While many questions regarding the Coronavirus pandemic remain unanswered, and with a stock market experiencing extreme volatility, there is continued uncertainty as to what could happen in our industry over the next few years. But many people in the industry have been through such ambiguity before. We sought the advice of industry leaders who successfully made their way through the Great Recession of 2008, and we asked what they learned from it and how they will use their experiences to guide them through the coming years.
CRAIG BANDOROFF, Denali Stud
Honestly, I think the biggest thing is to control your expenses. I had a client once, Herb Moelis, who was one of the smartest guys I had the pleasure to work with. He once told me a dollar you save is no different than the dollar you earn.
Probably the only thing Obama's Chief of Staff, Raul Emanuel, said that I would have agreed with is this: “Never let a good crisis go to waste.” I tried to instill that culture of watching all expenses in my company and my team. I hoped that if I harped on it continuously, they'd adopt it. By adopting these practices in your company in difficult times, you then carry them over to times when you are not in a crisis. They become a standard for the way you operate all the time.
As an owner, you hate to see waste. You have to make your team understand that everything matters. During the 2008 crisis, we made some operational changes that saved money but didn't impact the care or well-being of the horses. Two of the biggest changes being going to pelleted feed for mares, weanlings, and yearlings (before sales prep season) and bedding on round bale grass bedding. It's hard to control your costs because they constantly go up and in times like these, you know you can't pass them on. So the other key is to operate with efficiency. Make do with less, work smarter.
Finally, you hope to be in a position to take advantage of any market downturn and purchase quality mares and shares. I watched several very smart people do that. It requires a long-term outlook and especially a level of confidence that not everyone has.
Pretty basic stuff. I'm not sure there is a secret sauce. Just operate smart and hunker down. As your Grandmother said, “this too shall pass.”