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.