Small Business DNA

How a Horse Marketing Agency Pivoted During COVID Helped by Credit from Fundbox

September 09, 2020 Masterworks Creative: Tami Johnson and Marv Johnson Season 1 Episode 5
Small Business DNA
How a Horse Marketing Agency Pivoted During COVID Helped by Credit from Fundbox
Show Notes Transcript

This is a story about small business resilience in the wake of the economic and logistical impacts of COVID-19. Masterworks Creative is a digital marketing agency, based in Ocala, Florida, that has a unique focus on horses. Specializing in equine marketing for over 30 years, proprietors Tami and Marv Johnson share their experiences and insights at how they pivoted their business to better serve a community and industry that was heavily curtailed when live public events were shut down beginning in March, 2020.

Tami and Marv talk about how focusing on the needs of a niche marketplace and adapting to new technologies can help a small business survive and succeed, and how a Fundbox line of credit helped them improve their business process as well as their cash flow.

How a Horse Marketing Agency Pivoted During COVID Helped by Credit from Fundbox

Fundbox Forward Podcast | September 09, 2020 Masterworks Creative: with Tami Johnson And Marv Johnson, hosted by Dan Biewener

 Hello, and welcome to the Fundbox forward podcast. Today I'd like to share a story about small business resilience in the face of covid-19, and it centers around a digital marketing agency in Florida called Masterworks Creative. Masterworks is a marketing, advertising, and design firm that not only serves general business Industries, but has a unique focus on horses. Specializing in equine marketing for over 30 years, Masterworks has been helping horse people put their best foot forward in every type of promotional capacity, and they've absolutely corralled the marketing and advertising of horses on camera. 

I'm Dan Biewener, your host from Fundbox, and I'd like to introduce you to Tammy Johnson, president and Marv Johnson, creative director, the people behind Hey Tammy and Marv, welcome to the show. Please tell us a little bit about yourselves and what Masterworks Creative does.

 Tami: We wear a lot of hats here. Masterworks started basically from friends saying, “Hey you work for an ad agency. Would you please do something for me, do an ad for me, do a video for my horse, take pictures like yours?” whatever, and it just kept growing, to the point where I had to give up my day job. So at that point I initially went from marketing beer and cereal and fried chicken to marketing horses, and it wasn't a reach because I have a horse background. I'm a lifelong horse owner. I bred horses over the years, did a stint as a professional trainer, and I've always owned horses. So it's just an industry that I'm really familiar with and it was one of those things where you know the love of life turns into a livelihood, which is great for me. And Marvin had a real job. So he was able to fund the initial startup of the company. He was able to keep things driving forward while I built up the business, and eventually the business just took over. It got to be where I was working 90 hours a week and he was helping me with it. So it got out of control to the point that one day I asked him to quit the day job, then he accepted this job. But we both had a great time, just dabbling in all kinds of things. When the client says they have a problem, we try to come up with a solution. Even if it's something we don't know how to do yet. 

 Dan: I noticed that you don't share the same last name by coincidence. This is a family business; you're married. And since you have this business that you shared together, this must mean that you're working all the time. 

 Marv and Tami: Yeah! Yes. 

 Dan: So you both had very impressive backgrounds in advertising before, and creative work for major companies in their marketing departments. But what's more interesting is that you came at this from a hobby, because we all know how, “If you want to be happy in life, find out what it is that you like to do, and then find a way to get people to pay you to do it.” So you've had a lifelong hobby in horses and you were able to bring that expertise into marketing and blend those two. You touched on that a little while ago, but at what point, and how, did your hobby in horses dovetail with your expertise and career in marketing, and then give you the idea to make this your full-time gig? 

Tami: Well, it was interesting. I actually everything sort of began when Steve Jobs brought the first Apple computer Macintosh computer to the forefront, the little box, the first one that came out. Up to that point I was basically the Account Service side person, and my production experience for design and all was shuffling paper work around an agency from designers to the Production department, and you know, ordering typeset and gluing it down and things like that. So I had some design background. I had also been an Art minor in college as well as a Business major and Equestrian major and an English minor, so I had writing, I had a little bit of design, but I was primarily a service-side person. 

