How to Start a Horse Derby Business

A horse derby is a horse race that is traditionally for three-year-old horses only. Horse racing is more than just a sport; it is a lifestyle. Some fans of horse racing have become so invested in the sport that they want to start their own horse derby business. Horse racing is regulated by the government, which means there are strict guidelines and restrictions businesses must follow. 

Continue reading to learn more about how to start your own horse derby and find out if it is right for you.

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Learn how to start your own Horse Derby Business and whether it is the right fit for you.


Start a Horse Derby Business by following these 10 steps:

You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your Horse Derby Business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Check out our How to Start a Business page.

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

Luckily we have done a lot of this research for you.

What are the costs involved in opening a Horse Derby Business?

You need to secure a horse racing property. If you do not own or rent your own space, you need to secure a space for racing. If you need to secure a location for just a weekend, it could cost anywhere from $2,500 to $50,000, depending on the size and location. The licensing needed costs anywhere from $50 to $100 depending on the state in which you are licensed. 

What are the ongoing expenses for a Horse Derby Business?

You can expect the expenses to include:

  • Location costs
  • Grounds and building upkeep
  • Salary for the staff
  • Insurance
  • Taxes

If you own your own racehorse, there are additional costs:

  • Training
  • Food
  • Medical care
  • Horseshoes
  • Insurance on the horse

Who is the target market?

The target market of a horse derby includes three different people: those that enjoy gambling and come just to gamble, those that love watching horse racing, and those that are currently involved with some aspect of horse racing or want to become involved.

How does a Horse Derby Business make money?

There are many ways a horse derby can make money. The horse derby charges an entrance fee to horses entered in the race. A horse derby also charges an admission fee to those that want to come watch the race. Since a horse derby is a race, they allow people to bet on the races. While there may be people that win money on a race, there are often many that lose the money they bet. These are the three significant ways a horse derby business can make money. 

How much can you charge customers?

The cost of admission to your horse derby can range in price, based on many factors. Prices range from $25 for general admission to thousands of dollars for clubhouse seats. 

How much profit can a Horse Derby Business make?

While it is hard to find real data about how much a horse derby makes, it is fair to say they have a significant return on their investment based on the number of bets being made and participants in the stands. The more money spent betting and on tickets, the more you will earn.

How can you make your business more profitable?

The markup on items sold inside the racetrack is large. To make a higher profit from a horse derby business, you need to sell more concessions. You want to focus on items that cost less for you but can be easily marked up.

Consider items like:

  • Concession drinks
  • Alcohol
  • Snacks

You can branch out into higher-end food and drink items once you have a solid idea of what your customers will buy. Since you will have a mix of people, you can try selling other items like posters, t-shirts, and beer holders. Consider buying items in bulk for a lower price and then marking them up. The key is finding the balance between making a profit while not charging the customer an unreasonable amount.

What will you name your business?

Choosing the right name is very important. Read our detailed guide on how to name your business. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.

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STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your Horse Derby Business is sued.

Form Your LLC

Read our Guide to Form Your Own LLC

Have a Professional Service Form your LLC for You

Two such reliable services:

You can start an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

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You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.

Learn how to get an EIN in our What is an EIN guide or find your existing EIN using our EIN lookup guide.

Small Business Taxes

Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).

You can learn more about small business taxes in these guides:

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.

Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.

Open a business bank account

  • This separates your personal assets from your company's assets, which is necessary for personal asset protection.
  • It also makes accounting and tax filing easier.
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Recommended: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.

Open net-30 accounts

When it comes to establishing your business credit, net-30 vendors are considered the way to go. The term "net-30," which is popular among vendors, refers to a business credit arrangement where the company pays the vendor within 30 days of receiving goods or services.

Net-30 credit terms are often used for businesses that need to obtain inventory quickly but do not have the cash on hand.

Besides establishing business relationships with vendors, net-30 credit accounts get reported to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.

