While the industry awaits the lift of the recession, some dealers are passively standing by as their businesses are forced to close their doors. Other dealers are seeing the promise and opportunity this affords them as nearby territories become available.
Dealers expanding in the current market are embracing the opportunity and setting themselves up for success by carefully choosing product lines and building a team geared toward accomplishments.
Seeing promise
There is a difference between seeing things through rose-colored glasses and searching for the positive when all others see negatives. While many dealers have their guards up and are taking few risks, some see the promise the industry still holds for a driven individual looking to expand and excel.
Making and keeping goals to grow your business can set you on the path to expansion—provided you don’t let the fears of the market stop you. Dan Weingartz, a Michigan-based dealer, opened his fifth store this year. He saw an opportunity and didn’t let the economy scare him from taking a chance.
“We felt like we were operationally ready to take on another location and that the market that we were going to has a lot of potential for growth,” says Weingartz. “The other reason is that we have everything invested in this business, and regardless of the economic conditions we need to be growing.”
As some dealers close their doors, it creates even more opportunity for other dealers to pick up not only the territories left behind, but the customers seeking service. Dale Magie of Westchester Lawn & Garden in Liberty Township, OH, took over a newly built ACE Hardware that failed to thrive. Under the name MOE’s, the ACE Hardware will sell and service equipment for the consumer market while the other Magie’s location will focus on servicing contractors.
“We are always striving to provide the best service,” says Magie. “We know there are less independent outdoor power equipment dealers and we think there is definitely an opportunity. We want to try to grow our business to be of value. We hope that by having a bigger footprint we will be able to offer more things to more people and be more prominent in the market \place.”
Customers are drawn to the service provided by dealers as they require more for their money. A quality product and the service to help it last is what consumers are looking for—and are finding at their independent dealers.
“As dealers, we’ve always felt that if people only knew of the service and value that they can get at an independent dealer, they would never go to a box store,” says Weingartz. “It seems that as pocketbooks tightened up, consumers spend a little extra time researching options. We’ve seen some sentiment coming back of people wanting to spend locally rather than having their dollars going out of state. Combine those factors with the further maturing of the landscape and lawn maintenance industry, and I think that the outlook for dealers is relatively bright.”
Magie shares those sentiments and thinks being proactive and positive means being competitive, saying: “I’ve always been an optimistic person and I always try to remain proactive in order to stay ahead of the curve.”
Choosing products
With a bright outlook on the market and the desire to grow business through expansion, a plan for implementing growth is essential. Carefully considering which of your product lines to carry over is a good start.
“Our goal was to take a similar selection of product,” says Magie. “We took our strongest and biggest brands to the second location. We thought it would make it easier to educate that team of people to understand and best sell our most profitable lines. By not taking the less in-demand brands we are able to keep a smaller inventory.”
In choosing your product lines, you may have to follow manufacturer limitations regarding territory reach, like Weingartz did. Limited lines doesn’t have to mean limited growth.
“We offer the same product categories and services, but, unfortunately, the brands vary from store to store,” explains Weingartz. “Our model is to have a wide selection of products and brands for the customer to choose from. Some manufacturers don’t share that model, so as we’ve opened new locations our brand mix has changed.”
As the business continues to grow and open new locations, Weingartz is trying to form a select group of brands with which they can build on relationships. His focus is on working with brands that want to help his dealership grow—whatever brand that may be.
“We are trying to get a select group of core brands that we can build a relationship with as we expand into other locations,” says Weingartz. “That doesn’t mean that we never plan on changing the mix in our existing locations, just that we want to have brands that are committed to growing with us.”
Carrying and maintaining a parts inventory between locations is an easy task with the help of a business management system. Being able to check the inventory at other locations with a simple mouse click is invaluable. The computer systems are tied together so we can see each other’s inventory at both locations,” says Magie. “We think that will help in parts sales volume long term.”
The right people
In pushing products and managing the inventory, it’s all about choosing the right people for the job. While some staff from the original location can often be transferred over to see things through—Magie moved an employee of three years over to be an assistant manager at the new location—new hires with the right background can add to the overall commitment to succeed.
In taking over the ACE Hardware, Magie had access to a few of the former employees. “The people from ACE gave us candidates to consider, and then we solicited people we knew were looking for a career change or new opportunity,” says Magie. “We hired a girl as a second assistant manager so we would have someone who knew the ACE side of the business. She also had some people she knew that would fit well in the environment.”
Magie hired the store manager, a gentleman from the grocery business who is familiar with fast turns, and trusted him to hire additional staff with the help of two assistant managers. By trusting them to that task, he feels they have built a staff of employees strongly vested in the business’ success.
“Allowing them to have a say in who is hired makes all of us better about who we are and what we do,” explains Magie. “They take more ownership in their work.”
Continuously assessing the staff and management structure can improve customer service and the business’ success. It is important to find the people and organizational structure that works best for your business.
“This is an area that is constantly being evaluated,” says Weingartz. “We’ve gone from each location operating like its own business with all of the management being at the store to centralizing a whole lot of the management to where we are now.”
All day-to-day decisions and managerial execution for Weingartz is done at the store level with an overall centralized strategy. “I think that as we continue to grow this will be an area that continues to evolve to give us greater focus on certain aspects of the business,” says Weingartz, who is always focused on growth and opportunity. “We feel like the one way to guarantee our failure is to stop being aggressive and let opportunities for growth pass us by.”
