Getting Ready For The Season

BY SAM STEARNS

The 2023 season is going to have its challenges, as all years do. Our job as business owners/managers is to identify the challenges and get ahead of them. All of us have challenges that are unique to each of our businesses. You may have challenges related to your particular location, your particular health or motivation (hey, it happens!), or with the brands you carry at your dealership. Something that seems to be pretty widespread among dealerships the past few years is personnel challenges, but even something widespread like that will have unique expressions from business to business.

From what I’ve heard, it seems that parts availability is something that will be a little better for dealers on the whole than it was last year. That prospect makes me smile! Also, it seems that whole goods availability is on the upswing as well, which bodes well for those of us who struggled with tumbleweeds blowing through our showrooms last season. Having plenty of product to sell is a breath of fresh air!

Concerning whole goods, though, it seems to me that some caution is in order. After last season, I would think that at least a few of us dealers are tempted to place big orders, when we have the opportunity to do so, if we haven’t done so already. I’ve spoken to just a handful of other dealers about this, and there seems to be some uneasiness in the back of our minds that the demand for whole goods, which was a dream come true for much of the past two years, will be much softer this year.

I may be completely wrong about this, but here’s my simple reasoning

(which is generally the only kind of reasoning I do): For the past several months, virtually all of us are spending much more money than before just to buy life’s essentials. Incomes, on the whole, have not risen with the level of increased spending. Thus, there is less overall expendable income for most households than in the recent past. On top of that, power equipment is a lot more expensive than it was a couple of years ago. The residential zero-turns we were selling for under $5,000 in 2021 are around $6,000 today, and the commercial zero-turn that was $14,000 in 2021 is now nearly $18,000. And the business that can make us obscene amounts of money. Are you flat rating? Are you assigning the right amount of billable time to jobs so that your best tech is billing out at least 125% of his time? Are you adjusting your flat rate times according to the condition of the equipment? How does your recovery rate look in your shops? Paying attention to these metrics will work wonders! depending on the brands you carry, I’m sure some of you have even more drastic price increases than this. But the point here is that many people who were thinking about upgrading to a new zero-turn a year or two ago now feel really uneasy about it. So would many of us.

Second to service is your parts department. Do you have a pricing system in place for your parts such that your profit margin is 48%-53%, yet you’re super competitive on price sensitive items? Do your parts people consistently cross sell? Do they offer an air filter and a quart of ethanol-free fuel along with that carburetor? These are great opportunities to increase your parts department profitability.

With that being said, I think it’s reasonable to expect sales to be more challenging this year, which is why I’m advising caution on stock orders. No one wants an empty showroom, but I’m thinking a showroom full of product when people aren’t really buying is even worse.

If sales are going to be down, or at the very least, we can’t count on them not to be, we need to make sure the other parts of our dealerships are profitable so that we can survive this turbulent economic atmosphere. Service is now as important as ever, both to our customers and to our bottom line. Most of us have an understanding that the service department is the backbone of our dealerships, the most important part of

I’ve said it in this space before, but diversification is another idea that comes to mind. In the Bible, Ecclesiastes 11:6 says, “Sow your seed in the morning, and at evening let your hands not be idle, for you do not know which will succeed, whether this or that, or whether both will do equally well.” For me, selling mini-barns has been a good way to diversify. And lately, I’ve been starting to think about adding a little bit of equipment rental to supplement my income. There aren’t many places in my town that offer equipment rental, and I’ve been told that the main rental place in town needs more competition, so I think it’s worth exploring.

What opportunities do you have where you are? Give yourself a few hours every week to explore and pursue those opportunities, and your odds of surviving and thriving in a difficult economy will become more favorable.

Sam Stearns owns and operates Mr. Mower Man, Scottsburg, IN 47170; e-mail mr.mowerman@hotmail.com. The views of Sam Stearns do not necessarily represent those of Hatton-Brown Publishers, Inc.