One Road Leads to Another

OAKBORO AG, POWER & TURF

Oakboro, NC
oakboroapt.com
Founded: 1992
Owner: Joel Thomas
Employees: 9 full time
Annual Sales: Multi-million
Sales Mix: 40% wholegoods,
30% parts, 30% service
Customer Mix: 50% consumer,
50% commercial
Shop Labor Rate: $60 per hour
Major Lines: Echo, Exmark, Husqvarna, Mahindra, McCormick, Stihl

How do you go from less than $50,000 in annual sales to way over a million? For Joel Thomas, it’s been all about partnering with the right people, taking care of your best people, and capitalizing on every opportunity to sell more and spend less.

Thomas refers to his dealership—Oakboro Ag, Power & Turf—as “your super-store for farm, landscape and yard needs.” They sell lawn and garden tractors, zero-turn and walk-behind mowers, the full spectrum of handheld equipment, trenchers and tillers, utility vehicles and more. Most recently they’ve added medium-hp tractors for the growing hobby farmer market, along with mulch, fertilizer and other landscape materials for their diversifying landscape customers. Now the dealership is branching into irrigation supplies.

“As I look around our store today, I can’t help but chuckle,” Thomas says. “When we moved in 12 years ago, we all looked at each other and said, ‘How in the world are we going to fill this place?’ Today we’re asking, ‘How can we come up with more space so we can keep growing?’”

The dealership has even undergone a couple of expansions and remodels over the years. But the growth has been unrelenting. Thomas isn’t complaining, though. His goal since day one has been to continually build business. The biggest challenge has been staying efficient and profitable in the process.

“We’ve done a lot of praying,” Thomas relates, “and always figured that if there was a rock in the road, it just meant we should try another path. The last couple years have been tough with the drought down here. We’ve seen a few of our competitors close their doors, and have been fortunate to pick up some of their customers and employees. Their customers come in here and say, ‘Hey, your prices are higher than so and so’s were.’ I respond with, ‘You’re exactly right, which is why we’re still open and able to take care of you today.’”

PROOF IS IN THE PROFIT

You have to make a profit if you want to keep your doors open long-term. “Most customers will understand and appreciate that when you explain it to them,” Thomas adds.

Figuring out how to make that profit has been something the Oakboro staff has focused on for the past four or five years as the dealership’s gone from “big” to “bigger.” There’s more to it than simply holding your prices.

“About the best thing any dealer can do is invest in an industry-specific software program,” Thomas says. “We did in 2004, and the benefits have been unbelievable. We were using a generic off-the-shelf retail management program, but couldn’t get the information we really needed. We bought Charter Software. Right away we started looking closely at our parts inventory. We cleared a lot of dead stock and found our fast-movers. We also started watching our shop productivity. In a few years we’ve gone from losing money in service to 95% efficiency.”N

ow service is a healthy contributor to Oakboro’s overall profitability. It also remains the dealership’s primary business builder. As Thomas points out, anyone can sell something. It’s the service that gets the customer to come back.

For such a large dealership, it’s unique that Oakboro Ag, Power & Turf is willing to service brands it does not sell—even the more inexpensive handheld equipment. Thomas says it’s been a great way to build their customer database, which is now in the thousands. He’s also found a couple ways to make it profitable.

First of all, one technician is assigned to this equipment and works out of a bay at the far end of the service department. He’s neighbored by another two-cycle technician. Commercial turf techs work at the other end of the shop. Larger tractors are serviced in an adjacent building. “Everybody stays out of each other’s way,” Thomas explains. “As long as working on off-brand equipment doesn’t bog our shop down, I’m happy to do it.”

Secondly, Thomas has hired a full-time warranty administrator so the work his techs complete doesn’t go unrecovered. “She’s been a big help because failure to file warranty claims really hurts cash flow,” Thomas points out. The warranty administrator also performs other clerical and sales-support duties as time permits, working out of an office in the back near the parts room.

Technicians stay in the shop, although Thomas is an advocate of allowing them to interact with customers from time to time. Some dealers don’t like this because it cuts into shop productivity. Thomas says there’s a trick to making it work.

“If a customer really wants to talk with a technician, we escort the customer back to the service bay,” Thomas says. “Our guys are good—they can talk and work at the same time. So they don’t really stop working, and the downtime of having to walk out to the front counter isn’t an issue.”

THE ROLE OF ADVISER

This doesn’t happen very often. But when it does, the result is a happier customer. Even for a large dealership like Oakboro Ag, Power & Turf, this personal touch is why so many first-time customers have become lifelong customers.

Thomas and the Oakboro staff take their role as adviser and educator very seriously—not only with technical information, but also business information for their professional customers. “I’m always talking to my landscapers, especially the newer guys, about how business is going and what they’re charging for their services,” Thomas says. “I talk to them about making a profit and planning for that day when they need to replace their equipment. Some listen, and unfortunately some don’t.”

You know who does listen? Oakboro’s more established contractors who often grow frustrated when new cutters come into the market and low-ball. Thomas’ efforts to educate these new contractors and encourage them to charge what they’re worth goes a long way with his established customers. “I have to make money to stay in business, and so do my customers,” Thomas reminds.

