The Opening of this Show.

In the Studio

HATTIE: Hi, I'm Hattie Bryant. Vibrant small towns are incubators of small businesses. Most small towns don't have a big business and they are dependent on small companies to create all the jobs. Once in a while, some of these businesses outgrow the town. This was the case with Scott Mooney, founder of Country Supply. Though the company did outgrow the town, Scott managed to grow his business without leaving his little hometown of Ottumwa, Iowa, a place he loves dearly.

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HATTIE: The horse business is large and diverse. Famous horses like Seabiscuit captured the imagination of Americans in the '30s. And when Funny Cide came close to winning the Triple Crown in 2003, even those of us who don't normally pay attention to horse racing were on the edge of our seats.

HATTIE: But professionals only make up a part of the equestrian industry.

HATTIE: Victoria Wojan and Rob Hutchins are horse lovers and horse owners.

There are over 11 million horses in the US, 30 million horse lovers and four million horse-owning households who buy over $25 billion worth of goods and services for their horses every year. Roxanne Wojan is Victoria's mother.

HATTIE: Roxanne, why did you want a horse in your front yard?

ROXANNE: Relaxation, enjoyment. Horses are something else to love and they give love back unconditionally.

HATTIE: Really. Better than a dog?

ROXANNE: Better than a dog. They're bigger, they're fun to ride, they're exercise, they're something to sink money into.

HATTIE: Those words are music to Scott Mooney's ears. Roxanne is a customer of Scott's creation, Country Supply.

Operator #1: Thank you for calling Country Supply.

HATTIE: The Ottumwa, Iowa-based mail order catalog he launched in 1984.

SCOTT MOONEY: 'Cause you know there's going to be people out there that can buy it.

Employee: But they will run out as fast as we're selling them.

HATTIE: In 2003, he had 450,000 customers who receive his catalog at least six times a year -- while best customers receive catalogs 10 times a year. This effort generates over $17 million in annual sales.

ROXANNE: Scott, one suggestion.

SCOTT: Yeah.

ROXANNE: We need to shorten the reins a little bit for kids.

SCOTT: Shorten the ... well, do you have a knife? (reaching into his pocket) And in fact, I have a ... (laughter)

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HATTIE: Describe your core customer.

SCOTT: They ride western in their back yard. You know, they have probably four horses on average, and they do it for their family hobby.

HATTIE: Great. Like you did when you were growing up.

SCOTT: Yes.

HATTIE: You had that horse in your back yard.

SCOTT: Yes, I built the company to focus on the customer that I would have been, I think, when I grew up.

HATTIE: I want to know why you weren't playing baseball with all the other kids when you were 14 years old.

SCOTT: Well, some kids sell lemonade out on the street. This isn't that far removed from that really. I just started selling horse equipment out of the barn.

HATTIE: So tell me about your high school experience.

SCOTT: About my high school experience.

HATTIE: Yes, like how did you run your business when you were supposed to be going to school? How'd that happen?

SCOTT: If I wasn't at high school, I was working. Probably the night of the prom, I was probably rebuilding shelf displays at the store, see. And I'd run a business during the day and go to high school at night. I graduated with my class just like all the rest of the kids that I went to high school with.

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HATTIE: So when did you decide this town is not big enough for me?

SCOTT: It was as simple as, OK, I can't ship the people in from out of town, so the next natural thought was we just go into the catalog business. In that way, we can expose our products to tens of thousands and hundreds of thousands of people all over the country.

HATTIE: Stan and Diane MacIntyre enjoy riding with their daughter.

HATTIE: Do you have to make a sacrifice to have horses? Do you just give up a second car, a vacation or --

DIANE MACINTYRE: Gave up dune buggies.

STAN MACINTYRE: We gave up the desert to enjoy more natural resources of transportation rather than dune buggies and quads and stuff. But it's a high interest that our daughter had and we decided as a family to go ahead and get involved with it, and it's been nothing but good since.

HATTIE: How long did it take you to learn how to ride?

DIANE: I'm still learning.