 So we needed some kind of a computer to help us tie our small ad agency together a little bit better for accounting and trafficking and presentations and things. And that was back in the days when if you were doing a presentation at Busch or somebody, you were hiring a team of art directors that were going to physically use magic markers and pencils and actually sketch out and draw your concepts, like we would do, on white paper. And then the team would create these colorful comps to match and then sell the idea to the client. Right? So this was sort of a transition place in the advertising and marketing world where we all went from those hand-generated presentations to actually computer-generated digital files and it was the whole Macintosh that did that for the advertising world. And so from that point forward, all sorts of things started coming.

Like the first thing that happened was, I don't know, I probably volunteered for this or someone mentioned my name, but I ended up doing the newsletter for one of the local horse clubs that I was in. And the newsletter of course got better and better, because the more familiar I got with the Mac, the better the newsletter looked. And it just kept going. It got crazy. 

 Dan: So this isn't the first time you've pivoted an agency and changed its direction. The introduction of desktop publishing was the first big wave that you rode with.

Tami: Right exactly, and at that time Marvin was a musician, but the agency that I work for loved him and thought he was a very creative person and very funny so they used to bring him in for brainstorming sessions. So when we would have a brainstorming session for a client coming up with new plans for the next year, they would bring him in and just have him sit at the table and blow ideas out. I mean, that's Marv. What a brain, really. So he would do that and he came up with some pretty cool stuff and they loved him and they started throwing little chunks of copy stuff at him. And meanwhile, my horse advertising stuff started getting more involved. It went from doing newsletters. It became print ads and we were doing that kind of work, and then he actually started doing some things for me to help me out with layouts because I was getting busy and he was like, “Why don’t you put a headline on that?” and “It should be this.” And I was like, wow, that sounds great. 

So he started getting into my stuff creatively on my side, my horse stuff, and we started doing the first ads that appeared in horse publications that had catchy headlines and things. Because up to that point, an ad was just a picture with the horse's name over the top and what they wanted underneath, and the logos for the stables under that. It wasn't really fancy. And what I was doing was just making it prettier and writing some cool copy. But when Marvin stepped in and started getting off the wall, like now the horse advertisement had a headline that said “10 Feet Tall and Bulletproof”, you know? So then I started transitioning towards some really out-of-the-box creative on the ads and that's when Masterworks really started getting a name for creating these campaigns. Primarily a lot of it was for show trainers that are promoting their business to send horses to these trainers to be trained and shown and promoted. And then also there's breeding season where people promote their stallions and the stallion ads. You know, they just all look the same unless you do something really off the wall and unique and out of the box.

So we started doing a lot of those and for years we did just tons of prep material. This was prior to the internet the print ads just to recap again you had this experience in advertising and creative and then you had this interest in horses and then the horse community reached out to you and we're seeing what you could do and try to get more business from you. So it's not like you went out and tried to generate more business. It started with people asking you to help them. We never asked for business. We get a lot of people reaching out to us and saying can we help you grow your business and we're like no, thanks, but if you know a freelancer that needs work, we have work. It's been a unique enough business that we've had a pretty good market. We very seldom have to look outside for work. And when we do have time we're coming up with ideas to expand the business to offer other services for our clients. Maybe we set up a new website that generates income for us. Marbvin does a lot of self-education. He is always diving into YouTube or other kinds of motion content and things and teaching himself how to use new programs, and I'm always just trying to put the fires out in my office. 

 Dan: Tell us a bit about what it's like having a marketing agency in Ocala, Florida. 

Tami: Well Ocala is known as the horse capital of the world anywhere else in the country. If you're a horse person, you're an odd guy out. If you walk into the grocery store and you're smelly barn boots people look at you and they're disgusted down here in Ocala. You go into the nicest restaurant in town and everybody is wearing barn boots, so when Marv had a job opportunity in Tampa, which brought us from St. Louis down here to Florida. It didn't take me long to figure out that Ocala was really a better fit for us and when he was tired of his office job, we shifted to the farm life in Ocala. It's also a little bit like shooting fish in a barrel for us because Ocala being the wonderful climate that it is and it has a tremendously well supported horse community right here, with world-class veterinarians and farriers and everything “horse” here. It's allowed me to reach outside of our animated horses. And now I do photography for all different grades and all different disciplines and there's literally a horse event every weekend here doing something. And we're about to open, in the next year, the World Equestrian Center here. It's spectacular and it's really going to draw even more business to Ocala.

