Newsletter: Farrier Industry Report | September 2008

The R Word ... Recession, It's Time to Revisit It | by Rick Segel
For the longest time my approach or attitude toward recessions or economic slowdowns was to strengthen your own business and understand that during the worst of times there is always someone doing business. All I ever wanted was to be that business. I still believe that but with the rapid increase in gasoline prices and the stock market officially falling into a bear market (20% drop from the high), it's time to perhaps readjust our thinking.

First, for all of the newer business owners, Recessions happen regularly. Actually, we have one about every 8 to 9 years. There has never been a decade without one. Having said that, we must also remember that all recessions do come to an end. The normal length of a recession is 1 to 2 years. However considering that housing and fuel are involved, the cornerstone of most economies, plan on this one to stretch to the 1 to 3 year time frame.

All Recessions have a few things in common: Businesses go out of business. I can't make that sound any better but the trick is to not be one of them. (That's the purpose for this piece.) Your sales will decline. BUT that doesn't mean you will make less money. Many businesses make even more money because they cut the fat from their budgets. Credit will tighten up and your vendors will need to collect their receivables more diligently because they’re afraid of the business failures and don't want to be stuck with worthless debt.

That opens the first opportunity: Vendors need and worry about their cash flow, so now is the time you can negotiate much better terms for prompt or early payments. Even if you owe a vendor money, don't be afraid to ask for a discount if you pay an invoice early.

Next opportunity: When business is good people flock to open businesses. Many of these businesses don't know how to operate during slow downs and these are the businesses that close first. The jerk that loves to advertise that they are the cheapest in the town will not be able to sustain any type of slow down and they will be gone. That means you have a little less competition to worry about.

Kenny Rogers, in his song the Gambler, said that "we have to know when to hold them and when to fold them." That means cut your losses as early as possible. A great idea during good times might just be a bad during a recession. Another way to put it might be "when the horse is dead, get off it". Your first loss is the best loss.

It's time to refocus every employee toward sales and marketing. Making sales and add-on sales are the heart beat of a business during times like these. Everyone is a salesperson, from the high school kids, to the bookkeeper, to the person who vacuums the floor. Everybody is selling. Some times it's as simple as pointing to a piece of merchandise in front of the customer and saying "did you see this?" It might just add an extra sale a day.

Think about how your customers' attitudes have changed. They believe that every retail store is hurting because of the economy. Because of that, the "promotable" item is even more important.Always have some type of special or promotion. This is also a great time to start sending out coupons. They work and more and more businesses are making them part of their marketing plans. Where would Bed, Bath and Beyond be without their coupons? But that's only one of many. Make the coupon easy to understand and always have an expiration date.

This is also the time to reevaluate every expense you have. Expenses that work in strong times are extravagant during slow times. That also means be careful with your buying as well. Buy from companies that can fill reorders quickly. It is better to have a vendor inventory the extra merchandise than you having it in inventory. Inventory costs money. After all we do 80% of our business with 20% of our inventory. Let's work to make our inventories more efficient.

Lastly, during normal business conditions we have 3 categories of customers: High End, The Middle Class, and the Economy Buyer. The High End and the Economy Buyer stay intact but the middle of the road buyer leaves the middle for either The High End or Economy. Obviously, the Economy category increases more but High End Buyers also increase. That customer might not buy as much but feels more comfortable in the higher class. The problem that many businesses get into is trying to attract the Economy Buyer. That is a slippery slope to tackle because the competition is more intense. Many successful specialty retailers have traded up over the years into better merchandise for this very reason.

Be the best at something and customers will follow. Remember the words of my college Economics Professor who told me that when everyone finally accepts that we are in a recession is when the economy has already started to heal. It might just be almost over but I'm not an economist. All I know is that there is always someone doing business and I want it to be you.

Reprinted with permission from Rick Segel & Associates, LLC, 543 Davinci Pass, Poinciana, FL, Phone (800) 814-9995, www.ricksegel.com.

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Board of Directors
Your Board of Directors is busy working on budgets and changing our fiscal year. In the past FIA membership has always been on a calendar year but our fiscal year has not. Your Board recently voted to change our fiscal year to a calendar year. This will enable FIA to better plan its resource allocation as the dues monies and the MarketPlace monies will be collected in the first quarter of each new fiscal year. Budgets are currently being worked on and a full report will be presented at the members meeting during the MarketPlace.