STAN: Still learning. You learn for life.

HATTIE: In about 1984, you had zero names. So how'd you get your first one?

SCOTT: We just stopped to think where can we find their names? The telephone book. So we got out the Des Moines telephone book, ads that they'd run, classified ads in the Des Moines Register, and the newspapers around.

In fact, at the library, they had newspapers from all over the country. And they all had classified ads with people that'd be selling used horses or saddles, With those people's names, we started addresses, whatever we could get. Different magazines that go out to horse organizations all had ads in the back. So that's really how we developed our first mailing list.

HATTIE: So you're running your retail shop during the day, then you're going to the library at night --

SCOTT: Yes

HATTIE: -- and you're hand copying?

SCOTT: They had a copy machine so I could copy them. A really, really nice list was when we could possibly find a list of names and addresses that were somewhat laid out like an address label and we could blow them up on a copy machine and cut them out and glue them on.

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HATTIE: So describe your first catalog, what did it look like?

SCOTT: The first catalog was just black and white, and it's printed at the local printer in Ottumwa. And we printed maybe just a thousand copies of the first catalog that we did.

HATTIE: Was he a friend of the family?

SCOTT: Kenny was a friend of my grandfather. He was the one that took the job to print the Country Supply catalog when I had nothing. I couldn't pay him for it, see. But he extended us the credit, and he said, `Well, you can pay me when you can pay me.' A lot of the addresses that I started out with were people that I already knew. I tried to stay pretty much in the Midwest where we're located. Our service couldn't be beaten by anybody.

HATTIE: OK, what you're saying is you had a regional success --

SCOTT: Right. Right.

HATTIE: -- at the beginning. And that really helped you build cash flow.

SCOTT: Yes. They weren't used to that from anybody they'd been buying from previously. So they continued to buy. People will almost never place another order from another mail order till they get the previous order. But as soon as they do, you open up the floodgates so you've got to keep the order out. You've got to keep those orders going out to these customers.

RICK: Hey pal --- (talking to his horse)

ROXANNE: You have to buy a lot of stuff and Country Supply has been wonderful as far as ordering the grooming supplies that we need and the chaps the kids wear to ride in. So that's been fantastic. Their turnaround time-- I pick up the phone and order it and it's here within easily three or four days.

SANDY: Thank you for calling Country Supply. This is Sandy. How can I help you today?

Operator #2: Ok, it's a real dark chestnut brown.

ROXANNE: The service is excellent. It's nice to be able to pick up the phone and talk to somebody at the other end of the phone and not get a voice mail system. I want to know sizes, I want to know dimensions, and I sometimes don't always look to see if that's in the catalog. I look at the picture and go, `OK, that's what I want.' But I want somebody to describe it fully to me on the telephone and that's where the operator at Country Supply has been wonderful.

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HATTIE: And how do you know now and how did you know then what to put in the catalog?

SCOTT: Trial and error. You guess a lot. Part of the problem about going into the catalog business for people that are in the retail store business is that it's not the same stuff that is going to sell. So it's going to be a little bit different. Things that were sold in the retail store may not necessarily sell in the catalog.

SCOTT: Hi, Don.

DON BRIGHT: You Scott?

SCOTT: Yep.

DON: Pleased to meet you.

SCOTT: Nice to meet you.

HATTIE: Getting out to visit his customers is one of Scott's favorite things to do.

DON: People like these stalls because they're completely covered.

SCOTT: Right.

HATTIE: Don Bright owns the Lone Oak Ranch in Lakeside (California).

DON: This is my stud here. Almost all the horses I own are by him.

SCOTT: Oh, yes. And he's for sale?

DON: No, that'd be the like selling part of the family.

SCOTT: Do you bring the vet down to administer all your shots and your vaccinations?

DON: No. That's the reason I buy some of them from you.

HATTIE: Even Southern California horse country is not too far from Iowa for Scott to do a little market research.

DON: I spend a lot of money every month on fly control.

