Television, radio, Internet and print news reports have been feeding us a slurry of bad news regarding the economy for the U.S., Canada and many parts of the world. Lately, I've resisted channel surfing or page turning to avoid adding more worry to my life. It's no secret that bad news outsells good news. I'm sure news professionals will continue to look for the worst news for the greatest emotional impact for their stories.
But, relying on the talking heads for your sole source of economic news is dangerous business. It's like believing everything you hear while standing near the rail at a horse show. Fact and fiction get mixed.
Motivated by the chatter about a weak economy and a recession in the headlines of many trade publications, I called three professionals in the industry this week to get their read on the health of the economy in the equine world.
I asked horse industry business writer Lisa Munniksma her opinion on how the U.S. horse industry is doing in these darker times of high priced fuel, soaring hay and grain costs and rising bedding costs.
Lisa told me of her recent visit to the Hoosier Horse Fair (Indiana). " I was shocked", she said. "It was not what I expected at all. It was the busiest it's been in the past few years." Lisa helped a friend, who is a trainer, with a promotional booth at the event. Her friend signed two new customers while exhibiting.
However, Munniksma cautions business owners to continuously work at keeping their names and brands front-of-mind with their customers and prospects during these tougher economic times.
Seth Burgess , founder of Equimax a national horse industry employment service based in Texas, noticed a big downturn in business in November of 2007. The following months were better, but still showed lower business volumes per month compared with the same months of the previous year.
Burgess believes many horse business owners will "ride this out" when referring to the economic downturn. He theorizes that many professional horsemen have enough financial business strength to make up cash short falls for a period of months before they have to make major changes to correct a downward business trend.
Christy Landwehr, Executive Director of The Certified Horsemanship Association, (CHA) lives in Colorado but travels frequently to Lexington, KY to the CHA office. Christy reports good news from her perspective as she has not seen a decrease in CHA membership (fee based) or a decrease in attendance at CHA instructor certification clinics around the country.
She admits that all is not rosy in Horseville, especially the pain brought about with runaway fuel prices. Record high fuel costs are prompting trail riders in her home state to ride locally in the plains instead of hauling their horses to ride in the more picturesque mountains.
Landwehr is a part time riding instructor and mentioned one of her haul-in students has asked her to travel to her farm rather than hauling her horse to Christy. The student opts to pay Landwehr a travel charge rather than burn $ 4.40 per gallon diesel fuel.
Although far from scientific, my conversations this week reinforced what I had theorized. Rising fuel, hay, grain and bedding prices will be taking a bite out of many bottom lines until horsemen raise prices. While a business can't be recession proof just like a horse can't be bomb proof, you can take steps with your business to reduce the probability of lower earnings in tough times and accelerate your earnings in the good times.
1 Market your business methodically year round. Create a marketing calendar specifically for your business at the beginning of each year and follow the plan.
2. Distance yourself from the idea that you have to be the "low cost provider" or can compete on price only. You know you can't supply quality goods and services at a low price. Isn't it always better to sell quality at a slightly higher price than battle with bargain hunters demanding top level service at Wal*Mart prices?
3. Review and improve your customer service. Much of the value of service is perceived in the mind of the customer. Deliver superior service that helps your clients feel better about the rising fee increases they will be seeing. Remember, most purchase decisions are made by emotion (feelings) and justified later with logic.
No question we'll see some tougher times in 2008. But that's part of the business cycle; be prepared to ride through it.