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Letter from the President
Here it is the dog days of August, but it won’t be long until Fall will be in the air. There is something else in the air right now and that is excitement. If you’ve had the opportunity to talk to one of your elected officers, board members, or committee chairs recently, I’m sure you couldn’t help but pick up on that feeling.

This excitement is the exhilarating feeling of the FIA beginning its rise to the next level. This rise is due to the same people mentioned above, the folks you elected to represent you. They spend a good part of their workday working for you. The work and enthusiasm they are putting forth is really starting to payoff.

Have you checked out the revamped Web site www.farrierindustry.org? You need too. Check out the Tackroom Spotlight on the home page—what a great marketing opportunity. How about that full-page color ad in the American Farriers Journal—did you see it? It will run in the Professional Farrier as well.

Advertising our association, what a concept!

Talk about advertising concepts, the FIA and AFA have been working together in an unprecedented way to promote the Convention in Chattanooga, including the FIA MarketPlace. And speaking of the MarketPlace–wait until you see what great and innovative ideas the MarketPlace committee has come up with to make this the most memorable show ever.

Membership benefits continue to increase as we embark on a full-scale membership drive to increase our numbers.

All of this along with a more pro-active management firm; it’s hard not to get jazzed about the FIA’s future. Yes, these are exciting times for the FIA; take a look around at the things that are happening.

Bob Bachen
President, Farrier Industry Association

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MarketPlace Committee Report
The MarketPlace committee has been working hard on making the 2009 MarketPlace the best yet. We have been working very closely with the FIA and AFA marketing committees to advertise and promote 2009 like never before. To help advertise, those of you with store fronts will soon be receiving posters and stuffers while postcards will be sent to nearly 5,000 names.

Our committee, other committee chairs, AFA and FIA Board members have all put forth much effort to bring you the following 1st time offerings for 2009:

• The FIA will host "Refreshments for Exhibitors" during move-in on Wednesday from 2-4 p.m.
• Provide lunch for all attendees during MarketPlace hours on Friday from 11:30 a.m. until 1:30 p.m. 95% of MarketPlace hours occur when no other activities are scheduled.
• A two hour Vendor Only Session.
• "Saturday Only Representatives". This will allow a select group of vendors to a "display only booth," i.e. breed affiliations, feed manufacturers, etc.

The registration packets will be sent September 23rd.

This year we have instituted a priority point system which will allow our long time supporters to have priority on booth choices. All members who meet the November 3rd deadline (in order for the priority points to be used as a basis for assigning the space) will be assigned space and notified in the early part of November. All booth requests received after November 3rd will be assigned on a first come, first served basis.

If you have any questions or concerns, please do not hesitate to call either of us.

Emily Schwarz Bull
(803) 685-5101
emily@monettafarrier.com

Marguerite Page
(866) 668-7642 ext. 126
marguerite@capewellhorsenails.com

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Marketing Committee Report
Your marketing committee has been hard at work promoting the association and its members. Our newly designed website www.farrierindustry.org has several new features, including an opportunity for all members to showcase a product and an events section to promote your clinic or open house. Those interested can contact our association office for more details. All of you recently received stickers that identify your business as a member of the FIA. The advertisement currently running in industry trade magazines encourages farriers to look for this logo as an assurance that they are dealing with a reputable, knowledgeable supplier. This logo is also available in a digital format for use in your advertisements, stationary and other promotional items. We will continue expanding this marketing campaign to drive more business to our members. In an effort to increase attendance at our annual FIA tradeshow, we have formed a joint FIA/AFA convention marketing committee for the upcoming Chattanooga convention. You will be receiving posters and flyers promoting this event, and we ask that the posters be placed in a prominent place and that you include the flyers in mailings and shipments to your farrier customers. In closing, the marketing committee continues to look for new ways to promote our member companies and ultimately provide value to your membership. We encourage your comments and suggestions!  

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FIA Priority Points and Deadline
In an effort to assist all FIA exhibitors and to reward those companies who have demonstrated their loyalty to FIA, we are pleased to announce our new priority points system for assigning booth space.

Effective with the 2009 MarketPlace, exhibitors will be assigned a booth based on their priority number, once we receive a signed contract and payment prior to the deadline November 3, 2008.

Priority points were assigned to all previous exhibitors who participated in any of the last six MarketPlace tradeshows. Five points were awarded for each year of participation. In addition, one point was added for every 100 square feet of exhibit space purchased (one 10x10 booth).

So, an exhibitor who has been with us for 5 years and has taken 2 booths has 35 points (25 + 10).

As there will certainly be some exhibitors with the same priority number, we will use the date the contract and payment were received as a tie breaker.