Don't Look Back

The good stuff is hiding at the bottom. Stir the pot.

Early in my career, one of my mentors would often ask me, "So how's business this week?"
 
And I would regularly answer,  "Quiet."
 
He would reply emphatically, "Then stir the pot!"
 
I wasn't in the restaurant business, but I understood the intent of his message.
 
Think about stirring, an essential to the cooking process.  The benefits of stirring:

 

• Accelerates heating
• Blends for better taste
• Eliminates separation
• Prevents burning
• Sends an aromatic message to diners

 
Stirring, aside from cooking, is also a necessity to:
 

• Allow settled pigment to create color in the paint can
• Keep concrete from setting on the mixer truck
• Get sales from your prospects and existing and past customers

 
I managed to pass high school physics, but don't remember much about the subject other than what Isaac Newton said,

 

"An object at rest tends to stay at rest and an object in motion tends to stay in motion with the same speed and in the same direction unless acted upon by an unbalanced force."

You are a force (perhaps unbalanced) that stirs the pot of possibilities for your business. 

Are you stirring the pot by: 

 

·        Making telephone calls to prospects  
·        Mailing post cards
·        Send a printed or electronic newsletter
·        Maintaining a website
·        Speaking publicly
·        Offering demonstrations
·        ress releases about your bususiness
·        Writing articles for publication
·        Blogging
·        Sending hand written thank you notes
·        Asking for referrals
 

Think about your business relationships with people who provide services and products for you.  Aren't you doing the most business with the folks who maintain regular contact with you? 

 They call you, send you flyers and sale notices, e-mail you and perhaps call on you.  You see them in the community at the soccer game, charity fund raiser or at church.  They are present and available and stirring their pots for increased sales.

I get results whenever I send out my electronic newsletter, make a quick phone call to follow up or check in or present a talk or workshop.  It works for me and it will work for you, too!

If you don't stir your pot, "No soup for you!"

Do You Set Prices LIke Farmer Bill?

• There is an old story about pricing that you may have already heard.  It makes an important point about how some business owners think about pricing. It goes like this:

  Farmer Bill, stopped at the local diner for lunch and parked his truck, loaded to the max with baled hay, next to the front door.   At the diner counter he was seated next to the local hardware store owner, a prosperous businessman. 

  The businessman asked him where all of the hay was going. 

Bill answered, "I'm delivering it to Smith's for  $ 2.50 a bale.  I buy it downstate and truck it to here for sale and delivery."

 

"Wow, $ 2.50 is a good price", the hardware store owner says, "How much do you pay downstate for it?"

  

 

Farmer Bill replies, "$ 2.50 a bale"

 

"Buy for $ 2.50, Sell for 2.50!  You can't make any money doing that!"

 

"I know that, I've got to get a bigger truck."

Too often, I talk with professional horsemen who have profit margins similar to Farmer Bill's. 

They ignore their operating costs and price boarding lessons and training based on the "going rate" or slightly less because they are fearful about losing business or not getting enough business.

As mentioned in last week's newsletter, your escalated expense for hay, feed and bedding need to be offset with a price increase.  If you've already adjusted for this in your boarding, lesson and training fees, pat yourself on the back.

DB in New Jersey wrote:  "I have found if clients are given a 2 month notice they know what to expect. Also, a brief note about the increases in costs to maintain horses for their lesson.

I've only had trouble when one client who did not get the notice. Nobody likes a surprise. In addition - we commented, "as much as we disliked raising our rates, we dislike the question that suggests an alternative even more - can we afford to continue to do this? "

 

MP in Ohio wrote:  Boy you hit the nail on the head with your comments about increased costs vs. not increasing your fees.    

 

Having crossed this bridge before, I have come to understand that most single horse owners are clueless as to how expensive it is for the barn owner and they assume they are being gouged.  So I made up a simple spread sheet of what everything cost last year vs. this year to show them just how much it cost me to maintain their horse for them. 

 

I then explained I was in business not charity and that to stay in business and to continue providing the stellar care they all loved so much they would need to absorb the additional costs.

 

Once people realize how little is made on (if at all) a boarding operation the increase seemed more bearable to them.

     

 

JB wrote: Just a note to say thank you for the newsletter and for discussing this horrible state of inflation. 

 

Thank goodness I have a boarder that insisted I raise my rates last fall and she told the other boarders this is "what she has to do, or she will be out of business".

