© J. Scott Simpson
published in ANVIL Magazine, January 1997
As a person enters the horseshoeing profession, inevitably money begins to pass between the person for whom the work is performed to the person performing the work. This commerce is known as cash flow and is usually not handled or managed in a manner consistent with sound business practices. To begin with, the fee is usually arrived at by nothing more than a guess as to what the work is worth. As time goes by and the horseshoer acquires more customers and experience, he begins to realize that this can become a real business and that his fee has no meaningful significance. It is just a number that when multiplied by the number of jobs performed, amounts to some income.
NOTORIOUS FOR POOR BUSINESS
Horseshoers are notoriously poor businessmen and they relate the need for more income to increasing the number of horses they do. There is a strong tendency to relate to this cash flow as income when in reality it is just a gross figure that has not been correlated into profit. The problem stems from the fact that very few horseshoers ever have to rely on their shoeing money to earn a living when they first enter the business. They shoe for extra income to their regular jobs and don't keep sufficient records to actually analyze how much is really left to spend at the end of the week, month or year.
I remember going into a dealership and negotiating for a new truck. This was in 1959 and I had been shoeing part time long enough to know that I could afford a new El Camino if I was careful.
I had been living comfortably on my income as a machinist and calculated the payments after the trade-in of my 1953 truck. It came out to "only eight more horses a month." This worked out fine for the time, but I still didn't have much sense for a real business. This does seem to be our rationale, though - we don't care how much it is, just how many more horses is it?
I know this sounds like a lot of negative rhetoric, but there is a meaningful purpose to it if I can help those of you who are in the trade (and especially those of you just entering it) to become more successful. Horseshoeing is a vocation and even if done only part-time as an adjunct to another job, it should become a real business generating real income, not just an avocational happening.
When I first began shoeing horses in 1953, I did not have a clue that it would become my lifetime career. The first horse I ever shod for a fee was for an older gentleman who knew that I shod my own horse. He paid me six dollars for the job, as that was what he had been paying someone else. My next revenue job was for another older man, Mr. Stewart. He paid me seven dollars a head to do an Arabian stallion and a grade mare. He also gave me about fifty pounds of horseshoes that were leftovers from when he had run a riding stable. At that time I was making $1.35 an hour as a machinist. The shoes and nails to do those two horses had cost me about $2.00. It took me nearly four hours to get shoes nailed onto those two head. By the time I was finished my mind was racing. Two times $7.00 = $14.00. Eight hours times $1.35 = $10.80. "Wow! I'm really on to something here," I said out loud. "Excuse me?" Mr. Stewart said. "Oh, er nothing," I replied. "I just thought of something." And so, armed with my fifty pounds of assorted Phoenix brand cowboy shoes and grandiose plans, I set off into the world to seek my entrepreneurial fortune.
For the next five years I nailed shoes on just about anything that grew hair. I didn't care how rough they were just so long as someone would anoint me with my traditional $7.00 (I was meaner and tougher than they were). Fortunately for me and my family, I didn't give up my job. I always seemed to have a pocketful of money and had taken a job as manager of a large feed store. Through my connections with this new job, opportunities to acquire new horseshoeing customers were more plentiful than ever. Delivering hay and grain to our equine customers also gave me the opportunity to scrutinize the work of other horseshoers. It was painfully apparent that my own work was inferior to much of what I was seeing.
By this time, I was 25 years old and had a wife and baby. I knew I wanted to be a real horseshoer. I also knew that the work I was performing for people would be deemed malpractice by today's certification standards. I was also achingly aware that I was not doing any work for the show horse stables to which we sold feed. I enrolled in the horseshoeing course offered at Cal Poly, San Luis Obispo, attended the next year and got an A for the course. I returned to my home near San Diego, and got my old job back as a machinist at General Dynamics Astronautics so that I could work the night shift and shoe horses during the day. I established a new fee of ten dollars a head, as I was now a graduate farrier. For the next year, I worked nights making an astronomical $2.75 an hour plus a fifteen-cent-an-hour night bonus. Because shoeing was still not my full-time job, I made the fateful mistake that we all make and didn't set my own fees. I went along with the stupid idea of a going rate. It would have made a huge difference in my lifelong career if I had started at 50 to 100 percent higher than ten dollars. Sure it might have taken me just a bit longer to establish a full-time business, but I would have made so much more profit that I would have been way ahead by the time I did. How far ahead would I be now in 1997? By the amount of the fortune I sought, but never found.