SCOTT: Yes, We're thinking about putting it in. Did you put that up yourself, Don?

DON: I did.

SCOTT: So you put all the piping in and everything for it. Did you order that?

DON: I ordered it.

SCOTT: You ordered that. We've been thinking about getting into the whole barn system. If you could design a fly spray to put in your fly control system, what would it look like?

DON: I'd like it packaged in a probably quart container 'cause that's a quart and that's what I'm using now. If you got something a little stronger, it might take less than that.

SCOTT: Right. It's easy to ship.

SCOTT: Don and Margaret's place here and Don and Margaret's boarders exemplify a large segment of our mailing list. You know, 80 percent of our customers are represented in these guys and their horses, to be healthy and happy, they need quite a bit of equipment. Their owners to be healthy and happy, they need that horse equipment at the best price. And that's what we do.

SCOTT: See the price work on that? Employee #1: Wow. That's really low.

SCOTT: Eighteen bucks.

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HATTIE: Most small-business owners around the country are not the cheapest, so how did you decide I'm going to be the price leader and how do you make that work?

SCOTT: You have to work just 10 times as hard to sell on price.

HATTIE: What do you mean?

SCOTT: You're going to be operating on lower margins. In fact, there are products that we've put into our line that we've sold at a loss because we didn't have the volume to be able to buy like the big boys buy.

CHRIS: Scott moves stuff around every day on the Web site. We're overstocked on a particular item or we need to lower the price or do something different. And so he's moving items around all the time, bringing them to the front page to --

SCOTT: Put them on sale.

CHRIS: -- put them on sale.

SCOTT: Pricing is an art. There's no science to pricing.

HATTIE: Let's talk about that.

SCOTT: If you're going to make it an art, you better watch those numbers every day because --

HATTIE: Good point.

SCOTT: Yeah, I mean, you don't know that, OK, I sold $100 worth of stuff, I made $45 profit today. Without going out and looking at each individual product, which, of course, we have those reports, too, That's kind of the big number that you looking at. And with pricing being an art, you can get a feel for what's selling, what's not selling just by looking at those margins 'cause you really know where your margins are on a lot of stuff. You just sense it so you kind of know what's selling and what's going on, what time of year it is.

HATTIE: I think what I hear you saying to me is it's the long haul.

SCOTT: Right. You've got to look at the big picture, keep your eyes on the horizon, but be aware where your feet are.

SCOTT: Now most of the trainers that you have here, are they keeping all of their horses here?

HATTIE: Scott's customer, Sandy Moore, is a horse lover who gets to earn a living around horses.

SANDY MOORE: So the horses that are in the arena up here are new babies, they're two-year-olds.

HATTIE: She's assistant manager of the San Luis Rey Downs Thoroughbred Training Center in Bonsall, California.

SANDY: The other thing that I like that you guys carry for people that are real trail riders.

SCOTT: See, we manufacture these and these and these. We sew these together in the back room.

SANDY: Oh, yeah, OK. Yeah, I'm looking at them.

SCOTT: You have one of these little patch pockets?

SANDY: No, but I've been thinking about getting one.

SCOTT: Well, you ought to.

SANDY: I know.

SCOTT: I designed those. I have a patent on them.

SANDY: Really?

SCOTT: I'm the patent holder.

SCOTT: Yeah, I know how my customers think because I think like my customer.

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SCOTT: The biggest part of what I believe is identifying strengths in people. We spend a lot of time talking with our kids, straight out, what their strengths are. I mean, we don't cover it up and sugarcoat it. Here's your strengths, here's your weakness. We don't pick on them for their weaknesses.

HATTIE: And you did that with employees, too.

SCOTT: Right. You don't sound very good on the phone, so you need to go in there and do it all day until you're good at it. I mean, that would be --

HATTIE: No, that's just beating somebody down. OK, you put them in packing and let the person with the nice voice answer the phones.

SCOTT: Right, because they're happy. Thank you. But identifying strengths makes a huge amount of difference when you identify the strengths and people say, `Oh, yeah, that's right.' My first love is marketing. Selling the products to the customers, giving them what they want for the price they want.

