The economic feasibility of an equine sports therapy facility

Prior to starting a new business, it is crucial to research its economic feasibility. This study was conducted to determine the economic feasibility of an equine sports therapy facility. First, cost structures were created for three equine sports therapy facilities that were based upon the commonly seen facilities currently operating in the industry. The three facilities were named 1 Star, 3 Star, and 5 Star, and varied in capacity size and quality, 1 Star being the lowest quality and 5 Star being the highest quality. The cost structures of the three facilities were used to obtain breakeven points for each of the facilities. Second, a survey was created and distributed to horse owners at varying equestrian events. This survey was then used to get at a consumer willingness to pay for equine sports therapy services. Both the conditional logit and mixed logit models were used to estimate the data collected from the surveys. The parameter estimates from the models were used to calculate the willingness to pay estimations. Third, the willingness to pay estimates were compared to the breakeven points of the facilities to determine which, if any, of the three types of facilities were economically feasible. Finally, it was concluded that the 3 Star and 5 Star facilities could be economically feasible, and the 1 Star facility was not.