Even if you love shoeing for a living, remember that you’re in it for the money, warns farrier Brian Robertson of Owosso, Mich. “When you wake up in the morning, you have got to be a businessman; from the minute you wake up until the minute you are off the clock,” he says.
Robertson started shoeing horses in 1971 and made it a full-time career in 1973. He remembers the mentality of the not-so-good old days when many farriers enjoyed the freedom of their chosen work, only to find that independence didn’t pay the bills. “Thirty years ago, horseshoers were gods, or thought they were gods. They had that alternate lifestyle. They were out of corporate America and out of hourly jobs,” he says.
But if farriers think they’ve left the business world behind, they’re doomed to fail, and most of them do, he adds. “They don’t fail because their product or service was bad, they fail because they are poor businessmen. Being a successful shoer requires more than having a spouse with a great job. If that’s your plan, you are in serious trouble. Basically, you’re subsidizing the horse industry,” he says.
Robertson offers detailed advice about succeeding as a horseshoer. It begins with recognizing that farriery is a service business, no more and no less.
“All the rules of business apply. If you don’t follow good business practices, you are going to fail,” he says. “You can be the best horseshoer in the world, but if you don’t provide service, you’ll be sitting at home waiting for the phone to ring.
“Excellent customer service is the ability of an organization or an individual to constantly and consistently exceed the customer’s expectations,” he adds. “It has to be every day and every horse and every foot. If you don’t exceed their expectations, they’re going to start looking for somebody else.”
He advises farriers to listen for their clients’ wants and desires, and to be sensitive to unsaid things the clients want but don’t dare say.
“Look that horse owner in the eye. They try to tell the horseshoer what they think we want to hear, but that’s not really what they want. They want a comfortable horse. They want to be able to enter the horse show, or to have the horse pass a sales exam. You have to find out what their real expectations are,” he says.
“In my 35 years, I’ve found that the owners’ expectations are very rarely unreasonable. If you get to the essence of what the client wants, it’s not off the scale. It’s not something horrible that will cause you undue pain or inconvenience you horribly. You can usually quite easily accommodate what they want.”
In evaluating their service, farriers should ask themselves, “Is your visit welcomed, or is it endured? Do your clients look forward to the shoer coming, or do they cringe at the thought, and it has nothing to do with writing the check?”
He emphasizes, “I don’t sell horseshoes or nails, I sell service. I don’t settle for just customer satisfaction or even delight, I shoot for bliss. I want those people tickled to death. If you have a few extra minutes in your day, call the client you did some therapeutic work for. Ask how the mare you shod is doing. It costs you nothing on your cell phone, but that makes your customers ecstatic.”
Respect Flows Both Ways
Robertson also tells farriers that they must respect their customers before the customers will respect the farriers. Disregard the old saying about baffling them with baloney if you can’t dazzle them with brilliance, he says.
And remember, he says, “Women defer to men. If you give them a line of baloney, they’ll stand there and smile and nod while thinking that you’ve got the IQ of a house plant. So don’t disrespect your clients; it will come back to bite you every time.”
Be honest, he says. “If you don’t know how to do something or you don’t know the answer to the client’s question, just tell them that. Then tell them you’ll find the answer. And if I don’t know how to do something, I will refer them to a shoer who can do what they want done. I’m not going to try to fake it, because it will come back and bite me.
“If you’re honest with yourself and honest with your clients, you’ll have a successful business,” he says.
Learn On The Job
“I have made every horseshoeing mistake known to man. It didn’t kill me, but I never made the same mistake twice. I’ve also made every possible business mistake, but I never made the same mistake twice,” Robertson says.
Typical business mistakes include giving deals, shoeing for cash, doing the trainer’s or boarding stable owner’s horse for free, undercutting somebody else’s prices, charging too much or charging too little, he says.
Robertson notes that the common practice of shoeing for undeclared cash is illegal.
And, he points out, “If you don’t pay into self-employment tax, you’ll get nothing from Social Security, and if you under report your income, you’ll get the bare minimum, which is now $510 per month. If you try to take out a loan for a truck and you can’t show an income, you won’t get the loan. You’ll be buying used trucks for cash. You’ll be part of the underground economy. You’ll have a pocketful of cash, but not a prayer of having a comfortable retirement.”