PUTTING CUSTOMERS AT EASE

Making money has allowed Thomas to heavily invest in a facility that has arguably become one of the most attractive in the business. A series of expansions and remodels has taken place since 1996, when the business moved into what was once an Ace Hardware and before that a grocery store.

Each remodel project was designed to help improve productivity and create a more appealing environment for a changing customer base.

Here are some highlights of Oakboro’s facility as it is today:
• Dark-wood walls, as opposed to the typical bright white, are designed to create a more soothing atmosphere.
• Checkerboard walkways direct customers from the front entrance to the clearly signed sales/finance counter, and around the showroom past numerous equipment displays. Professional customers are told they can come in a side door, where another pathway leads directly to the service counter.
• Mowers are displayed on patches of artificial turf to create more of a “natural environment” feel.
• Small Christmas trees are sporadically displayed around the showroom all year long to add to the outdoorsy feel. The garland and bright lights come off during the mowing season, though.
• OEM signage on wall displays alternates with signage for Oakboro Ag, Power & Turf. As Thomas says, “It’s important to partner with the right brands, but they aren’t enough. You also need a strong brand of your own these days.”
• Video displays are stationed throughout the showroom.
• Two computers are at the parts counter, one at the sales/finance counter and one in the service department.
• Most sales transactions are handled at the sales counter, although larger purchases, such as compact tractors, are closed in the privacy of Thomas’ office.
• Safety accessories are displayed in the showroom, along with fast-moving blades and belts.
• Other fast-moving parts are stored in four Vidmar storage cabinets that tuck beneath one of the front parts counters—out of the staff’s way but still readily accessible. A couple more Vidmar cabinets are utilized in the back as well.

SUPPORT IS ALL AROUND YOU

Thomas gives a lot of credit to Husqvarna for their help in conceptualizing the store layout—and bringing it to fruition. Partnering with the right suppliers has been critical, he says, as he’s worked to build his business for the past 14 years.

While the drought and other economic pressures have took out a few area dealers recently, Thomas says there still are more than the market really needs—particularly with respect to a certain brand. But it is what it is, he adds, while also pointing out that the key is developing relationships with other dealers so you don’t beat each other to death on price. “You have to become friends and learn to trust each other,” Thomas says. “It’s the only way to survive.”

Aside from suppliers and other dealers, Thomas reminds that a dealer’s biggest support mechanism is his staff. “I can’t stress that enough,” Thomas says. “My people are everything.”
That’s why Thomas invests as much in his people as he does other areas of the business. Oakboro Ag, Power & Turf offers a 401k plan, vacation days, sick days and eight paid holidays.

Health insurance is also offered. Thomas says the dealership has always at least helped employees pay for health insurance, but really started to focus on it when sales grew to about $2 million a year. Today Thomas is proud to say that Oakboro Ag, Power & Turf pays 100%.

“We’d been searching for a way to afford this,” Thomas recalls. “We were looking at our expenses, and credit card fees jumped out at us. We started charging a 3% ‘convenience fee’ for credit card usage (on standard cards such as Visa or MasterCard). We saved around $18,000 in a year and immediately reinvested it in health insurance for our employees.”

The convenience fee doesn’t apply to the dealership’s own credit card, which is provided via GE Money and has been a godsend the past couple of years. Thomas is thankful for the support of all his financial providers, which also include Husqvarna Financial Services, Sheffield Financial and Agricredit.

HUMBLE BEGINNINGS

He’s even more thankful for the love and support of his parents, Heath and Norma, who have been instrumental in the growth of the dealership and its daily operations.

Oakboro Ag, Power & Turf grew from humble beginnings. Thomas was a mortician/funeral director when his equipment business started to emerge. “I’d also had about 200 head of beef cattle, so I had a lot of equipment I was operating around the farm,” Thomas tells. “I needed some sort of workshop to store things and take care of repairs. I began renting a building from a local guy.

“Soon I got in the habit of fixing up old equipment and selling it for pretty decent money,” Thomas continues. “Before you knew it, people were asking me if I sold any new equipment, so I became a dealer for a certain brand I had been operating for years. Things took off right quick.”

The new part-time business started to command full-time attention around the same time Thomas’ mother was being laid off from her job as a quality assurance director. She took the reins of the growing equipment business while her son continued working as a funeral director, though he did back off the cattle farming by now. She hired an employee here and there to keep up with growth, but the booming business was constantly outpacing their efforts. “I told her that the next employee she hired would be me,” Thomas says.

Thomas’ father, a former employee of Charlotte Pipe & Foundry Co., has also joined the family business. “All of our previous careers have helped us build a successful equipment dealership,” Thomas says. “Attention to detail is very important. So is being sensitive to customers. Having been a funeral director, I was pretty experienced in both areas.”

When you look at it that way, serving a grief-stricken family who’s recently lost a loved one is a much more daunting challenge than serving a landscaper whose mower won’t start. In either case, Joel Thomas has always done it with a smile on his face and tenderness in his voice that puts customers at ease. You trust him. And you can trust that more success is on the way for Oakboro Ag, Power & Turf—no matter which road it takes.

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