When starting a breeding herd:
#1 choose females that have very good to excellent conformation, calm minds, good or better bloodlines and possiblly performance records (I would mostly likely be buying young stock and those records just plan may not be there.) If this means you only can buy 10 head instead of 20 so be it.
#2 never buy a male or semen that is inferior is your females
#3 breed the best and cull the rest, if the means 90% cull rate so be it.
#4 stick to basic don't follow new treads, until they are firm, but but ignore the market.
#5 make sure you have a market for your stock.
These were what I was taught my my dad and grandfather in running a cattle operation, but I feel these are not far off to work for a horse breeders as well