 As far as Masterworks’ equine side, the opportunities are endless here and that was an accident. We didn't know about the plans for WEC until after we had been here a few years. So that was just like a happy circumstance that started developing, but it's going to be great for us.

Dan: Whether the niche found you or you found the niche. You really did a lightning strike finding an underserved community for your business and then serving it, because a lot of people hadn't thought of using advertising to promote their equine business and a lot of advertising agencies hadn’t thought to go after this community. But you had this vast experience in it. And so it was a great blending of the two. But let's talk about before the pandemic. What are the typical cash flow challenges that you would face at Masterworks?

Tami: We are just two people. I mean, we have outside staff. It's a project-by-project basis. It's me hiring somebody to do some back end code work on the website. Marv has people that he works with on video stuff. So we don't have any people that come in and help us with the administration side. Every business has a lot of administration, even if you don't think you do. But if you keep track of your time, you find out that you do have to do business. You've got to invoice the clients. You've got to keep track of the expenses. You've got to collect the money. You've got to be the person that calls these clients or emails the clients that have been paid and even with that, you know, you don't always get paid right away, especially back when everything was going through the mail. We do a lot of work for Amish clients. Thay do have phones, but they normally won't pay invoices online. Their money comes through the mail, and if the mail is slowed down in any way, that slows our money down, and we still have ongoing expenses. 

 You know much of the online tools, like we use for website development stuff, is subscription-based. So every month, all of these different plugins that we use, or domains, get renewed automatically. Those expenses keep hitting us, whether the clients have paid the bills or not. I mean the and and of course we have to pay to keep the electricity running and deliveries month and things like that. So even if the clients haven't mailed their check or haven't pressed the button down there that says “click button to pay the bill”, we've got all these expenses that keep coming in, and we have to have that cash flow like any other business. 

We've got to have cash flow, and Fundbox has made that part of it much less of a panic. If we look ahead a week or so and we know these expenses are coming up, and we know these invoices are out there — they're sitting in our receivables we can see them — but we can't access the money. Fundbox allows us to just go, “Yeah, let's just grab a little out of here.” We know it. We've got a choice 12 weeks 24 weeks, if it looks like it's going to be a good month, we go for the short term and we make that payment every week. We know if the Fundbox payment is coming and it just gets figured-in, and it makes it really easy and it keeps us on track. It doesn't get us running up a huge liability load that we're only paying interest payments on every month, you know. Fundbox kind of forces you to be a better business person. For one thing, because we know it's coming every Wednesday, and it's not just a once-a-month push on Friday, Saturday, or Sunday, we're saying, “Hey, do you have a job we can bill, because we've got a Fundbox debit going on,” and we'll just start billing clients. It really keeps you on track thinking about things like that, as opposed to just having some huge credit lines sitting over your head at your bank and no one at the bank ever cause you you know, you know and it just keeps building up. And because it's not on your radar other than that interest payment every month, you're not really making any effort to knock it down. 

Dan: Is there anything about your specific industry that adds an additional layer of challenge to what you're doing? 

Tami: Well, the biggest challenge is that it's a very esoteric industry, and that the only people in the industry that are working in it as a livelihood and make their money off of it are the people that train the horses and the people that run the horse shows, which includes photographers, veterinarians, people like that. They all depend on the industry. However, the people that are fueling the industry are people with wealth that can afford to buy a $50,000 or $100,000 show horse or breeding horse, and they want to promote it. IN a way my argument is against that as well, but we're adding value to the product, you know. The horse is the product. So if we're promoting the horse, one we're adding value to that product, and then the horse’s value goes up. Yes the brand, right there. You're building the brand building right, but essentially those people that are spending the money on those ads are just burning the money, because they want to brag about their horse winning a championship. I mean, they don't have to do that. Nobody buys a show horse because they need a show horse. It's kind of like the guy that buys a Ferrari, you know; he's not buying it because he needs it to get to work. He's buying it because it's a chick magnet. So that's what a show horse is. A show horse is an expensive breeding horse, outside of the Thoroughbred industry where they make millions of dollars racing horses because of gambling aspect. When you're talking orders, it's all about the show. It's all about having a horse that you're proud of and that you want to show off to people. 