 

In addition to the comments above, here are things to consider when increasing prices:

·         Unlike Farmer Bill, you can't make it up with volume

·         Your clients are sympathetic to your increased costs of doing business

·         Small increases each year are much easier than huge jumps after years of unchanged prices

·         The fees don't have to end in 5 or 0.  Examples: board can go from $325 to $347, group lesson rate from $ 30 to $ 34

·         Long term clients don't need special consideration with discounts.  The flip side is that you've given them good service and loyalty for years as well

·         Give reasonable notice; surprises about money aren't welcome

·         Experience has proven after a reasonable increase in fees for services, the only clients that leave are those you are happy to lose

If you're in business, remember, the purpose of a business is to make a profit.  Adjust your fees to compensate for increased costs of doing business.

Indoor Riding Arenas- Risk and Reward?

Picture this scene. Bright sunshine, clear blue skies, shirt sleeve riding conditions, clippety clop, clippety clop, not a problem in the world for horse or rider. All of us have ridden on perfect weather days and there is no better scene for enjoying horses.

The problem is that in most parts of the world, there aren’t enough of those perfect weather days. Weather and a busy professional horseman are often in conflict with each other. Scorching sun, bitter cold, rain, snow, mud and fierce winds can severely limit the number of days to make money with horses with training, riding lessons or attracting customers to your boarding facility.

A day lost due to bad weather is lost money for the professional horseman. That window of time to generate income for your professional services is gone forever. Sure, you can “make it up" another day, but that means you lose a day off or you have to work long hours the following days to recover the income.

The solution for those horsemen who are always fighting the weather is to build an indoor riding arena for bad weather and early morning and after dark work. I can hear some readers thinking, yes but, GASP, I can’t afford it!

My answer to that comment is a question. Is it possible that you can’t afford not to have an indoor arena?

I am the first to admit that every personal financial situation is different, but for the sake of simplicity let’s consider the following example:

You have $5000 to put toward construction of an $80,000 indoor riding arena with not too many frills other than a roof, four walls and proper footing and lighting.

You borrow conventionally, or creatively, $75,000 at 6.5% interest to be repaid monthly over 15 years. The monthly payment is $653 per month.

Let’s ignore additional real estate tax, insurance, utilities and maintenance expenses because they will vary by location; please don’t forget to include these expenses in your personal calculations in making your investment decisions.

Now, calculate how much horse training and riding lesson income you lose annually due to bad weather and not being able to work before light or after dark. How does that loss on a monthly basis compare with all of the costs of having an indoor arena? You may be surprised with the results. Could the lost revenue due to weather pay for the indoor arena?

I talked with Pete Rohring, owner of Parco Building Systems over coffee last week. He’s been building barns and arenas for over 25 years and had some tips and considerations for building indoor arenas.

• Find out if your builder carries builders risk insurance coverage for the structure during the construction process. Wind damage to partially complete structures is the most common culprit for building damages. If the builder doesn’t offer it, look into getting your own coverage.
• Door openings large enough to drive a hay wagon through are important for ventilation and getting things that need to stay dry out of the weather in a hurry.
• A 36” wide service door is handy for people to move in and out without disturbing riders and horses by opening large doors. A four foot wide sliding door for walking horses in and out and saves large door opening time, too.
• A ¾” plywood liner built on a taper to protect riders legs and steel walls is a nice touch
• A roof vent on the ridge helps keep air moving and minimize condensation. Consider roof insulation for condensation control and noise reduction during heavy rainfall.
• Natural light provided through skylight roof panels is nice but consider the potential for leaks and shadows and sunspots on the arena footing from skylights. Eave light panels in sidewalls are efficient and lower maintenance.
• Overhangs (minimum 16”) create shadow lines on the exterior for architectural appeal and also keep snow and rain away from the building sidewalls.
• Don’t forget ice guards for northern climates.
• Good lighting is important. Talk to experts in lighting commercial buildings.
• Base Footing should be well-compacted and surface footing selected for dust control.

Put that pencil and calculator to work some evening and do indoor work on how you might be able to do more “indoor work.”

 

Making Money in the Horse Boarding Business

We still have a few seats available in the Horse Boarding Business Teleseminar starting tonight.

Find out more and how to register here: 

http://www.inspiredbyhorses.com/workshop.html 

$79.00 investment that will pay off huge returns for your business!

Putting A Curb Chain On Spending-A Big Mistake Some Horse Business Owners Make

Your parents, early mentors and former bosses probably influenced your position on cutting expenses in the home and in business more than anyone.  It's certainly the case for me.

 As a result, when expressions like belt tightening, expense slashing and austerity are tossed about in headlines and by TV news readers, you think about the buckets of advice thrown at and on you in your wonder years. 

As business owners and managers, our gut reaction is to focus on actions like turning lights off, saving copy paper and rationing paper clips. We go into a minimalist mind set pondering the question: What else can I cut back on to maintain positive cash flow?
 
