David Nicholls lecturing at the 2015 International Hoof-Care Summit.

David Nicholls clearly understands the need for farriers to operate their businesses as businesses. The West Sussex, England, farrier has keen insight not only from being a practitioner for more than 45 years, but from his overall business experience. He’s worked outside of farriery in varied capacities and within farriery, he’s worked in both single- and multi-farrier practices. But for him, there is one reason why he was qualified to lecture other farriers on the subject of business at the 2015 International Hoof-Care Summit.

“I’ve made many mistakes,” he says. “When someone asks me what is experience, I reply that it is learning from an accumulation of mistakes — hoping you don’t make the same ones again.”

A Balanced Life

Nicholls believes many farriers fail to manage their businesses simply because they are too busy to do so. It is the nature of the business. For example, Nicholls points to the mindset that if a farrier is in financial difficulty, the attitude is that shoeing more horses is the way out of that difficulty.

“This stops us from managing our businesses properly,” he says. “The secret to business success and personal happiness is to first organize your business. This removes the pressure on you. You know what you’re doing every day and how much money comes in and goes out with bills.” Pre-booking clients in advance, Nicholls adds, is one of the best ways to become organized.

Another key is becoming detail oriented. Oftentimes, that requires understanding the impact of actions.

“Paying attention to detail is with your manner and time keeping,” he says. “If you are going to be late — even 10 minutes — let them know. Many of my clients work and they take time off to be at the appointment with me. They won’t be happy if you don’t show up.”

A third component is delegation. Nicholls points out that very few farriers are good at every facet of their practice. By identifying shortcomings, you may find an opportunity to delegate a responsibility to someone else.

“I’m not good at accounting,” admits Nicholls. “It is actually cheaper for me to hire someone to manage accounts.”

Understanding Clients

Nicholls says research finds that 50% of small businesses can’t identify who their best clients are. Nicholls says a mistake he made was to think that the clients who turn over the most money are the best ones. Until you identify who your best clients are, you won’t fully recognize your profit margins.

“When you start breaking down accounts and looking at the profit margin on clients,” he says, “sometimes you’ll find someone with a small backyard pony makes you more money. They don’t mind when you come and are often honored that you’re lending your expertise to their old pony. You may find that the net profit is higher per horse than a large barn that is demanding.”

Dollars And Cents

Nicholls says it is crucial to understand the finances of a business. For this, he uses a simple equation to assist.

“First, determine all of your consumable and vehicle expenses, plus all other business expenses and then wages,” he says. “This splits perfectly into three. This seems to work with many other businesses, not just farriery.”

Nicholls likes to determine an hourly rate at 40 hours per week. He admits that very few farriers limit work to 40 hours a week. At 48 weeks per year, that total equates to 1,920 hours. Dividing expenses into the hours provides the hourly rate.

“If you determine that you need to raise your hourly rate by $10 and you’re already $20 higher than everyone else, that is a $30 increase in the minds of some clients,” he warns. “Market forces may prevent you from earning what you should on an hourly rate.”

Embrace Technology

Nicholls is from the pen and paper era. Although he uses a smartphone, tablet and laptop for his practice, he admits he’s needed considerable assistance to move into the digital world. Still, he finds it important to modernize in business management, especially when keeping client records.

The most unenthusiastic task for Nicholls is entering client data into his software program — especially for that initial inputting of every current client.

“The smart money is getting clients to do this,” he says.

Upon reviewing client records, Nicholls was amazed at how much detail was out of date, especially cellular numbers. He approached every client, letting them know he wanted to update their information.

“I would give them the laptop and most of them would enter the data,” he says. “Now when I turn up and they have a new horse, they want to enter the information themselves.”

Monitor Communication

With today’s technology, smartphones have revolutionized how we communicate. The British farrier advises monitoring and using these various channels properly.

Answering/returning phone calls. Nicholls says to never answer your phone or make a call if a client is engaging you. “There will be time afterward to make that call — don’t be rude,” he says.

Texting. This can be useful, but you have to establish boundaries with clients early. Otherwise, they might exploit it.

Social media. “You need to segregate your personal life from your business life on Facebook,” he says. “You can do things on your personal page that your clients don’t want to see on your professional page. You put so much work into promotion, but it can be one small mistake that brings you down. So be careful what you post to social media.”

Inventory Management

One way to control costs is by understanding what inventory is necessary to carry. If something has been on your rig for more than a year, Nicholls says to take it off. Maybe you won’t need a large truck and can downsize. To demonstrate this point, Nicholls showed a 1-ton shoeing van he used to drive. By taking out unneeded inventory, he was able to downsize to a 3/4-ton van. Beyond the annual fuel savings, the cost savings from this purchase exceeded the van payments in a 3-year period with the smaller van.