Mid-South Measures Up

With a customer base that is almost all commercial, Mid-South Small Engines in Memphis, TN, saw a successful 2013 and reported sales up nearly 10%. Before the recession hit, the dealership had more residential customers, more product lines and more staff. A little forced change proved to be good business.

Since the recession, owner Rick Reid has worked hard to focus their offering, trim overhead, and attract a commercial customer base that takes advantage of the large parts offering and product knowledge for their choice brands. As Rick sees cues of recovery, they are positioned for top performance in 2014.

Controlling costs

Back in the pre-recession days, Mid-South had a staff of 12 and spent a large chunk of time picking up and dropping off consumer equipment for repairs. Their customer base has shifted away from consumer, and now equipment delivery is reserved for special customers whom it is just too hard to say “no” to.

“Before the recession I had a truck on the road every day picking up and delivering equipment,” explains Rick. “We don’t offer pickup and delivery anymore because it was overhead we didn’t need to be paying. I will pick up, at most, 10 pieces a year, and that is just for older residential people we want to take care of.”

The commercial cutters who make up the bulk of the customer base now are handling a lot of their equipment maintenance and small repairs on their own. While that has meant less traffic in the shop, Rick's service department has the ability to focus on high-dollar repairs while the parts department pushes higher-margin parts sales.

Rick says narrow wholegoods margins have been a challenge in recent years with the increased cost of doing business. He has kept an eye on margins all the while, utilizing his business management system for over 25 years to track expenses, plan and price accordingly.

We have been computerized since 1988,” shares Rick. “I knew it was something we needed to do. We have a real handle on inventory, sales, accounts receivable and payroll. With c-Systems Software everything is so concise that the bookkeeping is not a hard job.” Rick runs a profit and loss report and the end of each month to assess costs and make adjustments where he can. The staff size has been adjusted to seven full-time employees.

“We are doing more business with fewer people,” says Rick. “Everyone has to work harder.” Rick, now 64 years of age, is no stranger to hard work, having been in the business since his teens. Much of his staff has been with the dealership for 30 years or more and are dedicated to the team’s success.

A focused brand offering

The Mid-South staff has seen various equipment lines come and go over the years. Rick has chosen a small group of brands which he says allows him to be focused and offer the best in parts and knowledge for those brands.

“You don’t need three to four lines of zero-turn mowers,” says Rick. “You just end up splitting up the pie. We do a great job with fewer lines.”

When lines were focused, sales were not lost, but shifted to remaining lines. Rick says customers also like the focused brand offering because it means their parts inventory is plentiful. Having fewer lines has helped Rick to grow a larger parts inventory for those brands.

“Customers know when they walk in the door that we will have what they need,” says Rick. “If you carry four lines of zero-turns, you can’t afford to carry all that inventory in parts and still be sure it stays filled throughout the busy season.”

Mid-South commercial customers who do their own maintenance can take advantage of a spring buying program as well as discounts throughout the year on bulk purchases.

Equipment trends show signs of recovery

Available for rent at Mid-South is a Toro Dingo Compact Utility Loader that is out for rent consistently two to three times per week. The units are also available for sale, but Rick made a rental unit available to contractors when the recession pushed the market’s focus more toward landscape maintenance over installations.

“Our sales on the Dingos have been way off the last few years since the economy went south. Most contractors were focusing on maintenance through the recession because the landscaping (installation) side wasn’t there for a while,” explains Rick. “There is a big difference in price when renting vs. buying, and most contractors will rent one for quite a while before buying.”

Rick says his landscaper customers are using the compact utility loader with a trencher attachment to put in irrigation systems, with an auger for planting shrubs, and a soil cultivator for preparing the ground for sod. This is just a list of the popular choices. There is a full line of attachment options available for rent. While the Dingo has been popular for rental in recent years, Rick is seeing more contractors buying the units—and is glad to see signs of recovery in the market.

“We are seeing more Dingo sales now,” Rick shares. “What slowed down with new landscaping is starting to come back, and contractors are seeing more landscaping and irrigation jobs than they did two years ago.”

As the recovery continues, Rick has plans to add another technician and salesperson to the Mid-South staff in the future. Whether renting or buying, Rick and his team at Mid-South are prepared to offer the product knowledge, parts and service to meet their customers' needs.

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