He believes knowledge hinges on continuing education. “You have to read every horse magazine out there. They will tell about the disease you’ll come across next month. Your clients read those magazines, and they all get on the Internet.
“You had better be well-versed and understand what they’re talking about. You might disagree with it, and that’s fair,” according to Robertson. “But if you don’t know what they’re talking about, you’re in trouble. They’ll find somebody who does know.”
Building Word Of Mouth
Reliability is another factor too many farriers overlook, he says. “Reliability includes showing up when you say you will, as well as returning every phone call. It’s courteous and it’s easy to do, and it costs very little. All you have to say is, ‘I am not taking on clients at this time, but I’ll refer you to someone else,’” he says.
“Customers appreciate that. Each of those satisfied people will tell three other people about you. A dissatisfied person will tell nine other people, on average, so returning calls is a little bit of time and money well spent.”
He adds, “You have to show up when you say you will. Your appointment book is written in stone. I’d better be dead or dying or under the knife in surgery to not show up. And if you can’t show up, call the client and let him or her know.”
Robertson suggests farriers call or write to customers they wish to drop. “Say, ‘I can no longer provide farrier services that will satisfy you at this time.’ Terminate your business relationship professionally. If you don’t, they’re telling everybody they talk to at the horse show, at the race track and at the feed store that you’re an undesirable person,” he says.
Marketing Makes A Difference
Robertson stopped advertising after his first 3 years as a full-time shoer. “It’s just not productive or cost effective,” he says. “What counts is word of mouth. Get your face out there. I made sure there wasn’t a veterinary clinic within 50 miles that didn’t know my name or what my truck looked like. I bought donuts and coffee and stopped in to see them. If I had 10 minutes to spare, I didn’t go to the coffee shop and sit around, I stopped at a vet clinic to chat.”
He doesn’t encourage phone book advertising, either. “The truly successful farrier is the one who can operate with an unlisted phone number,” he says.
Marketing includes projecting a professional image, he says. “Carry some extra shirts, wash that truck. Don’t spit on their floor. Don’t leer at their daughter or wife. If you’ve got tattoos and ear piercings, it won’t work. It’s like going out there with a ball and chain on yourself. And this is from somebody who tried to shoe for a living with a pony tail out of a VW microbus,” he cautions.
Ready, Set, Compete
A FINANCIAL FOCUS. Farrier Brian Robertson keeps his eye on the ball, which is a financially sound horseshoeing business that ends up providing a secure retirement.
Robertson describes the farrier industry as head-to-head competition. “When I started, there were 30 horseshoers in my county, one of whom was a Hall of Famer and two or three others who should have been. We had four horseshoeing schools in Michigan then, and they were cranking out 12 to 20 students every 8 weeks,” he recalls.
Be ready to take on that competition, he says. “If you make a business mistake in my client base or in my work area, I’m going to eat your lunch. You might make a prettier shoe or be a whole lot cheaper, but I will outservice you for the clients every single time.”
Despite the fierce competition, he is quick to say, “I will never bad-mouth another farrier in front of a client, even if the guy nailed the shoes on sideways, backward or upside down. I don’t have a clue about what he had to deal with, what the horse’s attitude was or how crazy the owner was. My comment is, ‘Well, that’s not the way I’d do it. Let’s try something else.’”
A vital business consideration for a farrier is determining his or her fit in the market. One possibility is operating as a commodity business, in which there is no perceived difference in quality between shoers and competition is driven only by price.
“That’s fine, but you had better be able to crank out the quantity in order to make money,” he stresses. “If you make that choice, you better be twice as efficient as I am. You might be one of those 10-horses-a-day shoers. That’s fine, but I don’t think you’ll be shoeing for 30 years.”
Robertson operates as a specialty business and notes that niche marketing rarely competes on price. “I work 40 hours a week. I make the same money in January that I do in July. My wages are constant throughout the year,” he says.
