“Are you nuts?” That was the reaction I received when I proposed the idea of selling our equipment dealership. My partners, all in their thirties, were shocked. By their reaction, it was obvious that they were not clear on the reasons behind the suggestion.
Taking a deep breath, I began to explain. “The equipment industry is full of cats and full of mice. Right now, we are a cat. We are not the biggest cat but with our current business volume, we are positioned as a cat.”
My partners failed to see the analogy, they continued to fire back, “Sell the store? Are you sure? For what reason?” They correctly pointed out how sales volumes in all departments had grown since acquiring one of our locations and how profitable and lucrative the business had become.
We had instituted wholegoods processes where new or used equipment did not have birthdays. Th is was done without using auctions. The aftermarket departments were on the upswing.
Service was booking more than 100 winter inspections per year, which were feeding the aftermarket departments. We were innovative in both the agriculture and consumer markets, which led to sustained growth. All departments were in top operational performance, which resulted in achieving net income benchmarks. We had low stress, high income, and life was good.
To their comments, I calmly responded by telling them that we were getting the most out of this location. More growth would only be realized through buying market share. We had already decided to not buy another location.
I provided another question to think about. “If we maintain operations at the current volume and decide not to sell the store, how long will it be before we roll over and become a mouse?”
We all know where an old, beat up dealership sign stands. At one time, there was an active and healthy dealership in that location. Many of those dealers were cats in their day but, through no fault of their own, they became mice. We were determined not to make that same mistake.
Western Equipment Dealer Magazine Summer 2018 Issue
By Trent Hummel