Farrier Consultation

 

DeLeonardo/Renchin/Ward:

Advice For Shoeing In Tough Economic Times

 

In February 2009, Hall Of Fame horseshoers Mike DeLeonardo, Red Renchin and Danny Ward sat on a panel at the International Hoof-Care Summit. During this session, they provided insight on how to improve the economic outlook for a  farrier practice during a poor economy. This is the excerpts from DeLeonardo’s response. Full interview can be found at www.americanfarriers.com.

Business Strategies

Mike DeLeonardo:  Taking stock, we need a plan, Sam. Thank you for getting up early this morning and coming here, appreciate your attendance. And I have been shoeing horses my entire life so I never ever had a real job, and when I first started out shoeing horses I didn’t have a clue as to what I was going to do with this thing but I just knew that I wanted to shoe horses. And so at that point, this was in the early 70’s there was no organizations there were no conferences like this and so I had to kind of sort my way through the whole thing.

And so you young guys that are starting out, I think it is very, very important for you to kind of get a lot of different experiences with a lot of different kinds of horses and types of shoeing and kind of get some kind of an idea of what you prefer. I’ve done a lot of different kinds of horses over the years and I kind of settled on the hunters and jumpers and that was a very, very good fit for me. A lot of it depends upon where in the country you live and what your interests are.

We are very, very fortunate that we have the ability to pick and choose where a lot of people do not and so take advantage of this.

MD:  That’s me. Be honest with yourself, get rid of the fluff, keep the necessary insurance in place. I think insurance is kind of like horseshoes, that it’s a necessary evil.

One of the things that I’ve found is that you need to have a good insurance agent. They can steer you to the best coverage as to what you need. There’s a fine line between having too much insurance and not enough. Having not enough can be very, very devastating. What I have is I think is really important is it’s a must to have medical insurance.

My wife and I are in good health, we have major medical with a high, high deductible. We are kind of self-insured when it comes to the small stuff, what I want to do is protect myself against any catastrophic thing that might wipe out my entire savings. The same is true with auto insurance.

Shop around the places are very competitive now, make sure you keep your driving record good. The other thing that I have is contractors liability insurance policy in case the unforeseen should happen and I would have a horse hurt when I was working on it, or destroy somebody’s property. Again, you need to kind of having your butt covered. 

As far as disability insurance I’m a little bit ambiguous about that. I looked into it years ago and I thought the premiums were excessively high for what you get. I prefer to put that money into a savings account instead, but that’s a little bit different, everybody has his or her own story about the use of disability.

MD:  Calculate the actual cost of doing business. You may have to raise the prices on some clients. Again, this is where good bookkeeping comes in and is absolutely paramount to your business. That we’ve all heard about the widget manufacturer who lost one dollar on every widget that he sold but he thought he could make it up in volume. The same thing I think happens with a lot of people shoeing horses is the fact that they want to do the numbers and they want to be very, very competitive and so they are generating a lot of horses.

But it’s not how much money you make; it’s how much money you get to keep at the end of the day. And so you have to understand that we are a fragile commodity. That when we are out there working, we’re using up our bodies. And when you’re churning out the numbers eventually what you are going to do is you’re going to wear yourself out. At the end of your career you’re not going to have anything left, so you have to work smart, not necessarily harder.

MD: You are operating from a point of power if you’ve got a little bit of money in the bank. Again, I come from the old school where I started a savings account as a kid and I’ve had a savings program my entire life and it really, really bothers me if I leave home and I don’t have a couple of bucks in my pocket.

But that is a real, real common situation in this country where people live from day to day and have absolutely nothing to fall back on. And again you kind of arrange your priorities and a savings account should be high on that list.

Purchases

MD:  Buying supplies in bulk, box size are a sizable discount. This is something that I think I see on a daily basis being involved with Harry Patton that guys miss out on. We all know what we use in a week, what we use in a month, you have a base idea of what your client base is. How many city head nails or how many of size one shoe or whatever it is, you know what you want. What I see happening in the industry and talking to other suppliers is us as a group will come in and buy ten of these, five of that, a box of these. The dollar figure is much lower, but the profit that we can make off of it is even lower. If you buy in box size there’s a discount there. Almost every item that you buy from your supply house in the box size gives you some type of discount. Most farrier supply houses also have a discount if you buy at x dollars.