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Recommended: Read our guide on the best net-30 vendors so you can start building business credit now, so you never have to worry about cash flow in the future. Keep in mind that poor cash flow is the #1 reason businesses fail!

Get a business credit card

  • This helps you separate personal and business expenses by putting your business' expenses all in one place.
  • It also builds your company's credit history, which can be useful to raise money and investment later on.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Learn more about General Liability Insurance.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

STEP 8: Define your brand

Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.

If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
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Recommended: Get a logo using Truic's free logo Generator no email or sign up required, or use a Premium Logo Maker.

How to promote & market a Horse Derby Business

You want to create a brand that has a legacy. You should focus on bringing elements of fun, excitement, and a touch of class. You want a brand that people will remember but that also remains fresh and changes with the times. The target audience for horse racing is wide and variable. It would help if you marketed your derby to a wide audience. Promote your races at high-end liquor stores and cigar shops where you may find your target audiences.

How to keep customers coming back

Once you have customers for your horse derby, you want to retain them. You have to set yourself apart from all the others. You need to create a different experience than other horse races. Consider offering a signature dish and drink that spectators cannot get anywhere else. Associate elements specifically to your horse derby, so your customers remember them together. 

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Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.

STEP 9: Create your business website

After defining your brand and creating your logo the next step is to create a website for your business.

While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.

Here are the main reasons why you shouldn’t delay building your website:

  • All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
  • Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
  • Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.

Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.

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Recommended: Get started today using our recommended website builder or check out our review of the Best Website Builders.

Other popular website builders are: WordPress, WIX, Weebly, Squarespace, and Shopify.

STEP 10: Set up your business phone system

Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.

There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use.

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Recommended: Find the best phone system for your business; check out our review of the Best Business Phone Systems 2021.

Start A Horse Derby Business In Your State

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Select your state below for an in-depth guide on completing each of these steps in your home state.

Is this Business Right For You?

A horse derby is an ideal business for someone that is passionate about horses and horse racing. A horse derby is also suitable for an investor, especially one that enjoys horse racing and is looking for a way to earn additional money.

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Want to know if you are cut out to be an entrepreneur?

Take our Entrepreneurship Quiz to find out!

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What happens during a typical day at a Horse Derby Business?

As a horse derby business owner, you will want to own and breed your own horses. A racehorse is an athlete and must train. If you are not a horse trainer, you need to hire one to train your horses. Starting early in the morning, the horses need to be fed, and stalls need to be mucked. The horses then should have about five hours of exercise before being fed again. They have another hour of exercise mid-afternoon before their dinner. 

What are some skills and experiences that will help you build a successful Horse Derby Business?

Aside from having the knowledge of how to run a business, you need to be licensed and participate in proper associations. Every state has a racing commission that must provide you a license for starting a horse derby. You must also join the National Thoroughbred Racing Association, which will familiarize you with all the horse racing events happening in the country. It helps if you have some experience breeding horses. If you do not, you should hire a breeder and trainer to help you in the beginning. 

What is the growth potential for a Horse Derby Business?

You have the most growth potential from buying and breeding horses. You can sell these horses for a profit or enter them into races to earn money when they win. You will need a property where you can host your races and rent out space on the property for others who want to ride. You can start out leasing the property where you host the race, but as you scale, you can buy the property to eliminate the need to pay rent.

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Take the Next Step

Find a business mentor

One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.

Having a support network in place to turn to during tough times is a major factor of success for new business owners.

Learn from other business owners

Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.

Resources to Help Women in Business

There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:

  • Funding
  • Events
  • Guides
  • Support

If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.

What are some insider tips for jump starting a Horse Derby Business?

A good tip for anyone considering this type of business is to have your horse derby close to all forms of transportation and major highways. You want your derby to be easily accessible to everyone. 

How and when to build a team

You want to build your team right away. Even if you have bred and trained horses before or took care of race track ground maintenance, you do not want to do this all yourself. You want to hire experienced and competent people to help you care for your space and your horses. A horse trainer is going to cost between $80 to $120 per day.

Next Steps

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