A Crane's-Eye View

In upstate Connecticut, Crane’s Outdoor Power Equipment has a slightly different view of things than a lot of businesses in today’s struggling economy. With a newly renovated facility that leaves customers saying “wow” and employees wondering how they ever functioned before, the team at Crane’s is as excited as it’s ever been.

There’s been a lot going on these past couple of years. Rich Crane Jr. assumed control of the 50-year-old dealership in late-2007. The extensive facility renovation was completed in April 2008. Then came the burgeoning economic and credit crisis—not necessarily the ideal time to be making significant investments in a power equipment business.

But the staff at Crane’s didn’t bat an eye. Maybe that’s because everyone was too busy carrying the commercially focused dealership to record sales of $2.7 million in 2008.

Crane’s Outdoor Power Equipment is off to a roaring start again this year. Another punishing winter has left their contractor customers with good cash flows from all the snow pushing and ice cleanups they’ve been doing. The new store, an impressive sight from the highly traveled Route 7 the building sits on, is drawing more residential clientele. And a growing “New Yorker” customer segment is creating new opportunity for tractor sales.

Current owner Rich Jr. and business partner Todd MacNeil just hope the positive trend continues. They know it’s not going to be easy given the current economic environment. “It’s been tougher to get credit approvals for contractors, even guys who’ve been customers of ours for years,” Rich Jr. points out. “But usually we can explain the situation to our finance providers and get something worked out,” MacNeil adds.

MY HOW THINGS CHANGE

Fortunately, Crane’s Outdoor Power Equipment does have many long-standing commercial accounts—something the dealership has been focused on for the past eight years. But the business had an entirely different persona in the early days.

Founded as a home-based business in 1957 by Stanley Segalla, brother Don Segalla took partnership with Stanley’s son Bob in 1963 and built a new store in the current location. “We did a lot of snowmobile business in the 1960’s and 70’s … you know, back when there was actually good money in it,” Don relates. “We also sold and repaired a lot of consumer lawn and garden equipment. We had a nice business.”

Don and Bob then sold to their neighbors, Rich Crane Sr., wife Valerie and son Rich Jr., in 1992. The dealership (Segalla’s Lawnmower Shop) then came to be known as Crane’s Outdoor Power Equipment as Rich Jr. and family, formerly landscape contractors, came on board. Don continued to work in the business and still does today. In 1993 they were joined by Todd MacNeil, who’d been working at another area dealership. Rich Jr. knew MacNeil from his days as a landscaper buying parts.

Before long the dealership gradually got out of the snowmobile business. “We wanted to focus on equipment and products people needed, as opposed to just wanted,” MacNeil says. “We also wanted to start catering to the commercial market more,” Rich Jr. adds. Since the mid-90’s there’d been an explosion of landscape contractors in upstate Connecticut. “We’d been focusing on this market since 2000, looking for any piece of equipment or product that would help us fill the needs of landscape contractors,” Rich Jr. says.

In addition to making the natural shift from primarily selling lawn tractors to zero-turn mowers, Crane’s also began selling trailers in 2001. “More and more contractors were asking for them, so it made sense to expand into this area,” Rich Jr. says. “It’s proved to be the right decision. For every four mowers we sell, we also sell a trailer.”

“It was tricky getting started at first,” adds MacNeil. “The key for us was getting trailer orders pre-booked so we knew how much inventory to bring in at the start of the season.”

Crane’s Outdoor Power Equipment also sells Fisher snowplows. A separate company called Connecticut Snow & Ice Control, owned by Rich Jr. and his brother Chris, also owner of Greenacres Landscaping, provides customers with snow control products and is the local Magic Salt distributor. While an entirely separate entity from Crane’s Outdoor Power, the snow and ice control business helps elevate Rich Jr.’s profile in the contractor community all the more.

ENOUGH IS ENOUGH

From 2000-2004 the dealership’s landscape customer base blossomed. Soon 70% of the dealership’s revenue was coming from commercial accounts. Doing business as usual was not going to cut it anymore.

“I really started thinking about doing something with the building in 2004,” Rich Jr. recalls. “I was sick of having to move this to get to that, wasting two hours a day and $9,000 a year just moving equipment in and out of the building. Plus, being so pressed for space was really starting to affect morale.

“We weren’t really sure which way to go. We knew we either had to grow enormously and make ourselves more productive, or just scale back to a four-man operation that would be focused on just a couple lines. But the demand from the commercial market was so strong that we decided to take the other step—a huge step.”

