Rick Cuddihe believes if commercial equipment dealers want to succeed, they need to think like their customer’s customer.
“If we put ourselves into their minds,” he says, “we’ll be well served.” Cuddihe, who has been active in the OPE industry for more than 30 years, addressed dealers during his EXPO seminar titled, “Benchmarking Your Business: Steps and strategies that work" at the International Lawn & Garden Equipment Exposition in Louisville, Ky.
Dealers must practice “disruptive innovation” that will take their businesses to a different level, Cuddihe says. Case in point: Sony. “Sony was the first company to put a radio on your head,” he says, citing the Walkman. Before that, no one considered the device. Now many couldn’t imagine life without portable audio players.
Every business owner should create an executive summary, Cuddihe says. While the document can be just a few pages, it should tell people such as partners, financial providers and customers who the dealer is, what plans they have, and how they intend to reach their goals. Without it, a business owner will founder, he says.
Cuddihe says dealers should be earning a six-figure salary. “I talk to dealers,” he says. “Some of them don’t make $112,000. But we can do this. We just have to apply ourselves.”
Cuddihe says dealers can learn a lot from people like Dave Wood, owner of Smitty’s Lawn & Garden Equipment in
Dealers must understand that Big Box stores such as Lowe’s and Home Depot aren’t cyclical, like most dealerships, who might not make any money in some months, Wood says. “But I have a parts and service department that is benchmarked against the best in the industry,” Wood says.
Dealers can be their own worst enemies, Wood believes. They often sabotage themselves when dealing with parts, he says, when there aren’t good systems in place for tracking. “If you tell a customer you have a part only to find out that you don’t, you’ve lost a customer,” he says. He utilizes barcodes on all parts. “I have parts cabinets for all our products so I know where it all is,” he says. When a dealership is organized, “customers feel like they’re being helped more quickly, which means they’ll come back,” Wood says.
“When I bought my business, customers have to stand in line to drop off mowers,” Wood says. That’s when he decided to adopt a “drive-through” model, where customers can check in their mowers for service in three minutes. “The largest issue for customers was, ‘Why do I have to stand in line here? Why.’ They’re used to McDonald’s where you get things quickly.”
Phil Danhauer, chief of the finance division for the U.S. Small Business Administration, says three types of people will start or operate a business: a salesperson, technician, or a bean counter. “If you’re not a bean counter, I highly encourage you to find someone who is and make sure they’re involved,” Danhauer says. An eye on details is what will help a business survive.
For example, government statistics show one in four businesses do not re-open after a natural disaster. Attention to the critical parts of a business can help avert financial ruin. “You have to make sure you have all your critical activities covered,” he says.