When I finally quit my night job, it wasn't that I was entirely ready to do so. It was a circumstance dictated by my counterpart who worked the day shift that forced my sudden entry into full-time farriery. He and his wife had bought a house and he needed the fifteen-cent-per-hour night bonus to make it work. He was eligible to bump me onto days for six months and I just had too many horses to shoe to be able to do them in the evenings and weekends. I was also beginning to acquire some of those coveted show horse accounts where I could charge higher fees.
MAJOR DECISION
This was probably the single most important decision of my life - to give up a good job and become a full-time horseshoer. It was a little scary at first, but I was a lot happier doing what I chose to do and my experience level was beginning to open doors to more and better work. I began shoeing Saddlebred show horses for much higher fees than my regular work. My base fee was still ten dollars, and it seemed to be sufficient. Though the opportunity was there to increase it, again I just wasn't smart enough.
Most of my friends worked in the trades: plumbers, carpenters, electricians and such. They all made around $5.00 an hour and that made a $40.00 work day. These were good wages in the early sixties. In all of my glorious rationalizations, I compared myself to my buddies and figured that I had to make as much as the best paid of them. Here is how I computed my income schedule: If I shod five horses a day at ten bucks a head I grossed $50.00. Take out ten dollars for supplies and expenses and I equaled my cohorts' income. Most days, I was usually finished with my work about 2:30 pm. My friends worked until 4:30 pm so that, in my mind, made up for the fact that they received some benefits such as health insurance, pension plans and a paid vacation. The days I did gaited horses gave me the extra income to buy insurance, but I was bullet proof and was going to work forever, so who needed a pension? Besides, I was paying into this thing called Social Security, which as I am fast approaching my sixty-fifth birthday I realize is, financially, Social Insecurity.
MAKING THE GRADE
How is that for career life planning! If not a flat out F grade, then no better than a D minus. It wasn't that we didn't get by and at times seemed pretty well off, it just didn't pan out to be a very good scheme for my life's work.
I might add that among this group of friends, none of our wives worked outside the home. We were all living the American dream of owning our own modest homes and having at least two vehicles per family. For several years we all raised kids in this suburban lifestyle.
We now live in an age when we hear about more and more people having to live on a fixed income. I lived on a fixed income for years as a horseshoer. I had established this all-too-typical situation of making enough money to be comfortable and kept it right there for most of my working career. Being the only one of our group who was self employed, I passed up so many opportunities to become better off financially. This was because I was complacent and satisfied to be just like everyone else. The mistake I made was that while living in this little Utopia, I wore out my means of finally making a comfortable income. My body became incapable of letting me remain a full-time horseshoer.
Where are you right now in this scheme of things? Are you already a part of this system of financial ignorance or are you beginning to become part of it? Whatever your situation, do something better than the majority of us who have made every financial mistake imaginable. Good planning on your part right now will impact you and your family for a generation or more. My own grown children are already beginning to realize that they are never going to inherit much from their father. I could have done better by them. Much better!
If you are obligated only to yourself right now, comprehend this: you will not think that you need to take this following advice. For your own sake and for all who may be impacted by how you conduct your business, please do.
I will digress for a couple of paragraphs to say that what I will suggest as a financial plan for individuals will help make the trade better for everyone involved in it. If you only shoe part time, help make it better for those who shoe full time. This in turn makes it better for you should you determine to make it your chosen career. Without being cognizant of the fact that they are doing so, most part-time farriers dilute the trade and create the situation that prevents farriery from being a vocation for those who would desire to make it such. There is absolutely nothing wrong with being a part-time horseshoer just as long as you subscribe to professional standards and ethics (I am a part-time horseshoer). I teach it full-time and shoe to augment my teacher's salary. I have the right to do this in a free society. I make shoeing a much better trade in my community by providing quality work and good service to my clients. I also charge fair, professional fees. Should another shoer acquire one of my customers, he can be assured that this client expects competent work and service and will be willing to pay for it.
