Spending any time in the riding instructor community, a common question from new instructors comes up about fairness of payment for teaching lessons. A common refrain is often expressed in response to these questions: the 1/3 split or the Rule of Thirds. An easy calculation for anyone to do, let’s explore what this looks like, the efficacy of this structure, and when to put it into practice. 

What is the 1/3 Split, or Rule of Thirds?

In a nutshell, 1/3 of the cost of a lesson is given to the instructor, 1/3 is given to the care of the horse, and 1/3 is given to the facility. 

So, if a lesson is $60 (for ease of calculation) then $20 would be given to the instructor for teaching, $20 would be given to the owner of the horse for it’s care, and $20 would go to the facility where the lesson is being hosted for maintenance. 

For me, when I was teaching lessons, I taught at our home facility on my own lesson horses, so 100% went into my pocket. Under the above model, if I had advertised locally for an instructor I would have done so at a price point of $20/hour.

What about if you teach semi-private and group lessons?

Under the above, the instructor gets $40 for semi-private lessons - which I charged out at the same rate per person as private lessons. If you have a payroll, you can look at your overall lesson structure and split the difference - say $25-$30/hr depending on if you typically have more private semi-private, or group lessons scheduled in a standard week. 

This is a great and simple calculation for most equine industry professionals, let’s look at what it actually means today and what the impact would be for the players in your business. It may or may not work for you.

1/3 to the Instructor

Whether you make this by teaching yourself or you outsource teaching to another instructor, make sure this amount is truly a decent working salary for you or your employee(s). Consider your geographic location, what you need to make to maintain your cost of living, and the amount of time you spend working at the barn in general. Meaning, if you’re at the barn for 10 hours (like so many of us are) but only teaching 4-5 hours, make sure the paid portion of your day brings in enough income to pay for your unpaid hours, too. This may look like lesson/training planning or managing the administrative side of your business. Be sure to split up and consider regular business costs here, too. Do you incur a fee when taking payments via apps like PayPal or Venmo? Better ensure it’s covered so it doesn’t eat into your ability to pay for your own cost of living. That is a quick way to burnout for you and your horses as you work even more to make up the difference. Note, I didn’t include taking care of the horses (feeding, cleaning stalls, etc.) in this time because that comes into play with the 1/3 going to the care of the horse.

1/3 to the Care of the Horse

Take a moment to jot down all of the expenses that come with caring for your lesson horses, if you have them. Hay, supplements, board, vet bills, farrier, cleaning stalls (either your time or via paid help if not covered through board), any extras - bodywork, chiropractor, etc. If you add all of these up for a standard month and then divide that number by the number of times you use that horse for a lesson in a month, what do you get? Is that horse used in an hour lesson? 1/3 of your lesson price needs to cover all of the expenses associated with keeping your horse alive, well, and able to perform at their best in your lesson program.

With the increase in hay and gas bills (and everything else, it seems), I recommending doing this calculation every so often to ensure your prices are still where they need to be and you’re not having to pull these expenses from other buckets. Doing so can quickly lead to additional stress as you try to manage your living expenses on less or the facility falls behind on maintenance. If you don’t teach on lesson horses you may not have this expense, but if you’re using a boarder’s horse for lessons this would look like a “horse use fee."

1/3 to the Facility

It is not uncommon for facilities to charge trainers and instructors a flat or per person rate to use the arena and facilities. That would be this 1/3 of your lesson price. If you own your own facility, it will come to you instead but it’s no less important. This covers things like repairs and improvements around the farm, maintenance (for stalls/pastures/arenas/equipment), and utilities to keep the doors open (gas, electricity, water). If you have your own facility, take a few minutes to jot down what these expenses look like for you over the course of a year (to ensure you're considering maintenance and other annual expenses) - then divide it by month or week and how many lessons / students you teach in that time. Are you able to cover your costs via this 1/3 or do you need to make adjustments? If you are hoping to improve upon your facility it would need to come out of this bucket, too - things like the cost of installing or paying off a covered arena, for example. 

Do you have a tuition or bulk purchase payment option in your lesson plan? I’m guessing it’s discounted. The costs above should factor into your discounted rate, not your “standard rate”. You will still have to incur the costs one way or the other, so make sure you can. As I see it, your standard rate includes a bump due to the inconvenience and added time of coordinating and tracking individual lessons, the added fees from having to process multiple payments, etc.  

My trainer friends, even though you likely don’t own the horses you are training, you can still use this basic model to determine your own fees. It may just look more like a monthly fee than a per lesson fee. While a horse is in training with you, you’re likely taking care of all of the above horse care costs. Make sure those costs, your time for training, and care of your facility are all factored into your monthly training fees.

Barn owners and managers, you may only be directly impacted by the 1/3 to the Facility section. Consider working with your trainer(s) and instructor(s) to ensure everyone is receiving their fair piece of the pie, so to speak. Costs and resources can change and vary wildly in our industry, impacting different buckets more one year than the next. This should be a somewhat ongoing or evolving conversation to ensure that lesson program(s), training program(s), horse care, and facility maintenance are all working in harmony to create the farm or ranch atmosphere you are striving for. I recommend doing an analysis of these costs at least once a year with the impacted industry professionals to ensure all are on the same page and fees for customers don’t vary dramatically on a regular basis. 

Doing the calculations on your business, how are you feeling? Need to adjust your overall lesson or training rates but you’re not sure how to go about it? Need to consider a different split based on the makeup of your business and program? Want a little help figuring it out? Give me a call. 

In the Equestripreneur membership community I will be adding simple google/excel sheet calculators to help you keep track of and determine these elements for yourself and your business, too.

Hugs and Happy Riding,

Kristin

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If you have questions, want help with your business operations, or want to learn more about the Equestripreneur Community, don’t hesitate to reach out. 

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Learn more about author Kristin Bowers.

Blog posts from Equestripreneur are not meant to replace individual professional advice, which will best inform personal circumstances.