I want to shout CAUTION if you think slashing advertising and marketing expenses as you retreat and hunker down to reduce operating expenses is good strategy.  Because if you do, you're wrong.  It may have been okay in Grandpa's days, but today it's a false saving.
 
Why?
 
Because the economy will improve.
 
And when it does, don't you want to be the first person your clients and prospects think of when it comes to your niche in the horse industry?
 
The cliché out of sight is out of mind holds true when it comes to your sphere of influence-the people with whom you have worked so hard to build business relationships.
 
An ongoing marketing program is essential for a business to survive this downturn and thrive when things improve.   If you decide to scale back your business operations, please don't shrink your presence in your market area.
 
If you do, your clients and prospects will begin to lose touch with you and what you're doing.  They may wonder if you are going out of business or are no longer the go to person in your specialty. 
 
Use the telephone, e-mail and your website to maintain fresh dialogue.  Maintain your post card programs, press releases, newsletters, article writing, public speaking and free clinics or demonstrations.  Your marketing program doesn't need to include a huge advertising allowance, you just need to keep telling your story to everyone who will listen.
 
Be easy to find in both good and bad economies.  Don't worry about a little energy cost as you keep the spot light on you and your business, because the show will go on.

You Earned It; Now Go Collect It!

From the  Horseman's Dictionary
 
Broke (brok)-1. a well trained horse
2. A chronic financial condition of a professional horseman who has too many slow paying clients
 
Even during good economic times, some clients are not responsible about making timely payments for board, training and lessons.  During tougher times like these, even more clients can be slooooooow about paying your bill and use a tight economy as a shaky excuse.
 
The truth is not everyone has lost his job and sources of income.  Granted, IRA's and 401-K's have taken substantial investment battle damage and property values have dipped in certain areas of the country, but most people are working at the same jobs collecting the same pay checks and unless they need to sell their houses tomorrow, haven't lost equity.  The price of fuel has temporarily halved and food prices have stabilized.
 
Fear has replaced confidence and cast a cloud searching for a silver lining over the world economy.  But, for most of your clients, even though they may be fearful and second guessing their commitments to horses, their ability to pay has not been affected.
 
So, if you are offered lame excuses for slow pay and no pay, do not accept them.
 
Here are some tips for collecting receivables:
 

• If the board or training bill is due on the first of the month, then be adamant that you get paid on or before the first.

• Be firm about late fees.  I know that some of your clients are "friends" but would a true friend put financial strain on your business by not paying promptly?

• A face to face conversation about unpaid bills is best.  A telephone call is next in successful results.  A mailed late notice or e-mail is marginally effective.

• When asking for payment for a delinquent account, be polite but firm.  After hearing excuses for late payment simply say, "Yes. Will you be paying me today?  If not in full, how much will you be paying today and when will you pay the rest?

• Don't worry about alienating customers who do not pay on time. If they don't want to pay, they can move to your competitors and not pay them.

 
You may lose some clients with a tighter payment policy.  But, you'll replace them with clients who understand your expectations and respect you as a business owner.  They are the best clients in the world and as long as you deliver excellent service, they'll continue to appreciate and support you

Negotiating With the Power of Silence

Can't you do any better on the pricing?” the prospect drawled slowly. My mind raced through the possibilities: $ 100 off, 5% off, 30 day terms or maybe even 10% off. What to do I questioned over and over in my mind over the duration of just a few seconds. And then I remembered the power of "the silence technique"

With great conviction and a calm voice I said, “No, the prices I gave you are my best prices."

At that point I was done talking. I was afflicted with temporary lockjaw until the prospect reacted to my firm stand. The silence of dead air was paralyzing while I waited for what seemed to be an eternity for my sales prospect to respond.

And, eventually he did respond. “Okay, I'll take it", he consented.

The "He who speaks first loses" technique of negotiating had worked once again!

A coworker introduced this negotiating technique to me some time ago. In simple language: present your price offer for an item and then shut up. Shut up means: no talking, silence, bite a hole through your lip if you have to, but calmly wait for the buyer or seller's response.

You see, in North American society, silence is an uncomfortable element in a conversation. We cannot tolerate "dead air".  A result of too much radio and TV listening and viewing, the lack of sound has conditioned us to believe something is wrong.

The radio station must have stopped broadcasting. The television station has a transmission problem. Things are broken because there is silence.

And this is the way society has evolved into evaluating conversations. If the dialogue stops, if there is dead air, then something is wrong or it's broken. As you talk business and put an offer or counter offer in front of the buyer or seller, a silence or lack of response, will make you automatically think "It's not working, I've got to sweeten the deal" and you break the silence and begin talking.

Silence is Powerful! Never assume silence is a form of rejection. It's a signal of thought taking place, nothing more. It's a waiting game for decisions. The impatient negotiator who makes concessions before hearing a response from the opposing buyer or seller is bidding in an auction with himself. He will never know that he would have had a deal with his first offer if he'd just waited a few more seconds.

