Dealers’ Domain

Question: What steps are you taking to weather the tough economic times?

Fortunately, in recent years, customers in this area have put off repairing their snow equipment because they believed the threats of global warming. Now, this year the temperatures have been unseasonably cold, and the snowfall has been plentiful.
As a result, I’ve had more work than I can handle: snow blowers, ice augers, small snowmobiles, and a few early birds who want their spring mower tuneups done now. What with the abundance of work and the lack of time to spend my income, the economic doldrums have not affected me or my shop. Once a month, a customer requests a reduction in his/her bill, so I offer to set up time payments. I figure they’re having trouble balancing their bankbook, so I give them some latitude. I chalk off the delayed payments as a marketing expense.
When the customer wonders out loud how I know he/she’ll eventually pay, I remind them I know where they live, since I delivered the machine to their house.
— Flute Snyder
Hudson Mower Doctor
Hudson, Wis.

The steps that we are taking are NOTHING NEW; we just do them better than we used to. You must keep a sharp eye out on each and every expense category. Lowering expenses is better than gaining sales. You must also keep an ear open for which way the wind is blowing; always bend with the wind, but don’t change your core values. 2009 was a bad year for most folks, but we had a 25-percent sales/service increase over 2008, with a 2-percent expense increase.
— Dean Davis
Dogwood Inc.
Carbondale, Ill.

I have what I thought was a good line of credit to carry us through the tough times. Unfortunately, what a lot of businesses are discovering is that our friendly bankers are not so quick to hand out money anymore.
When things slow down, the first thing I look at is quickly cutting expenses. If you look carefully, expenses can be cut without cutting services to our customers. In my father’s time, we made up projects to keep our staff busy during slow periods. Today, it is important to keep the staff productive while they are on the clock. While we don’t lay off employees that we feel are valuable, I do cut hours. I explain this at the time of hiring, so it is not a big surprise when it happens. Our store hours remain the same, but my shop may be empty midweek. If an unexpected job comes in, I am there to cover it.
Our local power company raised rates 30 percent at the beginning of the year, so we took a close look at power usage. We are cutting off light and heat to unneeded areas. We are replacing regular light switches with motion sensors in our storage areas. Energy-efficient lighting and other energy-saving equipment are worth looking into.
I look carefully at dead stock. It’s a better idea to get rid of it at a loss than borrowing money to cover other needed expenses. I just eliminated one of my preseason parts stock orders when that distributor eliminated the parts return program. We no longer stock engines and other high-cost, slow-moving parts because they are quickly available when needed.
— Rob Leiser
Leiser’s Sales and Rental
Easton, Pa.

I am sure that every dealership has been trying for years to run more efficiently and profitably, even more so in this tough economy. Personally, I am running out of ideas. With that said, we are on winter hours now, have put a cap on our advertising until spring, turned down the thermostat, put on hold any major purchases, and are pushing our winter service program to generate more income. We will also cut back on our preseason orders and will rely more on customer demand in-season for our inventory purchases. Also, buying lottery tickets!!!
— John Moon
Moon’s Farm-Yard Center, Inc.
Ulysses, Pa.

For the last two years, we have watched our gross income decline and our profits slide. We have reacted just as every dealership has. Anyone who has been in this business for any length of time, knows the drill.
At this point, there is little left for us to do that hasn’t been done already. The bottom line: We need the economy to improve. Like the weather, the forces that move our economy are beyond our control. So, we wait.
But, there is “waiting,” and there is “waiting.” One way to wait is to scrunch down into the fetal position; another way is to throw a party.
Better economic times will arrive when they arrive, regardless of which method of waiting we choose.
Personally, I’ve decided to do my waiting with a party. I am suffering from “recession” fatigue. It’s time to turn off the TV, lay down the newspaper, and have some fun. It’s time to enjoy our business again.
Rather than to continue to empower the recession, we are going to be thankful, excited and happy in our daily business routine. The time spent waiting for things to turn around will pass just the same.
For us, 2010 will be “The year of the party.” Let’s have fun again!
— Roger Zerkle
ZDE, LLC
Flat Rock, Ill.

We have cut back on inventory of new equipment and parts. We also have cut back on hours worked by each employee. We have cut back on anything we don’t have to have (e.g. three phone lines to two, trash pickup on call rather than weekly or biweekly, one credit card machine instead of two). We are watching our bottom line a lot more on closely day to day.
— Ken Stoller, president
Stoller Lawn & Garden Inc.
Orrville, Ohio

We saw the writing on the wall, so when others were expanding and grabbing all the profits, we took the careful approach. We did not hire extra people, we set priorities, and worked a little longer and a little harder. During slower times, we close on Saturdays, go home at closing time, and even take some time off. We take a reasonable pay; we did not get greedy. We pay bills early and take the discounts. We keep wholegoods to a minimum; this way, if anything comes due, we buy it rather than pay interest. This is possible when you are a single-line dealer. We use all free freight programs when ordering. We cut quantities in stocked parts and just place more frequent orders. But I will tell you I feel really good about this year. My world is going to rock!
— Matt Borden, owner
Ed & Matt Equipment
Greenville, R.I.

We started having problems over a year ago. We have cut our new equipment inventories, not stocking slow-moving pieces, trying to keep an eye on what the mass stores are stocking. (I don’t like to be in direct competition with them). Sell quality, not the price; be able to explain why ours is better for the price.
We have also stepped up our service department; need to service what the mass sells. This has helped a lot. Also, make sure on staff. I have taken over parts because I can do that and run the company. We need everyone doing something while on the clock, not standing around. We have also reduced employee hours during the winter, but if the work is here, they put the hours in.
— Kerry Passick, operations manager
Accel Small Engine
West Des Moines, Iowa

Economy hasn’t been such a big factor in our area. We actually set a sales record this year. It was our largest year ever in 41 years. However, we are very aware that it had to do with rain more than a booming economy in our area. While unemployment is low in our area, we are still concerned about the economy and what could happen. We have lowered our inventory levels on wholegoods. We order in smaller buckets more frequently. We also have taken this approach to parts as well. If business would start to slow due to the economy, then we figure we have less to be liable for. We are looking more closely at operating costs as well, and cutting back as much as we can. We are buying the bare minimum to operate the business — buying as needed only — and asking ourselves, “Is this something we can do without?” What we have not cut are jobs, salaries and advertising. We only gave pay raises to our hourly paid employees and service techs, however. So the steps we are taking are really not any different than in the past. We are always trying to save money where we can and buy smart.
— David Vassey
Vassey Lawn and Garden
Cleveland, Tenn.

Try to control the number of employees, be wiser on stocking units, trying not to get overloaded. Also, watching my parts inventory; may not keep larger quantities as I used to, but not cut myself short either.
— Tony Nation
Nation’s Small Engine, Inc.
Hot Springs, Ark.