HATTIE: Scott, you're a genius at it. Anybody that can sell better than people can even make it, the thing that you play at is the thing that you're best at.

SCOTT: Well, if I weren't the best at it, it'd probably be work.

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HATTIE: At the age of 14, Scott discovered he was a merchant. He started buying and selling things to his neighbors, then expanded quickly to his entire community. He didn't even go to the high school prom because he was too busy at his own store filling orders and servicing accounts. He knows himself. He knows what he's good at and today's business reflects a continuous improvement cycle from those early beginnings.

Many people go through their entire life never finding what they love to do so they never get really good at anything. And life is a daily grind and struggle.

Scott says that time flies at Country Supply. For him, 1978 was like yesterday. Every day the hours just slip away unnoticed and everyone on his team wonders where the time went. Surely, we all know, time flies when you're having fun. But this is more than fun for Scott and the team. This is meaningful work.

Today, Scott is selling around the world and they're overjoyed with their contributions and work with those programs where horses are used in therapeutic ways to help people.

Country Supply is a success because Scott is totally authentic and true to himself. This authenticity is the fountain from which springs his `whatever it takes' customer service philosophy. It is the source of his energy and enthusiasm.

Need more of what Scott has?

Find your natural strengths and go with your own flow.

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HATTIE: Forty-five miles north of San Diego, you'll find some of America's most stunning horse country. Rick Wojans loves living here.

RICK: This is just a bit of paradise and the thing about it is that when we have the horses, it is great family time. And there are no distractions, there is no television, there is no email to go catch. This is just perfect.

HATTIE: This is Chris Hudson.

CHRIS: I come out and I get on the lakeside roads. It's just kind of very relaxing. Even the drive out here- - you come from the city all concrete and you get off the road and out in some hills and you're back in dirt again. So it is just awesome.

SCOTT: So we struck a cord with all these people. Now we've got all these orders coming in, we hit them with the right product at the right price, we get all the orders coming in. Growth has always come and it's always just poured in.

HATTIE: In 2000, 2001, you had 80-ish employees.

SCOTT: Yes

HATTIE: You were taking all the calls.

SCOTT: Taking all the calls.

HATTIE: You were filling all the orders.

SCOTT: We were making 25 percent of the products that we were sending out. We were manufacturing them on site. We were shipping all the boxes out. We were receiving all the stuff.

HATTIE: You're making me so tired.

SCOTT: Yes and it made me tired, too. (laughs) And I was getting older and older every hour.

HATTIE: OK, so what was your solution?

SCOTT: I realized the focus of Country Supply was moving off the customer. That's what came first.

HATTIE: And you were too panicked, too busy, too distracted.

SCOTT: Yeah. We were focused on building additional facilities, we were focused on buying equipment, we were focused on hiring 12 more people. We were focused on all this stuff. Something had to be done.

HATTIE: So what'd you do?

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SCOTT: We started looking, sitting down and thinking. Martha and I would talk about it. As we looked at how we were going to solve this problem, of course, outsourcing was an option. Now we started to discover that there is a lot of capacity out there. We found out there were a lot of people who were interested in taking the Country Supply volume and shipping boxes.

HATTIE: So you had people bidding against each other.

SCOTT: We had a lot of people bidding. And we spent a lot of time looking for the right partner. And the one that we finally selected actually ended up being the one that did the best job with the customers, 'because we're customer focused. We can't change that or the company loses it soul.

EMPLOYEE #2: If you could go ahead and add 100 of them to our --

CHRIS: We picture it in blue, so that's going to be --

HATTIE: Today, there are just five people in the Ottumwa headquarters.

HATTIE: Stark Bros. Fulfillment Services in Louisiana, Missouri, handles all inbound calls and fulfills orders.

SCOTT: We spent a lot of time doing the outsource project, with the people we had, we didn't want to, you know --

HATTIE: Fire them.

