Logical changes can surprise you. The simplest change that comes from an even simpler idea can mean a big turnaround for your business, leading to increased profitability, happy employees and even happier customers.
The first logical change made by Scott Jardine of Arn’s Equipment Ltd. in Calgary, Alberta Canada, was to take over the business ownership from his father.
“I saw it as the only real option. My dad had made a reasonable living at it for quite a number of years and I enjoyed the business,” says Jardine. “For me, buying the business seemed like the only natural course to follow. I liked our customers, suppliers and the industry.”
Having worked there for 20 years at the time, Jardine knew the business well. After he took over there were several changes made to attract more customers, improve efficiency and increase profits.
Marketing to Grow Business
A few years ago, when thinking of ways to grow the business and attract more customers, Jardine decided it was necessary to take a serious and dedicated approach to marketing.
“I knew if we wanted to grow the business we needed to have more customers. We made a hard commitment to advertising and marketing, setting a budget and making sure we spent every dollar,” Jardine explains. “We were consistent in our approach and wanted to be out in front of people all the time—not just the shotgun approach here and there.”
To help the marketing efforts, a dedicated marketing person was hired on and brought real results. A great deal of time and money was also spent to make the store more attractive inside and out.
“Everything from the paint on the building, outdoor and indoor signage, and price tags were revamped. We make sure the equipment, showroom and washrooms are all spotless,” explains Jardine. “When we get those high-end consumers in the store, it needs to be a place they feel comfortable spending money.”
Through it all, Jardine says they get a lot more customers in the store and have that many more opportunities to sell equipment and services.
Making Profitability a Priority
As the customer base grew thanks to the heavy attention paid to marketing, Jardine started focusing more on operating profitably as a dealer. Operating profitably is a simple rule he thinks many dealers lose sight of.
“It sounds so simplistic, but I really came to an understanding that we need to be profitable,” says Jardine. “Many dealers think making a salary means their business is profitable. They didn’t make a dime; they got a wage for working.”
All the improvements that Jardine has made to the business and facility in recent years have been made possible thanks to the profits earned. The business’s earnings were improved by driving out waste and protecting margins.
“I started to realize people don’t do business with me because I am the cheapest. If I’m selling based purely on price, I have to drive down the quality of service,” says Jardine. “Dealers need be price-competitive, but there are 100 ways you can add profitability while offering customers good value.”
Jardine saw that lowering margins to get the sale was not operating to his full profitability potential. Driving out waste and selling customers on the value of service helped him maintain margins.
“Getting down to the lowest price is never good for anybody. That’s why we try to deliver value and not price,” says Jardine. “As we started to understand that we could guard margin and drive waste out and be more efficient, then we had dollars to do all the other things.”
Standardizing Processes to Drive Out Waste
In his quest to drive out waste in order to increase profitability, Jardine was inspired by the work Ariens started doing with Jim Paluch, LEAN manufacturing, and the Working Smarter Training Challenge. He and his staff started working together on improving operations and standardizing work processes.
They are now more efficient and can handle a higher volume of customers with the same-sized staff. Something Jardine values just as much as the improved workflow is the increase in communication.
“In a questionnaire of the staff asking 10 ways they thought we could work smarter, all the employees listed better communication as the number one way we could work smarter,” he says. “So one of the first things we did was start having weekly staff meetings. We worked on communicating better and offering staff more information. It really helped us understand how to do business better.”
Standardizing the processes for common everyday tasks at the dealership made communicating with new hires just as easy. Time is saved in training and the output is always the same.
“We’ve documented everything from how to write an invoice to how to write a work order,” says Jardine. “When someone new comes in, I can print off a copy of the eight steps a work order goes through and they can come back to me with questions.”
Previously, a new hire would be assigned someone to shadow for two weeks, holding up the manpower while adding to the man-hours. Often, hires were also trained to do the same things in different ways.
“We would have two or three people each doing it their own way. The finished product is never the same so you are not delivering a consistent service to your customer,” explains Jardine. “You want the outputs to always be the same and that is what standardized work does. We still have a long way to go in that area, but it really makes things easier. The business is run better, the staff has less stress and the customers are more satisfied.”
At Arn’s, the changes are far from over. As long as Jardine can think of ways to improve the way they do business and remain competitive, changes will be made.
“Change has become a constant for us. I thrive on it and we have gotten used to living in a world of change,” says Jardine. “I have preached to the staff that it will always be this way.”
If staff members ever get frustrated, or pushed near their limit like they once were when the dealership’s computers were all replaced, they are reminded of an old procedure or system that didn’t work as well as they thought.
“Periodically we try to bring out old pictures or talk about the way things used to be so they realize that the change has been a good thing. You forget about how it used to be,” Jardine shares. Employees are usually left questioning how they ever managed to do things the old way.
“Nobody wants change for the sake of change, so you need to make the employees’ jobs easier,” says Jardine. “It’s not just about profitability.”