All horseshoers who do not have to make their living at this trade should use this opportunity to upgrade it for all of us. The single most important element of all of this is the fee you charge. If you do not have to rely on shoeing as your principal means of income, charge at least as much as the highest priced shoers in your area. No one will resent you and you will take the time to do the best work that you can because you will be compensated to do so. Better still, gird your loins and charge a higher fee than everyone else and you will upgrade the region for everyone. You may not understand this for a long time, but you will make a lot more money by shoeing fewer horses. An exuberant young man I met recently said, "I'm shoeing all of my friends' horses for free so I can get the experience." He disrupted two very good accounts for other shoers and lamed three nice horses. He went on to explain how so many people were upset with him and then asked me, of all people, "Do you think I need to go to horseshoeing school?" My response wasn't very kind, but I sure got his attention. The sad thing is, he didn't have a clue that he was doing anything out of line.
WHAT'S THE DIFFERENCE?
Everything can be improved upon. The following is no exception. Comply with it to the letter, or you may modify it to fit your own circumstances. In essence, it is a blueprint to help you make an excellent living in the trade of horseshoeing. Empathy is the key to making a point about something so I usually start my lectures about this subject with this joke:
First guy: "Do you know the difference between an amateur rodeo cowboy and a pro rodeo cowboy?"
Second guy: "No, what is the difference?"
First guy: "Well, the amateur cowboy works all week and rodeos weekends and the professional rodeo cowboy rodeos full time and his wife works."
You can only fully appreciate this story if you have done some rodeo, but the fact is, there are legions of horseshoers who could not afford to be shoers if their wives didn't have a good job with benefits (They may think they have a good thing going, but the wife might not think so).
As I begin this dissertation, I am aware of the fact that our income taxation system in the USA is probably going to change in the near future. Politicians are promising change and reform in this area of our lives. I am optimistic enough to hope that it will be a much fairer situation for the next generation, but pessimistic enough to know that self-employed persons will still pay substantial taxes on their profit incomes. I know that income taxation is also a concern of every working person throughout the world. Taxes are inevitable and will be a major part of this discussion. I can address this only from the standpoint of what we deal with in the United States. Persons from other countries will have to interpret the tax situation as it pertains to their own nation.
REFORM - THE THEME OF THIS DISCOURSE
Up to this point I have implored you to be good to the trade. In return, it should be very good to you. The intrinsic rewards of doing a job well stirs an inner feeling that is needed by most of mankind. Certainly, the majority of medical doctors don't become doctors simply so they can become wealthy, but they are seriously aware of their income potential, as are most professionals. They enjoy the financial rewards associated with being able to serve society and are well paid for what they do. I don't think that it is immoral for farriers to share this philosophy. Almost everyone we work for is more affluent than we are, so why shouldn't we have the privilege to be paid as professionals? This is where the necessity for reform comes in. As a group, why can't we learn how to shoe horses as a real business and charge accordingly?
Understanding the difference between cash flow and how much you actually make is the mystery that many of us never unravel. Doing just a bit of detective work may solve this conundrum. As horseshoeing is usually done on a per-head basis, every horseshoer has a basic fee. How much you charge for shoeing a horse and how much you get for shoeing a horse are two vastly different things. I have asked this question to over five hundred shoers in the past two years. "How much do you get for shoeing a horse?" Inevitably, the answer is always the dollar amount of their fee (which, I might add, varies by amounts that defy comprehension). "How much of that do you get to spend?" I ask, and the answers to this invasive question get real ambiguous. They range from embarrassed to puzzled to raucous, smart remarks to honest "I really don't know." That's a good place to begin!
Scott Simpson has been practicing farriery for over 40 years and teaches farriery at Walla Walla Community College in Washington.
Part II of "Farrier Finances" will appear in the February, 1997, issue of ANVIL Magazine.
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