SCOTT: Yes, fire them. I mean, it isn't like, `OK, you're my friend, goodbye. Get out.' You know, but we're going to move you over here, we're going to put you over here. So that was step one. And then step two was bringing in a temporary help agency to fill in the gaps that we were going to have. But we still let natural attrition take in anybody who left. We didn't hire new, we just brought in temporary.

SCOTT: I've been fortunate enough to be able to build my job now 300 feet away from my back door of my house. I used to work every day, now I'm back to playing every day.

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CHRIS: Tell her to go ahead and finalize both sets of financials (Country Supply and TackOptions.com).

HATTIE: You're $17 million in revenues today, right? At what point did you hire a CFO? I mean, were you at $1 million, $2 million, $3 million, $4 million, $5 million?

SCOTT: Full-time on staff, it seems to me like we were in the $8 million range probably.

HATTIE: Yes, you're like five million too late.

CHRIS: They come in bundles of 80 but we need to buy them in inches --

SCOTT: I'd have done it -- should have done it a lot sooner than what we did. But he actually keeps track of projections. We sit down and project each year what the sales are going to be. And he can break it down on a weekly basis, and he does it in advance based on our mail plan of how many catalogs we're going to sell. And he keeps close tabs on that every day.

CHRIS: Did you run out of that yellow slicker?

SCOTT: We keep really close tabs on cash. We keep really close tabs on inventory. We operate with our inventory as close to just in time as you can and still fill orders so you know if there's an inventory issue because of the fact that you ship down to nothing and you'll be out of it for several hours or a day. So that really keeps our inventory really clean.

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SCOTT: The best thing that ever happened to Country Supply was not being able to borrow money. That's the best thing that happened. If we'd been able to borrow money up front, we wouldn't have had the kind of foundation that you need to build, I don't believe--some companies can--to build long term. Money can buy your way past some fundamental issues. We couldn't buy our way past any. If we had a fundamental problem with the way the company was built or the way it was running or the policies that we had, we knew it next week when we couldn't pay for groceries.

HATTIE: To continue being the price leader, Scott's plan includes more technology, more community building and even more disintermediation at his ever-evolving Web site, TackAuction.com.

SCOTT: We're going to let all of our customers use it.

HATTIE: OK, for free.

SCOTT: For free. All we'll do is we'll put together the buyer and the seller.

HATTIE: Scott, is this another loss leader?

SCOTT: Well, yes. Well, no.

HATTIE: Customers love the Web and the convenience of finding a Country Supply catalog in their mailbox.

ROB: One of the toughest choices I think I ever made was having to decide between a woman and my horses. And as you can see, the horses won out on the decision. It was probably no contest to tell you the truth.

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SCOTT: I have a picture in my office of a mountain goat jumping across this huge crevice. He's halfway across and I say that's what Country Supply does every day, because he's only halfway across. And it really looks in the picture it looks like he's not going to make it, but I know he makes it. He'll make it across there, taking that leap, not taking those two little steps. Sometimes you just have to take leaps. If you take the leap, know that you're willing to do what it takes to make it work.

HATTIE: So what does it take to build a long-lived company like this? This is from 1976 until now.

SCOTT: All them times going to bat. Sometimes you're going to go to bat at 3:00 in the afternoon; sometimes you're going to go to bat at 5, but maybe you're going to go to bat at 7, you're going to go to bat at midnight. It's going to be 3:00 tomorrow morning, you're still going to be swinging. You know, whatever it takes to get that done, you're going to go to bat all that many times.

HATTIE: I think it's a game with you.

SCOTT: You're probably right.

HATTIE: I mean, I think it's your game. Other guys played baseball, you played business.

SCOTT: I'd say you're probably right.

HATTIE: And then you grew up and hit a home run.

SCOTT: Yes. I hit a home run only probably because I went to bat thousands of times.

HATTIE: At 4:30 in the morning, when you wake up, what's going through your head?

SCOTT: I get to go play the game again.

HATTIE: There may be riches in niches, but you have to find your niche and love it and the riches do follow. We'll see you next time.