The Supporting Cast
Because few shoers work in a multiple-farrier practice, most farriers see themselves as a “lone wolf” businessman who can shoe every horse and every way possible. But that’s not really possible, he says.
“Working all by yourself is an image, not a reality. If you’re not going to be a lone wolf, you’re an entrepreneur. An entrepreneur is not an island. Every successful entrepreneur is part of a team,” he says.
Robertson believes the necessary “teammates” for a successful business, in order of importance, are:
- An Accountant — “If you are going to run a business that generates any kind of gross income, you should have at least a CPA (certified public accountant) as a consultant,” he says. “You can do your own bookkeeping, but you cannot be an expert in tax law. There are 6,197 pages of tax law; 800 of those pages concern a sole proprietorship. My CPA references 800 pages of tax law to do my taxes. It costs me $53 a month; that’s less than two trim jobs. That’s invaluable.”
- An Attorney — “You want to know an attorney long before you need one for entering into contracts of any type. If you take out a loan and you don’t have an attorney to talk to, how do you know you’re not being fleeced? Or it could be a care-and-custody contract, or a maintenance contract. There are some stables that now require their farriers to be on a contract,” he notes
- A Banker — “When you’re making weekly or daily deposits from your gross receipts, you ought to know the banker. You should also know the loan officer. I’ve run $100,00-plus through deposits every year for the past 10 years,” he says, “and those people know me.”
- An Insurance Agent — “This should be somebody you know on a first-name basis,” Robertson says. The agent will help arrange the best policies for truck insurance, life insurance, health insurance, liability insurance and care-and-custody insurance. “It doesn’t cost anything to talk to a banker or an insurance agent, it just takes a little bit of time,” he says.
- A Medical Professional — “We (farriers) are selling our youth,” Robertson says. “I used to compare us to ladies of the evening; they also sell their bodies. We sell ours every day. If your body is broken, you’re not making any money.”
He adds, “You should know somebody beyond a general practitioner, maybe a sports medicine specialist. Otherwise, you’re not going to last. If I need to get something fixed, I can call a surgeon and get in for surgery the next day. I’ve had both of my rotator cuffs rebuilt. I made a phone call, and I had an MRI and was on the operating table 2 days later. I was back to work in 3 weeks.”
- Peers — “If you don’t know how to do something, call the horseshoer who lives down the road or the guy you met at the supply house. Just talk and ask. I’ll answer any question if it’s on your nickel,” he says.
Small Business Resources
Robertson says there are thousands of resources available to help farriers make sound business decisions, including:
- The Small Business Administration — “It’s funded by your tax dollars. They are your employees,” he says. (Visit http://www.sba.gov/ for more information.)
- The SCORE Association (Service Corps of Retired Executives) — This is a nonprofit association comprised of 11,500 volunteer business counselors. “It’s a bunch of retired guys with nothing to do but answer your questions,” Robertson says.
“I call or e-mail these people with questions two or three times a year about inventory management, funding retirement accounts, major purchases or any business issue I might have. You can have an answer in a day.”
- The Chamber of Commerce — “I met my attorney, my insurance man and one of my doctors through the Chamber of Commerce,” he says. “I talk with plumbers and builders and other poor guys like us who are working for a living. Sometimes they’ve already encountered a problem like I’m having, and they already have a solution.
“The dues aren’t bad, and you might get a free breakfast meeting every Tuesday. They also have speakers come in to talk about retirement, disability, insurance and lots of other things,” he says.
- A Local Business School — “I’ve got a business school in my town. If I have a question about business, they have professors there. I went in and let a class analyze my business. They came up with some wonderful suggestions,” Robertson says. “I found out I was losing money every time I went to see some of the people I was shoeing for. The class recommendation was to drop several clients because they were too far away or they wouldn’t put their horses all on the same schedule.”
- National, State And Regional Farriers’ Associations — “I don’t care if you have an argument with their politics or if you think they’re dumber than a box of rocks, you need to be a member. There is safety in numbers,” according to Robertson.
