Right Place, Right Time, Right Approach

St. Louis-area's Heavy Duty Equipment sells everything from mowers and excavators to trailers and fertilizers.

Joe Tegethoff, general manager
Joe Tegethoff, general manager

Joe Tegethoff has never owned a lawn equipment dealership. But he knows a thing or two about running one. After all, he has spent nearly his entire professional career in that capacity. "I've always been the No. 2 guy; you know, the one who does all the work hiring, marketing and managing, but doesn't technically own the business," Tegethoff says with a chuckle. He's loved every minute of it, though.

Tegethoff got his Green Industry start more than 30 years ago when he began working for a grass seed, fertilizer and irrigation supplier. Then he accepted a new job as an outside salesperson for an upstart golf equipment dealership called Outdoor Equipment. The owner passed away roughly five years later, leaving the dealership's reigns in the hands of his 20-something-year-old son. A year or so after that, Tegethoff was tapped to serve as general manager.

The business grew steadily over the next several years. Ultimately, 25 years later, Outdoor Equipment had three locations and sales in excess of $25 million. But the golf industry was softening dramatically. The owner decided to cash in his chips and close the business, setting in motion a roughly two-year liquidation process.

What started out as a depressing chain of events suddenly turned positive.

"A customer walked into our main store one day," Tegethoff recalls. "He was a well-known real estate developer who owned several businesses, including a golf course. He'd been giving us a lot of business, so we knew each other very well. He asked what I was going to do now that the dealership was closing. I said, 'Guess I'll just have to find another job.' He replied, 'Come see me, I have an idea.'"

When the market opens, fill it

That idea was to start up a brand new equipment dealership that would fill the gaping void left by Outdoor Equipment. This time, however, the focus wouldn't be golf courses, it would be landscape contractors.

"This gentleman, Joe Scott Sr., owned some of the oldest buildings in Chesterfield Valley; prime retail property," Tegethoff says. "So we started out in this old concrete building with a metal roof, no insulation, and a garage-door entrance. It was the classic tractor dealership. Some might have considered it a bit of an eyesore, but it worked. In four years we were doing over $1 million."

This new, rapidly growing dealership—Heavy Duty Equipment in Chesterfield, MO—sold a variety of lawn equipment from leading brands like Dixie Chopper, Exmark, Grasshopper and Stihl, along with lawn and garden supplies such as grass seed, fertilizer, pesticides and ice melter. It also had a nice sister business that sold trailers. Heavy Duty Equipment was indeed fulfilling its vision of being a one-stop-shop for busy landscape contractors.

It was getting more difficult, though. Sales continued to grow from 2010-12. Heavy Duty Equipment was now cranking out $4.5 million a year. "My boss said, 'Joe, you've outgrown this building, and if we don't do something soon you're going to start going backwards," Tegethoff tells. "He owned a building that used to be a Hummer dealership, but had been sitting idle for a while. It was just a quarter mile from where we were. We moved into that building in late 2012."

Heavy Duty Equipment's next big break soon followed. Tegethoff had been wanting to add the Kubota equipment line to his offering for several years. Heavy Duty's previous facility, however, was preventing that from happening. Now operating from a gorgeous, more modern building, attaining the Kubota line became a real possibility.

Possibility quickly became reality. "We started out with Kubota construction equipment only, which was their track loaders and excavators," Tegethoff points out. "It was an immediate shot in the arm, to the tune of about $1.5 million in the first year. We're really excited about Kubota. Now we're also adding their tractors, mowers and utility vehicles."

Heavy Duty Equipment's other equipment lines also received a nice shot in the arm after moving into the new facility. For instance, Heavy Duty has grown to become Exmark's top dealer in its EDS (Exmark Direct Sales) territory, which comprises more than 300 dealers in 17 states from the Mississippi River to the Pacific Ocean.

Growing supplies business

The dealership's supplies business has also been growing, and represents an area of enormous potential. "We have a full line of grass seed, fertilizer, pesticides and ice control products," Tegethoff says. "I buy all of our seed direct from a supplier in Oregon. So we're not 'barely' in the supplies business, we are 'totally' in it."