So the whole industry is basically built on whether these people want to dump thousands of dollars down the drain. That's not to say you don't make money on them. You know, I mean if you're a breeder and you breed a super nice show horse, or she might have 10,000 in the foal when it hits the ground, and you look at the polling you go, “Whoo, ka-ching! It's going to be a nice one.” And then put another 10,000 or 20,000 into training, or maybe you don't even have to do that. Maybe you get a photographer out there that gets a phenomenal picture, throws it up on the internet or on a website. The next thing, you know, some fool with a checkbook writes a $100,000 check for a wailing or a yearling foal because it looks so spectacular in those pictures. But that's kind of my job — to make it look like that right? Someone doesn't want to write that check. I mean, it's not like the Amish people look at us as genteel people. Well, as potential clients, you know to sell horses too, but they also look at horses as vehicles. They're putting fancy black horses that track fast through a sale, and someone in the sales is going to give them a few thousand dollars more than they have invested in the horse. So those are some clients that we have, but the big money horses are the show horses that are owned by some guy in New York who’s a TV producer and his daughter loves horses. And so they own expensive show horses, right? But it's very volatile based on people's luxury. Because that's what it is. So the pandemic definitely affected that. 

Dan: So now the coronavirus hit. I imagine that really put a damper on the show events for horses. And also I'm sure it constricted the income that a lot of people were spending on these horses. So what was it like when suddenly the world changed?

 Tami: It really hit very fast on the horse industry. February March April is the cusp of our show season generally, so people went all winter with their new horses and got ready to go to horse shows. They went to maybe one more show like we did down here in Florida in March, and then everything got shut down because we're shows. They have a lot of spectators and it's a lot of people in one place and it's generally indoors. So that's risky, and almost immediately stopped. The kicker is that for horse trainers, they make money two ways. They make money selling horses. They get a commission for selling horses and they make money going to horse shows with horses, taking horses they work all winter with to get to the point where they can go to a horse show. And then we do a lot of ads during horse show season. People are promoting their wins. So we do print ads or we do social media campaigns and we update websites. We show pictures and people that have show horses are selling horses. You know, somebody wants a new horse for the world championships at the end of the year. So with horse shows shut down, everybody was at a standstill. And of course, no photographers. They have nothing to photograph. They're not working and the horse show managers aren't working. Initially the first 30 days of events got cancelled, which also included horse sales, auctions like the Amish sales. But they didn't cancel it until the last minute. So what it did for us is that we were trying to support this industry is fast and as quickly as we could with what we always do for them, which is drawing on our regular advertising world experience and seeing if there's anything out there that we can use to convert this dilemma and give them a solution where they can make money. 

So the first thing that I thought in the back of my mind for a long time was to create an online auction for the horses, not 200 head of horses like the auction was going to do, because not everyone's going to want to buy a horse online in an auction atmosphere. They like to shop for horses online, but then they want to go see the horse and look at the video and fly out to see it. Well none of that was happening. No one's flying to see anything. So everybody had to look at pictures and look at videos. So an online auction was a little bit risky. But we stood up really quickly, and it gave some of these people that were counting on getting out from under horses (or turning some of these horses over) a place to go with these horses. It was interesting because the first month that the virus shut everything down, everything was quiet for about 6 weeks. Nobody moved. Horses were not really selling unless they were almost bought when the pandemic hit. Then all of a sudden it picked up again and we had tremendous sales happening in like June. We have a sales website just for Morgan horses, and during that third month into the pandemic, all of a sudden we had like 30 sales in one month. 

Dan: Wow. Did you do anything different to make that happen or the community just sort of found you in started using you to make that happen?

