On the seemingly never ending problem of guys not making enough money, I think this article could be quite helpful especially for new guys.

Anybody out there not knowing what to charge or really having a full understanding of how to properly do business, do yourselves a favor and print this out. Keep it near you and refer to it often.
http://www.americanfarriers.com/pages/Features-A-Practical-Approach-To-Setting-Your-Shoeing-Prices.php
George

I agree, it's simple and easy to use for yourself. The fun part is the rule of thumb numbers apply here in Europe too. Although our profit/tax ratios are WAY different from you guys in the US.


Ronald Aalders

Thanks George, I read all I can about business management and I agree entirely with Esco's way of figuring cost out.

However, it's a fine line for farrier's just starting out to be honest in factoring this pricing in. If your efficiency is not what it could be and you take 2 hours to shoe a horse, it's not right that the customer should be paying you twice as much as someone who is of a higher skill level.

Being new in this area (and relatively new to shoeing), I have started at $110, which is already $30 higher than other guys I know in the area (bottom end), but it does take me almost 2 hrs to shoe 4 feet (don't lose heart Smitty!), I have a goal to get that down to 1 hr and as I work to do that, I will gladly and confidently increase my prices. I know in a year I will be making what I should, but I have to own that it is my inefficiency that is blowing the equation out right now.

To boot, I reckon I spend as much as I make on education so I better have a plan for recouping that!

I just recently informed all my customers that my pricing is going to be increasing January 1st. I raised my shoeing prices by $15 for a full set (still less than $100) and my trims to $40. We'll see how it works out.

Interesting timing here. Last week I was talking to a farrier that has long been an advocate of learning about business. He's written some articles, given some talks, etc.

How's he doing with his own advice? He's 61, not quite old enough for social security, but retired last year anyhow. Found that he missed the horse and farrier crowd so like me he's back doing 5-10 per week, but doesn't need to. His IRAs and rentals etc. carry him well. It works with planning.

I remember some years back, Bob Scradzio telling me that he felt when a person retired they should live as well as they ever had. He said he could do that because he'd gone out and gotten good advice.

The problem is that the market just doesn't care what you need or want. It's a matter of supply, demand and perceived value. The Amish shoe a horse for $35 but the owner of a long footed show horse or a jumper wintering in Florida might pay $350 for a reset.

Where I live, you compete with the Amish and rural part timers and aren't going to get much more than $20 for a trim regardless of what you need or want.

Personally, I'd rather do the show horses for $350 and I'm not telling anybody what I need.

Charge as much as the market will bear.

It's interesting to talk about profit "margin" and that's a good way to compare one job, account or area to another but what really matter is total profit. Making a profit margin of 1000% doesn't do you any good if your market share is so small that you only make $1000/year. Sitting at home wishing you had work doesn't net you anything at all.

So it's all about the market. We aren't dealing with one market but many...different areas, different types of horses and different types of clients.

Mike Ferrara wrote:
Very true Mike. I used to fret about going to do a couple of trims 50 miles away. I figured $76 gross, less .55 per mile ($55) leaving me $21 dollars for 3 hours. Hardly a living wage. BUT, alot of that $55 calculated is spent even if your truck/car sits in the driveway ( insurance, depreciation, etc ) So at then REAL end of the day my net for those 3 hours is $76 less gas and some really minor stuff like a little wear and tear. Plus a $55 dollar expense writeoff for travel. A much greater profit than sitting home on my arse for 3 hours, of going out spending money.

I understand Esco's point, but I look at it your way Mike.

Regards

Western Hill Forge wrote:
Yes. I understand Esco's point too but he left out quite a bit.

I agree with Mike.

Demographics plays the biggest role in "how much you can make."

Some areas, even when there is a very high horse-per-mile density, just will not support a full time farrier business at a realistic living wage - with retirement and health benefits.

There was a horse owner complaining over on COTH that there were no farriers in her area that were worth paying the extra $45 it cost on top of the trim price for a full set of shoes. She seemed to think that was a huge amount of money. I think she explained pretty well why there weren't any decent farriers in her sand pile.

Mike Ferrara wrote:
Bingo! 100% agree with that.

But for all the reasons you can find to refute Esco's reasoning, what he is trying to say is that sound business planning is the map to where you will end up. 'If you fail to plan, you plan to fail'

I think having a plan is important because of the process you go through in creating it - you look at your areas' demographics, what the market will bear, what you want in return for your efforts, etc. If the maths doesn't add up, then you can look at ways to rectify that. You can make informed choices, make changes or continue on as you would have before with clarity of purpose.

It's futile to look back after 20 years slogging away thinking you were getting somewhere but in reality have nothing and your body's stuffed to boot - you can't go back and change things then. It's much more fun to play 'what ifs' on paper, you can scrub it out and try again.

tbloomer wrote:
Agreed; what we NEED to charge; and what we CAN charge are two different things; and with this economy; it is just getting worst.
And now they almost raised the taxes on the small business owner; if they hadn't extented the Bush tax cuts for the next two years.

We are now "down!" to $10 a trim; and $28 for 4 new shoes with drill tec from some of the Amish in S. Chester co. where I live. Price wars between the amish here now.


linda muggleworth

Rachael Kane wrote:Nothing wrong with Esco's reasoning in regards to the topic he covered.

He certainly did not cover the "business plan" and the "marketing plan" aspects of starting and running a business.

The FIRST THING in the business plan should be an investigation and feasibility study. This would answer questions like, "What kind of farrier practice do I want to develop?" and "Will the area I intend to service support the level of income I want to make?" 'nuther words one should learn the demographics BEFORE hanging a shingle.

If you've been in the business for a while, then you ought to have a "feeling" for the demographics - "what the market will bear."

If you decide that in the future you want to earn more than your market will bear, the you may want to include plans to eventually move to a different area, commute longer distances, or expand and diversify into other areas of income.

ladyblacksmith wrote:WOW!

Chester County Farrier Associates must be devastated by this competition.

Perhaps the most important part of the article is to get us to understand exactly what our expenses are, so that we will make informed decisions in trying to control them.

Regards