Tegethoff has made a key hire to further grow this business. "This guy has a great following of lawn professionals from his time with John Deere Landscapes," Tegethoff explains. "He'll be working in the dealership so that when customers call with questions or to order product, he'll be here to help them."

Heavy Duty Equipment is already feeling the positive effects of this new employee addition. "We shared a mutual customer," Tegethoff says. "This contractor told me that if I hired this new employee, he'd give me all of his supplies business. That's huge. Think about it: The typical lawn care contractor does four fertilizer applications a year. So for each round, he's ordering two tractor trailers of fertilizer."

In addition to this key in-store employee, Tegethoff is also looking to hire an outside salesperson. "We fully expect to at least double our supplies business," he adds.

Commercial cutters still the bread 'n butter

A good chunk of Heavy Duty's customer base is made up of contractors who provide mowing and maintenance services in addition to fertilizing and lawn care. Some, however, only provide one or the other. Whatever the case, Tegethoff and the Heavy Duty crew want to earn each given customer's loyalty. Doing so, first and foremost, comes down to speedy, reliable equipment service. "But it's also our willingness to listen and understand," Tegethoff says.

Employees obviously play a critical role in that. Tegethoff says he has as good a group as he could ask for. His parts staff was with him for years at Outdoor Equipment. "They're veterans of this business, and they get what customer service is all about," Tegethoff says. As for Heavy Duty's service department staff, there are four technicians, one assistant, and a service manager. Three of the four techs are under the age of 35, dispelling the notion that it's impossible to find younger talent.

"Each of our technicians came to me saying they wanted to work here because there really isn't a shop like ours around," Tegethoff points out. "Our service department is well-lit with painted floors. Each service bay has a lift."

Properly equipping employees, especially service technicians, is a big part of attracting good talent to come work for you. Then there's the body of work itself that also plays a role.

"We focus on commercial cutters," Tegethoff reminds. "They can be demanding, but it's easy to appreciate why. Homeowner customers, on the other hand, can also be demanding—for the silliest little things. You can take more grief over a $90 homeowner repair than a $3,000 commercial engine replacement. Repairing homeowner-grade equipment that our dealership did not sell can really bog down our service department. So we try to avoid that and focus on our commercial customers. I mean, we take care of all our customers as best we can, but we definitely want to remain focused on the commercial cutter."

Making a good thing even better

Roughly 80% of Heavy Duty Equipment's total sales come from commercial customers. Honing in specifically on riding mower sales, it's more like 95%. That's right where Tegethoff and the Heavy Duty crew like it. "We have landscape contractors telling us they want to do all of their business with us," Tegethoff says. "Some of them are larger companies buying fleets of mowers, along with fertilizer, seed and so on. That's who we are in business for."

It only makes sense, Tegethoff adds. If the equipment dealer can help his customers make lawns healthier, those lawns are going to require more maintenance. That's a win-win for both the dealer and the landscape contractor.

As sales continue to grow in the new facility, Heavy Duty Equipment's owner is again starting to see warning signs of stagnation on the horizon. "You're either moving forward or you're moving backward," Tegethoff says. "We're putting up another building on the property. It should be ready sometime in April. For this year we're simply going to use it for storage. But in 2016, we have plans to open up another business. You'll just have to wait and see what that is."

Tegethoff says a good motto to live by is, "Working for today, planning for tomorrow." That's exactly what he and his staff have done for the past 10 years since first opening Heavy Duty Equipment in the summer of 2005. They're lucky, Tegethoff says, to have an owner who sees potential—and is willing to invest in it.

With respect to marketing, Tegethoff is investing in a few new projects to continue drawing in new customers in today's increasingly digitized world. First, he's having Heavy Duty's website redesigned. "There will be more content on our website than just about any dealer you can find, with very few links leaving our website," he explains. Second, he's having a mobile version of that website created.

Third, Tegethoff is taking advantage of something called Google Business View. "This was just too good to pass up," he relates. "You can get a photographer to come to your business and take like 20 different photos. So people searching online who find our Google Business listing can now see a 360° view of our dealership, along with all kinds of different angles of our showroom."

When you have a facility like Heavy Duty Equipment's, it makes perfect sense that you'd want to show it off. Once customers are in the doors, Tegethoff says his staff's experience—and willingness to listen, understand and help solve problems—does the rest.