeding, partly because there was just not enough money in the game, and partly because very few people had any understanding of what it took to turn the breeding of racehorses into a successful business model.
Summerhill was a victim of both of these things, and was losing money, and I was asked to intervene, at both a legal level and with ideas on a turnaround strategy. The first part was easy, the second was a venture into the unknown. It was obvious it needed fresh money, a capital injection of substantial proportions, yet that on its own would be frittered away without a sustainable plan to reinvent the business. That Summerhill exists today as a thriving business tells us we found something on which to found a viable business, but that was for the short-term.
We’ve been here 30 years now (precisely, this year) and for 12-15 of them, we laboured along in the hope that one day we’d see the “big hit”. Not long after we opened the “new” gates, we struck gold, with the advent of the great stallion Northern Guest, but once he’d come and gone, we were floundering for the next bright idea. This is quite typical of so many horse farms, where reliance on the belief that the elusive needle in a haystack might just turn up for you one day, seems to epitomise business models. Rich people might achieve this by simply going out and buying the genetic giant which turns the whole show around, but even then, it’s still a lottery.
To say that after 15 years, we were disenchanted with our results is putting it at its lowest level, and while we were still eking out a modest living, the results were not what we intended when we set out. So we started to examine the models around us, and those of the more successful farms abroad. Our own results were sluggish, and we were looking for ways to extract ourselves from the malaise of ordinary returns and results. What we found was interesting. Most farms were run by a horseman, which is perhaps not so strange, because banks are run by bankers, legal practices by lawyers etc, and whether they were owner-run or horseman-managed (whilst owned by someone with other interests), the structural models were pretty much the same.
In the agricultural context, this is also not so strange, because cattle farms are usually run by a stockman, crop farms by croppers etc, but there is one strong distinguishing feature between the horse farm and most other agricultural activities. This rests with the market, and the customer base it serves. In just about every other farming endeavour, the product goes to a mass consumer population, while the thoroughbred is an item of luxury, it belongs in an extraordinarily sophisticated environment, and appeals to a relatively narrow group.
Besides, like no other business, horse breeding is riddled with myths and old wives’ tales, concocted over the decades by people whose achievements would appear less of a spectacle were it not for their aggrandisement in the eyes of people who’d know no better.
Reality is, ours is a fairly straightforward endeavour, simplified by the truths that flow from a closer understanding of the ways of Mother Nature.
The skills sets needed for the management of a successful commercial racehorse farming business are so far removed from those of a normal breeding operation, as to be of an entirely different species. While they may include some of the same, there are a number of broadly diverse dimensions to the skills needed for horse farming, and for which you need to search for these in earnest. We did.
The next episode will follow over the next few weeks.