Dealer Battles Drought, Cut Costs

Quik-Kut Hi-Performance Lawn Equipment was founded as a Rotary distributorship in 1985 by Hinton DeLoach and Bruce Purcell. The company built its reputation as a parts house before branching into equipment sales a few years later, becoming one of the first Scag dealers in southeast Georgia. "When we first started out, you had to drive all the way to Atlanta to find a commercial mower," says Quik-Kut manager Bruce Purcell. "Now there are nine zero-turn brands within a three-mile radius of our main store in Claxton. But we were one of the first with Scag some 20 years ago, so we sort of got an early start with selling commercial lawn equipment."

Quik-Kut proceeded to build up a good commercial customer base, roughly half of which were governmental accounts. Unique services designed to set the dealership apart from other area dealers helped win business from landscapers and homeowners. Quik-Kut also continued a substantial parts operation.

Sales growth accelerated a few years ago. That, coupled with an emerging, virtually untapped market roughly 40 miles away, prompted the decision to expand.

"We were growing very well in 2005—right up until July," Purcell says. "We decided the time was right to open a second store in Hinesville, about 40 miles southeast. Fort Stewart and Wright Army Air Field are down there, and the area was booming from military growth, so we went for it."

Then everything changed when Hurricane Katrina hit the Gulf Coast in August 2005. The federal government sent billions of dollars to the area to help it recover from the country's worst natural disaster. At the same time, the War in Iraq was raging, so government spending in many areas was drastically reduced. "My governmental accounts purchased strictly what had to be purchased for immediate use," Purcell recalls. "Instead of 20 blades they would only order five."

Then the drought set in. South Georgia finished around 12 inches behind in rainfall for 2005 and another 16 inches for 2006.

Purcell tells, "Grass wasn't growing, so landscapers were hurting. Pecan growers had a bad year, as well as hay, cotton and other farmers who were consistently good customers but just weren't able to buy from us like they usually did. Even the crab and shrimping industries were feeling it because crab and shrimp need a certain amount of fresh water to reproduce in the marshes and creeks. The timber industry was affected because more trees became accessible with the dry weather conditions." Oh yeah … gas prices were skyrocketing, too, putting a real damper on consumer confidence.

"We couldn't have picked a worse time to expand," Purcell says. "I realized I was really going to have to dig in to make it work."

Crisis Control

The tendency is to want to sell yourself out of a downturn, Purcell says, but that clearly wasn't going to happen. "You can't put someone in a headlock and force them to buy a mower, especially in a dust bowl," he adds. So Purcell brought in an analyst to help find ways to cut expenses until the market turned back around. By pinpointing just a few line items in the budget, the dealership put roughly 3% back to the bottom line.

For example, Quik-Kut had five insurance policies: vehicles and trailers, building and contents, health, life and workman's compensation. The annual cost was $48,500. Purcell sat down with his insurance agent to readjust his policies while still allowing for adequate coverage. Monthly premiums were cut in half.

The dealership was paying $1,200 a year for bottled water. "We have water fountains," Purcell relates. "I don't even remember how it came about that we thought we needed bottled water. So we got rid of it."

Similarly, Purcell saw uniforms as a large cost. He realized employees could still look professional by adhering to a dress code, so the $4,800 a year the dealership was paying for uniforms was put to a halt.

At the same time Purcell was making some hard cuts to the budget, a technician left. Purcell hasn't hired a replacement, and doesn't foresee the need to right now.