“One of my former clients tried to introduce legislation in Michigan specifically for a sales tax on horseshoers’ services. He was so tired of horseshoers, including me, sticking it to him, that he was going to stick it to them. The Michigan association has only about 10 percent of the farriers in the state as members, but at least there were a few people to talk to when our legislators started asking what we thought about the law. They dropped the idea.”
Dues for national and state associations are tax deductible expenses, he notes. “That expense comes out of your gross income, thereby reducing your tax liability.”
Robertson shies away from the services of a professional financial planner, whom he refers to as, “That college kid working for a commission on your investments. If he was a financial genius, why is he in your hometown; why isn’t he working on Wall Street?”
Networking with the people in the various support organizations also can lead to new and better clients through referrals. “Remember, it’s not what you know or who you know, it’s who knows you,” he says. “Every person you meet, look them in the eye and shake their hand.”
He offers a tip for remembering the names of all the new acquaintances. “I find that if I repeat someone’s name three times, I will remember their name forever. If I meet a new client, I intentionally use the client’s name and the horse’s name in a sentence three times. It’s just a memory trick,” he says.
Plan To Succeed
Robertson offers the old adage, “Failing to plan is planning to fail,” and he emphasizes that a written business plan is essential. “If you ever need to borrow money for the business, a business plan is required by the bank,” he says. “If you are audited by the IRS, you need the information they ask for, and also a dated business plan, otherwise they are going to start a fishing expedition.”
His attorney recommended he make two copies of his business plan, one for his files and one to be mailed to himself. The mailed copy should be left unopened after delivery, with the postmark proving that a plan was in effect when the business started, Robertson says.
A business plan can be modified as time passes, he says, but it should always answer several questions:
- Do you want to be The Dollar Store, Wal-Mart or Saks? “All of them are legitimate businesses, and all of them can make money. Are you going to operate based on quantity, being like The Dollar Store? Will you do it on price, like Wal-Mart? Or will you do it in the niche market like Saks?” he says.
“The niche market doesn’t mean working only on $100,000 horses. I shoe the 4-H pony with the same level of expertise, and I get paid the same hourly rate to do it.”
- What are you willing to do? Robertson recommends that farriers know how much they are willing to work every day, week and year; the services they are willing to provide; and how much inventory they expect to carry.
- Who will your clients be? What breeds do you want to work on? What disciplines do you want to be able to service? What areas or counties do you want to work in? “You have to have those answers,” he says.
- Why will clients use you? Will you attract clients based on the level of service provided, price, proximity or quality. “You need to think long and hard about this, and you need to write it down,” Robertson advises.
- What will make your business different? Choose a business model, he suggests, such as a focus on high-end or low-end horses, trail horses or whatever.
A business analysis should be conducted every year, he says, and every business should produce regular financial statements. He notes that his monthly statements list that month’s gross sales, operating expenses and net income, along with similar quarterly and year-to-date figures and a comparison with the same month the previous year.
“This provides you with information you need to make business decisions,” he says. “If you don’t know what your past is, you don’t have a clue about what your future will be.”
Beyond knowing your current financial status, consider your future financial needs and desires, he says.
“Where do I want to be? I don’t want to be shoeing when I’m 65 years old,” he says. “Plan for that. If you don’t do today what it will take to get where you want to be, you will be shoeing when you’re 70 years old, whether you want to be or not.”
Time Committed, Paid
Robertson stresses that farriers should be working for profits, not wages, though they should be able to tell how much they make on a per-hour average.
A farrier’s billable hours should generate five times the hourly wage for the business to be successful, he says, because the billable hours must compensate for all overhead, including administrative hours.
“To get $30 per hour, I have to generate at least $150 of income per billable hour on average,” he says. “That way I get paid my hourly rate every day for everything I do, whether I’m answering the phone, driving the truck, stocking the shop, buying propane or whatever. That’s 50 weeks out of the year, and I have a 2-week paid vacation.”
Farriers must also manage their expenses, and Robertson recommends that they try to justify every dollar of business costs as a legitimate tax deduction. He cites fuel, for example, as a cost that can be deducted at tax time.
