No dealer, regardless of size or past performance, is immune to the mainline’s requirement of a well thought-out and defensible succession plan. As some dealers have already learned, there’s no avoiding it. Fail to follow the discipline of outlining your business’ future and your OEM, eventually, will make the decisions for you. Five dealer-principals share the various paths available, lessons learned and the type of depth and detail needed to meet the major-line’s contract-approval requirements.
“Preparing the Next-
Generation to Take Over”
Tim Young, General Manager, Young’s Equipment (2009 Dealership of the Year). Young founded his company by taking over a bankrupt dealership in 1988. Today, it is a 7-store, 200-employee operation that recently passed $210 million in sales. A lifelong learner who recently returned to earn his MBA, Young shares a detailed plan (including education/training, timing and execution) for grooming the third generation, his son, into the business. Privately-held, family-owned enterprises still have a place in this industry, says Young. “It gives you the flexibility to be nimble in the market and go above and beyond when taking care of the greatest asset a business has; it’s people.”
“Recruiting, Retaining & Rewarding: RDO’s Home-Grown Succession Plan”
Keith Kreps, Vice President of Agriculture, RDO Equipment Co. (2010 Dealership of the Year). The nation’s second-largest equipment dealer group (62 stores in 9 states), RDO Equipment Co. learned during its publicly held years (1997-2003) that growth opportunities are stunted without a stellar training and development program. Today, RDO Equipment Co. considers training a core strength. Its initiative includes multiple opportunities for all team members, and an impressive curriculum to bring along the next generation of management talent. Kreps, who joined the company in 1998 after working in the automotive industry, is responsible for all the firm’s agricultural dealerships.
“Succession Planning &
The ESOP Solution”
Clint Schnoor, Chief Operating Officer and Director of Agri-Service Inc. (2012 Best-in-Class Dealership). The 9-store Agri-Service celebrated its 20th anniversary in 2010 with an Employee Stock Ownership Plan (ESOP) that made each of its 170 employees “owners” in the business. Schnoor, who oversaw the planning, structure, transaction and implementation of the firm’s ESOP, explains the pros/cons of employee ownership, the cultural and operational changes involved and shares solid advice 2 years into the change.
“Building A Multi-Owner
Board of Directors”
Mark Foster, Ag Division Manager, Birkey’s Farm Stores Inc. (2007 Dealership of the Year). Mark Foster, who has been with this 13-store dealer group for 29 years, outlines the decisions and lessons learned with this unique 6-owner arrangement, the keys to structuring buy-ins/buy-outs and how a solid board of owners (all with direct-line management responsibilities) is finding total-entity success by subordinating to the firm’s larger concerns.
David Meyer, Chairman & CEO of Titan Machinery Inc. (2006 Dealership of the Year). David Meyer started in the dealership business as a partner in two dealerships in 1976. Today, he heads up a giant 98-store dealer operation that employs 2,500 and covers 9 states and two European nations. You’ll understand the logic of M&A during this economic climate as well as the how’s, why’s and challenges of establishing itself as a publicly-held entity.