As you negotiate for price and terms in any type of sale or purchase, keep in mind the power of silence. Begin to test your capacity to feel uncomfortable with awkward silence in a conversation. Resist the temptation to play traditional negotiating tennis by returning each verbal volley immediately.

Let silence be your invisible negotiating team.

Mamma Was Wrong About Running With Scissors

Mamma, just like her Mamma, reminded all of us never to run with scissors, knives or any sharp objects. 

It's good motherly advice to heed and pass on to the next generation.  Presumably, this advice has saved countless injuries to children and obedient adults.   

 

But, Mama forgot to tell us about running with dull objects.  They too, are just as dangerous to your personal health.  Dull objects take many forms as both animate and inanimate objects. 

 

You'd never run with scissors, but are you guilty of running, figuratively speaking, with dull items like these?

 

• Dull Riding Lessons

• Dull Advertising and Offers

• Dull Friends

• Dull Clients

• Dull buildings and ground

• Dull summer riding camps

• Dull clothing

• Dull business models

• Dull clinics

• Dull conversations

 

If you said yes to any of the above, you're normal.  Everybody falls into the dull rut from time to time.  But, dullness doesn't have to be a chronic condition, either.  If you are getting my point, then consider:

 

Dull Businesses deliver Dull Profits.

 

Escaping the dull-drums is not difficult, but the sharpening process relies on you to furnish the energy to liven things up.

 

Personal tips to reduce dullardism:

 

• Walk faster
• Ask Why?  more often
• Daydream
• Vary your speaking volume and pace
• Use gestures
• Dress like a winner
• Read a novel on the best seller list
• Avoid cluster discussions about gas mileage and the price of gas
• Add spice or hot sauce to your daily regimen as needed
• Improve your posture
• Smile often

 

Professional tips to defeat dull:

 

• Have a client appreciation event
• Apply a fresh coat of paint to stale walls
• Talk frequently about industry issues with other professionals
• Attend a national level horse show or conference involving your discipline (s)
• Volunteer to help industry organizations as a committee chairman or director
• Be a contrarian
• Be the social director organizing cocktail parties, dinners and excursions for prospects and clients
• Memorize a funny story or joke to tell when and where appropriate
• Schedule days off work and take them
• Speak less often-listen more often-the world is desperate for the brilliance of a good listener

 

Being dull is comfortable, but it generally does not pay well.  If you think about  the successful people in the horse business and other businesses, dull is not part of their personality description.

 

I suspect successful people, as kids, were scissors runners.

 

As successful adults, they not only run with sharp objects, they juggle several at a time.

 

 

 

 

Sit Deep In The Saddle for Good Business

"Sit deep in the saddle!", my riding instructor shouted long ago.
 
"Huh?  Sit deep! This ain't no Lazy-Boy recliner, It's a bouncing rock! It's all I can do to maintain my balance", I whispered to myself.
 
You may have had the same thoughts when you were first learning how to ride, too.
 
And then one day, you got it.
 
It all began to make sense.  Sitting deep is an abstract concept as well as a literal concept.
 
Literally, it means eliminate that bouncing and being in synch with your horse.
 
In an abstract sense it means:
 

• You are balanced
• You have good posture and image
• You have confidence and a good attitude
• You enjoy a sense of "knowing" and maintain contact and connections

  
And aren't those items the traits that successful business people have in common?
 
Leading your business through this uncertain economic time calls for sitting deep in the saddle for your business.  When you sit deep and tall you are:
 

• Maintaining contact with clients and your suppliers
• Reinforcing positive attitudes for employees
• Living your mission to achieve your goals
• Projecting your image of strong character and opening opportunities for success

  
When you are sloppy seated you are:
 

• Attracting criticism from others
• Unbalanced with your business vision
• Holding your team back and letting your clients down
• Inviting a premature invitation to exit the business

When challenged with days in business that make you want to let loose with a primal scream, remember the basics. 
 
Sit deep, focus and keep smiling.

Horse Boarding Business Teleseminar

If you are in the horse boarding business now or are considering starting one, you'll want to check out the Horse Boarding BusinessTeleseminar seasoned horse business expert Maureen Gallatin and I have teamed up to deliver starting on Tuesday Feb. 17, 2009. 

It's no longer business as usual in 2009 and the horse industry is not insulated from the economic downturn.  We'll be talking about where your business fits in a special niche and what the financial snapshot of your boarding operation looks like.

Maureen and I recorded a 30 minute discussion about the horse boarding business today available here.

Details of the seminar are available here.

We're looking forward to having you join us on the call.