For tax purposes, he can deduct 40 cents a mile for 2006 (down from 48 cents), but he drives a Nissan pickup rig that gets 24 miles per gallon of gas and costs him just 27 cents per mile when all expenses are considered. That means he makes money on every mile he drives.
“I put my money into tax-deferred municipal bonds and stocks, I don’t put it into my truck,” he says. “My truck is less important to me than one of my hammers; it’s just a tool. It’s clean and efficient and it carries everything I need.”
Free Money, Almost
He also urges farriers to use a credit card for business purchases, thereby generating a credit card bill that serves as a convenient record of business expenses.
In addition, the use of a credit card amounts to an up front, interest-free loan from the credit card company, Robertson notes. “It’s like having money to play with,” he says. “You have to have money to make money, and the big wheels don’t come up with their own capital, they use someone else’s money.” But be disciplined enough to pay the credit card bill before the due date, he cautions. “In 24 years of using this card, I have never paid a penny of interest.”
On top of that, he notes, his Discover credit card provides a cash-back bonus that he uses to help pay for his vacations.
Purchasing Power Plays
Farriers should take a business approach to their purchases, Robertson advises. “If you are a businessman, you can negotiate. If you’re only a horseshoer, just open your wallet and dump all the money on the ground,” he says.
As an example of negotiable purchasing, he points to a recent monthly cell phone bill of $228. For the same month during the previous year, he had paid $245 for the same number of minutes. He lowered the cost by talking with the phone company, which changed his plan to one better suited to his call patterns. “That was free money. All I had to do was ask. The worst they can do is say no,” he says.
Likewise, he also switched to a commercial plan for purchasing propane gas. Propane that used to cost him $310 now costs just $248. “I made a commitment to that dealer. I’m buying all my propane from him, and I get a better price,” he says. Plus, the dealer provided a key for after-hours access to full propane tanks to replace his empties.
There’s also the possibility of buying supplies from less successful shoeing businesses. Over the past 10 years, he purchased 15 to 18 percent of his supplies from failed farrier businesses, he says, “and I don’t pay more than 20 cents on the dollar. The only thing I can’t buy from failed farriers are their anvils, because they always think they’re going to get back into it someday.”
Track Your Investments
Farrier tools and inventory are a capital investment, and every investment should generate income, with a return of 5 percent being a reasonable goal, Robertson says.
“Otherwise, why put all that money into your capital investment instead of putting it into a certificate of deposit? That CD would earn at least 2 or 2 1/4 percent interest,” he says. “Or invest the money in mutual funds; they’re paying 3 or 4 percent interest. For 1 or 2 percent, you might as well work for McDonalds.”
Farriers also should review their equipment, which is a capital investment, and depreciate everything possible. “When the depreciation is exhausted, sell the stuff. There’s no longer a deduction on your tax form,” he says. “If you have an anvil or a forge for 7 years, it doesn’t have any depreciation left, but you can usually make a few dollars selling it. If you want to, you can buy new equipment that will come out of your tax liability.”
A further reduction in his tax liability comes from a recommendation from his CPA. “She said that for every $2,000 I put into my SEP IRA (Self-Employed Pension, Individual Retirement Account), which comes off my gross income, I reduce my federal tax liability by $450. So that $2,000 actually costs me only $1,550. I pay myself, and I make $450 for doing it,” he says.
Although Robertson places a clear focus on his business, he balances his priorities to make his work livable. “I don’t work more than 50 hours a week,” he says. “I don’t work Sundays, unless it’s a horrible laminitic case, a bleeding quarter crack or a horse with his shoe stuck in the fence.”
If a customer requests after-hours service, Robertson tells the client he will do the work, but at time-and-a-half pay rates. “When that $125 shoeing job becomes $190, the client usually figures that it can wait until the next day. You have to give them the offer so you’re living up to your promise of service. If they protest, ask them what they get for overtime or holiday pay.”
After more than 30 years of shoeing, Robertson has made significant strides on the road toward retirement, and he can look forward with confidence in his future. “I’m pretty good as a horseshoer,” he says, and I’m damn good as a businessman.”