Your farrier finishes shoeing your horse and hands you a bill for the work. You look at the bill, muster a smile, and grab your checkbook even though you may be thinking, 'A set of horseshoes costs about $15 and he spent less than an hour putting them on. Why is the bill so much?'
Pat Broadus, who cares for the feet of many elite stakes horses, has been tracking his business expenses for seven years to determine just how much it costs him to shoe a single horse. He compiled his total business expenses for each year and then divided them by the number of horses he cared for during that time. Broadus collaborated on the project with Danvers Child, a top dressage horse farrier, and they presented their findings at the recent Forge of July farriers clinic in Shelbyville, Ky.
Broadus emphasized to farriers that the line items on the list were expenses required for his specific business, so they have to look at their own expenses to judge if the prices they charge are enough to provide them adequate income.
Broadus said most people, even farriers, don't realize that an average farrier's career is limited to about 25 years before he or she is physically unable to do the job any longer. The first ten years is spent struggling to establish a good reputation and a good business, either by developing his own client base or apprenticing with a respected farrier before going out on his own.
“Once that happens, you have about a 15-year run where you can make good money and work for top clients and your body is good,” Broadus said. “Then after that 15-year run, you have a good name but your body starts failing. Danvers and I figured it out, and you have about a 15-year run to make about 60 percent of the money that you're going to earn in the lifetime of shoeing horses.
“But once they get to making the money, they don't put away money for retirement and they don't take care of themselves. Then, all of a sudden they look up and their bodies start failing them and they're in trouble.”
He said farriers don't take into consideration little things, such as using 75cents worth of fly spray on each horse, the cost of nails that are lost or bent when a horse stomps its foot, cell phone charges, paper towels, superglue, drill bits and other miscellaneous items. The cost of good public relations may not occur to him are business expenses. He gave this example:
“You're driving to a barn and you know a guy's been there working all day, and he's going to be there to help you. To make him happy, you stop and grab him a sandwich. That is truly a cost of doing business. And if you do that three times a week, now you are up to $20.”
Larger expenses include multiple forms of health and business insurance, maintaining an inventory of shoes on his truck, and purchase and maintenance of the truck and farrier rig, which is a considerable expense. Racetrack farriers' clients are centrally located at the track, but farm farriers must spend much of their time and money each day driving from farm to farm.
“They've worked themselves to death and they've driven all over, and they've spent $60 in fuel and another $20 in fuel for their propane tank, and they've only shod seven or eight horses,” he said.
Per Broadus' calculations, it costs him $114.20 to shoe a horse. This is strictly the expense involved. It doesn't include the cost of continuing education, retirement contributions, the value of his skill and labor, and the profit necessary to afford him a livable income. Broadus added that most business models recommend building a 30 percent profit into the client charge.
He said many farriers don't realize they aren't charging enough.
“They've earned all this money and they're charging what they think is a good price for shoeing horses, but at the end of the month they're out of money and there's still month left because they don't know what it truly costs for them to shoe a horse.
“I'm laying it out, and I'm not telling farriers this is what it costs them to shoe a horse. Don't take these numbers and say, 'Ah, that's bull.' Be true to yourself—what you truly spend. I think you're going to be shocked.”
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