Tami: Some more of my theory on it is that people were going to horse shows surely had money in the bank because they were planning on spending $5,000 an award show and instead they're sitting at home with their iPads and they're flipping around like a lot of them do. I have all kinds of friends that have a love-hate relationship with Morgan showcase because they say, you know, “I don't need another horse and then another one pops up that I really like.”  And so that happened because they're not spending it. When they go to a horse show, they pay the trainer three to five thousand dollars to take the horse, including shipping to get the horse there. They're paying $1,000 in hotel fees for themselves to be there, plus whatever their cost if they flew or rode or whatever. So there's a lot of money involved in going to a horse show. So now that money is sitting in the bank because I'm not spending it. 

 Dan: Is that increasing the price of the horses?

 Tami: They weren't planning on buying a horse. They’re just online looking for entertainment and they see a horse club that they like and then they go they press the button, you know, like Tinder, they're calling on that horse. And so I think that's what happened that third month. I think a lot of people had that leftover income they were going to use for going to a horse show but didn't use it and said, “Well this is going to be over and the virus will be over at some point in the near future. And now I'm going to have a new horse.” Of course, that's not what happened. The pandemic’s dragging on. 

So meanwhile, some of the other things that we started doing for people — because now I have more time because I'm not doing so many horse show print ads — I started really pushing on the social media side of things. What I started off from people was a social media package where I would do more original posts for their business or their horse for a set amount of money. And instead of just clicking a button and paying for Facebook boosts, now, I'm keeping the money myself, and I'm just writing a couple of extra posts across Instagram and social media. And I think that really helps them because it's promoting their business on social media platforms. Right now social media is getting a real workout because everybody is sitting at home on their phones and their iPads and their computers, you know. They're playing on Facebook. They're playing on Instagram. So we have to get them out there and the same thing is still going to happen. They're going to see a horse and want to buy it. And we are doing more websites. You know, people that keep talking about doing websites and never have time now they have time. We're still doing farm photography because that's pretty safe. But all the horse shows that I was photographing this year — I usually do three or four for show photography jobs through the show season — all those shows were cancelled. 

Dan: So how did you pivot your business? And what did you do to mediately adapt to the endemic right in a certain sense? 

Marv: We were already not in a bad position because a lot of our work is remote anyway, but as she said, some of the income streams did dry up. And so it did leave a deficit in our expected monthly income. So in terms of pivoting, I would say what we did was we focused more on providing digital content to replace the live events. I do motion graphics design also as well as editing. It was really just an effort to replace our expected streams of income with unexpected streams of income and to do it in a way that utilizes the same workflow that we did for everything else. And that was the key to keep things efficient: not try to reinvent the wheel, not try to pick up a new skill, but to just reposition the skills that we already had in the workflow that we already had the software that we already had and keep adding more hours. 

Dan: I know that Fundbox was part of the solution. Did you seek out a line of credit, or how did you find out about this as an alternative? 

Tami: Well, we've been using Fundbox for three or four years. I'm not even sure how I originally stumbled upon it. It may have been a suggestion by QuickBooks at some point. So we were well positioned already with Fundbox so that it wasn't something we had to really look for. In fact, even though we get a ton of junk mail suggesting. Credit is something we generally don't even look at because we are really comfortable with the way things function with Fundbox. I mean, it's a very efficient way for us to do business. We feel like we're not overextended. It keeps us on track. It keeps us focused on getting billings out and then paying down the Fundbox line whenever we can. So it keeps us on track. It's a much better way to operate than to go to a bank and deal with that. And in fact, I feel kind of proud that we have not had to ask for any government assistance. We didn't even get that emergency check. So we're doing well and we're surviving through all this. But it's been an interesting time to try to help our clients because we do some pro bono work for some nonprofits. A lot of our horse clients that have big training bills also have lesson riding lesson programs. And of course as soon as the pandemic hit, all that shut right down. It's like school, you know.

 Lessons, they can't do that anymore. They can't have a stream of children coming into the barn and sharing equipment, and those lesson programs are huge for them in a lot of ways. For one thing it brings new clients into the barn that eventually buy horses. But the other thing is riding lessons are a huge income stream for those farms. They make a lot of money. They keep a few lesson horses around and then those lesson horses more than pay for themselves. And so these clients had to find a different way too. How are they going to keep their lesson programs going during this pandemic? So they really had to think out of the box too, and we've helped them with that. We've helped them promote. They're doing a lot of online stuff. One client in New York has done some great self-help videos, where she actually goes out and they do a Facebook live kind of thing, but they've been putting it on YouTube and then sharing it on their website. Our nonprofit that we do some work for is the Therapeutic Riding Association here in Ocala. They do bedtime stories for kids. They bring a horse in and they put the horse in the stall and the executive director goes in and hangs out with the horse and tells the bedtime story. And of course, it's a horse game veteran story. 