In 2005 Rich Jr. bought the property from Don Segalla; Rich Jr. and his parents had been leasing it since 1992. Then, in 2007, Rich Jr. bought the business outright from his parents. MacNeil became a silent partner.

DREAM DEALERSHIP

Plans to create the dream dealership were immediately set into motion. Rich Jr., the consummate jack of all trades, did a lot of the work himself. But the vision was his and MacNeil’s.

“Stan Abramowitz, my rep from KPM (distributor), took me around to a bunch of dealerships so I could see what others were doing,” Rich Jr. tells. “I made notes of things I wanted to incorporate into our new facility, and took a second tour with Todd (MacNeil) a couple weeks later. From there we combined those ideas with our own to design the facility we needed to continue growing.”

Completed in April 2008, the primary goals of the new 11,000-square-foot facility were to increase the roadside “wow factor” in hopes of drawing in more customers, provide ample storage space, and dramatically increase shop efficiency and cleanliness.

The double-decker showroom with windows facing the highway provides a sneak peak of what’s inside. All excess handheld equipment is hung from the upstairs railing, creating an impressive sight while freeing up storage space in the back.

Speaking of the back, that’s where a substantial part of the investment was directed. The service department is spotless. When asked how in the world they keep it that way, especially when the pace picks up in the spring, Rich Jr. and MacNeil look at each other, chuckle and say, “We just don’t let it get dirty in the first place.” And that’s by design:

• Central vac system allows techs to efficiently clean off all equipment when it comes in for repair; blowing off equipment is not allowed because it kicks dust and debris all over the place
• Grinding room is walled-off within the shop
• Shop floor was ground and polished so dust and dirt can’t settle into pores
• A floor drain was installed to allow for the washing of every piece of equipment that comes through the shop; a grease trap and 1,500-gallon oil separator keep the dealership in compliance with EPA standards
• Five lift tables are recessed in the floor so that, when not in use, they’re not in the way
•A “conduit maze” runs beneath the floor for all air, grease and oil hoses so these don’t get in the way either
• Oil is bought and stored in large drums, and the air dispensing guns have digital readouts so techs can dispense the exact amount needed; this has helped cut down on wasted, unused oil
• Air compressor is way in the back to reduce noise levels in the work area and showroom
• Bright lights and radiant heat create a more pleasant working environment

The service department features other improvements as well. A truck lift assists with zero-turn and trailer repairs, along with snowplow installations. An electric man-lift enhances warehouse operations. Two computers with high-speed Internet access help techs keep billables up. Storage systems from Mac Tools and Snap-on keep all those little things in their place.

AT YOUR SERVICE – FOR 50-PLUS YEARS

Rich Jr. and MacNeil agree that all these investments have been well worth it because the service department is more profitable than ever. And when you consider the fact that roughly 25% of this dealership’s total revenue comes from service, you’re talking about some serious money to the bottom line.

Crane’s focus on the commercial market and willingness to diversify are the primary reasons why it does such substantial service business. Snowplow installations and off-season storage of customers’ equipment help drive service revenue. So does the dealership’s fabrication department next door.

“When I first started doing fabrication work, I tried to set it up so I was doing most of it in the winter to help keep off-season revenue up,” Rich Jr. explains. “The problem was that, in working with local truck dealerships, my customer base grew really fast—and they wanted me to do the work year-round. But come spring, man, I had enough to do. So lately we’ve refocused our efforts in the fabricating department. Now we only do work for our own customers, and believe me there’s plenty of it.”

MacNeil is the service manager at Crane’s. Don works as needed, whether that’s five days a week or just a couple. Brothers Tommy and Joe Sherwood, who’ve been enamored with the dealership since they could walk, round out the shop staff. Brian Cavanaugh spends the majority of his time in the parts department.

Each employee has a clearly defined role, but the overall attitude is more of an “everybody’s in it together” approach. “Everybody treats each other as equals here,” Rich Jr. says. “There’s very little friction here—ever,” MacNeil adds. “We’re really lucky that way.”

Still, Rich Jr. is quick to point out that they do run a tight ship. “I know what we need to bring in every day so we’re paying the bills and making money,” he points out. “Every month I put a pie chart together showing what each department made in terms of sales and profits. I like to share that information with employees because, with the way we operate as a total unit and everything’s such a group effort, everyone takes a lot of pride in it.”