So if you are spending $1,000.00 a week on supplies or $400.00 a week on supplies you are coming into the supply house every day or every other day, you’re losing a discount. Because you are not getting into that discount. Check with your supplier, ask him, say what’s the discount on this if I buy this amount? Do you have a discount on a dollar if I buy x number of dollars. How can I get my supplies at a better price? Every penny, every dime that you save is money in your pocket and money you’re not spending out. So be aware of the discounts of the companies that you’re dealing. And don’t be afraid to ask your suppliers, but if you don’t ask, I’m not going to tell you.

Clients

MD:  Tighten up your shoeing schedule, plan better, consolidate the shoeing trips. What I do is my business I keep track of all the horses’ schedules. And so I tell the customers when the horses are going to be shod.

Generally what I do is on Sunday morning I make up my schedule as to which horses we are going to be doing this coming week. I segregate them into three different locations that I kind of work in. And so consequently, I know how many horses I can do in a particular day, in a particular area and so I can kind of group them together. And so if I have a morning stop and an afternoon stop what I do is I try to get the maximum bang for the buck being in that area.

And I think we are going to really have to minimize the amount of time where we are traveling across the country and not getting as much money made as we need. So this is an important, important area where you really have to tighten up.

MD:  Scheduling your next appointment in advance, you know that’s really important. Before you go out to that client, look at that list and look at them and figure out how many weeks in between you want those horses to be. And then on your receipt that you are going to give that client, write the next appointment. Your next appointment is in 5 weeks on September the 5th at nine o’clock. You’ve already established that you’re going to be back. It’s harder for a client to say, no, most of them are going to say thanks Mike, appreciate it. Nice to know you are going to be out here again and be on time and be there.

Our clientele that farriers deal with is what I call circle clientele. Your outer circle is your new clients, a brand new person is going to come in that you’ve never met. The second circle around that is the clients that call that are hit and miss. And then your third circle is your solid foundation clients, that’s the ones that you have forever if you can. But they always make the next appointment; they always have an appointment set up. By having that, you have a good idea what your base income is yearly. That also allows you to go to the bank and get a loan, talk about getting a house, all kinds of different things that you may want to do with your life. Because you know what your base client is and you can show that.

Footcare Fees

MD:  Charging mileage or barn call or feed for your stop. I think this is very important, if you gentlemen and ladies don’t realize, you are probably the only business in the United States that doesn’t charge a house call, or a barn call, or a stock fee. Do you realize that the hay man, the veterinarian, the plumber, the electrician, all charge a house call of some sort.

You are a service-related business, which means that you have to come to them to give them and it costs you money to run that truck. On your receipt you should have some type of call fee that will tell you that if you look at most call fees out there for most service related businesses, they run $40 to $65. I know most of you have horses and you know what the vets are charging us. I know that would be pretty hard for some farriers so start it this way. 

For you folks that have never charged a barn call, find where your point of operation is which is your home or if you are out of a vet hospital or if you have a facility somewhere. Go out ten miles, 20 miles, etc. Figure out a dollar figure, if you want to start at five, and ten and 20, and on out. The way I do it is three dollars for anything out at 15 miles, its $45.00 at anything from 15 to 50 miles. It’s $75.00 at the 50-mile mark to 60 miles, and it’s $100.00 for anything beyond that. I also put a minimum work fee on what we do, it’s a dollar figure.

Now whereas I use the $400.00 mark, anything less than $400.00 gets a barn call, that’s it. Anything less than $400.00, you can use things like that. If the client says I don’t want to pay that, well then like Danny said, come on into the shop, I’d be more than happy. You don’t pay a barn call, I’ll give you ten dollars off your shoeing and you can bring your horse in. And you’re going to save your gas, wear and tear of your truck, and time. 

MD:  I think you stole my thunder earlier, I was going to suggest that you use credit cards here. And we do, we have for the last eight years used credit cards in our business. Nowadays a lot of people have debit cards and most of your credit card companies that you’re dealing with, the machines take both debit and credit so it’s not a problem. 

There’s now a lot of small machines out there that we can put in our truck, plug into the cigarette lighter, they have their own cell phone attached with it, it’s a little attachment. And it goes instantly to the client, and instantly out of their account from a debit into your account. Or if it’s a credit a lot of times you ask a client, they’ll hand you their card and you’ll say credit or debit and they’ll just do the debit side of it and they’ll punch their little number in. You can do that right on the spot, as most of you know, I have a multifarrier business and for your gentlemen that have more than one farrier working for you, or has an apprentice that runs out and does some trims. 

You can have the client’s credit card in a secure file in your computer and when you get back from the job you just go to the computer, you bring that up, you run that in your machine and you have that money. You are not dealing with trying to get a check, trying to get a bill sent out. There is so much nowadays that is plastic that we can use to increase the income and the cash flow of our businesses.