What's happening is all year, as we know, we've been pushing all these people, these clients, traders, to look outside the box for new clients. That is a perennial problem with the horse industry; they get too comfortable and they don't look for new clients and some of them don't have time to set up a lesson program. But in order to stay afloat during the pandemic, they've all had to reach out and we've been there to make these suggestions to them to reach out to social media. They're now doing virtual horse shows where they send videotapes for YouTube, videos of their horse to be judged. I'm judging one of those in a couple of weeks. I think that a lot of people are finding interesting ways to get through this and it's going to be good for their businesses in the long run because it is bringing a lot of awareness in because these businesses that are normally secluded on their farms and then just go to a horse show and they're in a little bubble. They're really reaching out to the rest of the world now and they're pushing through social media and they're keeping their websites updated and all of those things are going to help them in the big picture when the recovery begins. There's actually a lot of industries that are going to be positively affected by people being forced to find a way.

Dan: How do you predict coronavirus will affect your business for the next six months and could this in fact work out even better for your business? 

 Tami: Well, it's definitely gonna work out better in that we're standing up more websites and web sites are an ongoing source of income because there's maintenance. Once you stand a website up,  there's maintenance that goes on and has to be updated constantly. It becomes a sales tool for that business. There's a lot of things that are coming through that may stick. I've talked to a lot of people that are going to continue to use virtual meetings to get together where it's so much more efficient. And I think that our industry is going to also take advantage of those points going forward. I don't think there's a turning back point. Marv, tell us a little bit about how this has affected where you've been doing. 

Marv: Well, I think If there's any kind of a silver lining to this situation — and it's you know, really tough to think about this in terms of there being a silver lining — is that it's really caused a paradigm shift in the way the world works. There was already a dearth of content because there were so many platforms. And so there were these zillions of content buckets that needed to be filled. So now that need has just grown exponentially. And I think when the virus starts to get resolved, and more traditional ways of connecting come back, I think it's going to just be in addition to what's already happened in this paradigm shift. They'll be back as well. 

 Dan: Yeah, and maybe the live events will compliment the online video content, versus before the pandemic it was the video that supported the live events. 

 Marv: Absolutely. You are absolutely, correct. They have possibly turned around I think especially when companies look at their budgets. I think some of them are re-examining what was the best use of their money before this. And experiential does work, but I think that it's going to become even more integrated. It may be that when the next huge trade show happens, as an attendee you're going to have a choice. I can go to this event or this horse show, spend x amount of dollars, or I can attend virtually and spend this much money, and one experience is going to be just as rich as the other one. 

Dan: How do you think Fundbox could help others in your industry or even other small to medium businesses to accomplish what you're doing? 

Tami: Well, I think it could definitely help anybody with a smaller business, because one of the things that really sticks in my mind when I first started using Fundbox was it was very easy to get approved and get started. I mean it was literally a two-minute form online, and whatever they checked, my credit report or my receivables, they just plugged into my Quickbooks, probably. It was instant approval pretty much. I've recommended it to many many people for a business like ours or for any business that's doing billings. It's huge. Before Fundbox, there were definitely times where we would sit there eating whatever we could find in the pantry and looking at our QuickBooks and going, “We have $20,000 in receivables and we're starving!” So it definitely turned the corner for that, and it teaches people how to get on track and how to think of their business in a better way. I think a lot of people that own small businesses are not business people right now. That is a killer, and I think a lot of people that own small businesses today own the business because they like cutting hair or they like painting houses, but they're terrible business people and every other way and I think that Fundbox helps teach people how to be better business people. 

Dan: That's great. Well, thank you very much both of you. Thank you Tami. Thank you, Marv for your perspective on this and congratulations on a successful pivot and wish you the best of luck moving forward. 

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