Above photo: Capital Tractor in Greenwich, N.Y., has a diverse customer base from municipalities to large dairy farms and everything in between.
In the nearly 50 years that Capital Tractor has been in business it has operated as many as 3 stores. But today, the Greenwich, N.Y., New Holland dealer is a single-store dealership and president Jamey Gibson doesn’t see that changing.
“We changed and evolved as the customer base has changed. We used to get caught up in the idea that we needed to be a multi-store organization; we tried it and it didn’t work for us,” says Jamey.
When he took over ownership from his father, Peter, in 1991, Capital Tractor had multiple stores, one being only 35 miles away. Jamey says that perhaps the proximity of the locations was why it ultimately didn’t work, but he’s happy with the one-store model the company operates under today and is finding success with it. “We do more out of one store than I ever did with multiple locations,” he says.
Jamey describes the people at Capital Tractor as very community oriented. “We built that into our business, and when I had the second store I wasn’t able to duplicate it,” he says.
One of the challenges with the other location was not having an owner on site and Jamey wasn’t able to be there every day himself. He has three other partners in the business, including his son Dustin Gibson, but Jamey Gibson says they are very involved in the Greenwich store. “If you took them away from here, it would take something away from this location,” he says.
Capital Tractor, Greenwich, N.Y.
Main Line: New Holland
Shortlines: Mahindra, Land Pride, Great Plains and Unverferth
Customer Base: Dairy, hay, horse farms
2014 Revenue: $22 million
From 1998 to 2010 Capital Tractor had 2 stores, the current store in Greenwich and another one in Latham.
During that stretch, sales manager Dustin says it was a near constant struggle to duplicate the company culture at the other store. “It was under a bit of turmoil when we took it over, and we had a lot of turn-over of staff,” he says.
When the Latham store was closed, Dustin says there was some apprehension about what it would mean for profits. “We were all thinking, ‘OK, this is going to sting a little bit. This is going to hurt our revenues and profit.’ The very next year, our expenses were down and our revenue was up and as a result our profit was up. At that point, we knew the multi-store thing may work for some people, but we were geared to be a single-store organization,” he says.
Capital Tractor continues to serve the Latham customer base and added a service truck specifically for that area upon the store’s closing. “That driver is still getting 60 hours a week. He’s getting a lot of service calls. We proved to the customer base that we can serve them as well, if not better, out of this location,” says Kevin Armitage, operations manager.
Attitude is Everything
Capital Tractor sponsors successful interns at State University of New York (SUNY) Cobleskill to help prepare them for the workforce.
A large part of Capital Tractor’s success can be traced back to its team approach to the business.
“It’s something over the year’s I’ve really pushed hard to keep under control, every department gets along. It’s a team effort. The sales department gets along with the service department and the service guys get along with the parts guys,” says Service Manager John Mattison. “You may hear a little grumbling once and a while but there is never a riff. If there is a riff or a real problem, it’s either resolved quickly or someone has to go.”
Mattison says the dealership has a zero tolerance approach to bad attitudes. “I let a guy go a few years ago. He was a good employee as far as his performance. But he was a sour apple and you can’t have that because it spreads like cancer,” he says.
Planning for the Future
“I’ve seen a lot of dealerships that have dissolved into nothing. We don’t want to be in a situation where all we have left is the real estate. That means a lot to me,” Jamey says. “I had the real estate when I bought it, and to think 10 years from now we still have the real estate, but we had to take 50 cents on a dollar on parts because we’re closing up the store, isn’t in our plans.”
Capital Tractor President Jamey Gibson (l) brought on three partners — son Dustin Gibson, sales manager; Kevin Armitage, operations manager; and John Mattison, service manager — 6 years ago as part of his succession plan.
To ensure the dealership stays alive, Gibson brought on three partners as part of his succession plan about 6 year ago. The partners, Armitage, Mattison and Dustin, all play an integral part in Capital Tractor’s current and future success.
At just 55, Jamey isn’t planning on hanging it up any time soon, but he rests easy knowing Armitage, Mattison and Dustin are capable of fully taking over the dealership tomorrow, if need be. “In my day-to-day activities with them, I’m more of a coach. I’m not a control freak; they control things. That’s how I want it. It’s all structured so they’re involved in it together,” he says.
“My philosophy is you have to empower people to make decisions. They’re going to make mistakes. I made mistakes, and you have to build that into what’s going to happen. But also there’s an end reward for being able to do that for these people. It’s the same with my son. He heads up the sales department and yes, there are times when there’s a little too much inventory, but when you have one store, not having enough equipment is almost as bad as having too much equipment,” he says.
Dustin respects his father’s approach. “He’s certainly there if we need help with a decision but he has the type of management style where everyone has to make their own decisions and run their own part of the business. And that’s good,” he says. “I’ve see a lot of these businesses where someone can’t hand over the reins after 30 or 40 years and it’s good to work with him in that regard.”
For now Jamey remains the majority shareholder in the company, but Armitage says the groundwork has been laid for a succession plan and Mattison, Dustin and he will slowly take on a larger percentage of the ownership.
As for when Jamey thinks the time will come that he’s ready to retire he says, “I think that’ll actually happen on its own; I’ll walk in one day and say, ‘Yeah, it’s time.’”
“We used to get caught up in the idea that we needed to be a multi-store organization and we tried it and it didn’t work…”
Detached from Used Equipment
While Capital Tractor’s used inventory is never where Jamey would like it to be, he says having excess used equipment isn’t a huge problem for the dealership. “Of all the assets you have, that’s the one that depreciates more quickly than any other,” he says. “I would be happiest if there was none, but it’s a necessary evil. You have to have it, but we do a tremendous amount of wholesaling. There’s a truck here every week taking a load out.”
Jamey stresses that he’s not attached to the used equipment inventory. “I don’t care and I don’t even wave to it when it goes out,” he jokes. “There’s going to be days when I take a hit on a used piece. Maybe we overvalued it or maybe the market has changed. But we’re not attached to it.”
The tough part of the business is with equipment like used self-propelled forage harvesters where the turns are too slow. Jamey says choppers are the one piece of equipment he makes an exception for when it comes to trades because they always need to have one on the lot for customer emergencies. “You’re dead in the water if you don’t have one in the yard and a guy goes down,” he says.
“We took one in trade last September and by the time we get it in here and go through it, we don’t have a shot at selling that unit until the following summer. And chances are, we’re not going to sell it until September in corn season,” he says. “I can honestly say that’s about the only piece that I keep in the yard for any length of time.”
Empower your employees and managers to make decisions for themselves. They may make mistakes, but it will help them grow in their roles.
Be selective in the equipment you take in on trade. If you don’t think you’ll make money on the piece down the line, turn it down.
Listing used equipment on your website, along with photos and details can help attract customers and help move the inventory.
When it comes to other types of equipment, Jamey says the first factor in whether they’ll take the trade is if it’s a piece Capital Tractor sells and services. “If it’s ours, we know the equipment and we’re not paying retail for parts to fix it. With the other brands of equipment, it’s first come first served,” he says. “We know we lose some money on some of the stuff. And if somebody’s telling you they don’t, they’re not making money on the front side.”
He adds that if it’s a high-end, quality piece or an attachment they think they’ll be able to make some money from “there might be a little bit of a passion to keep it for a little while.”
The dealership has all of its used equipment inventory listed on its website along with photos, stock number, style and number of hours. One thing Jamey would like to do that the dealership isn’t doing currently is posting videos of the equipment on the site as well. The biggest challenge will be finding the people and time to make it happen, he says.
Capital Tractor’s formula for taking in trades and managing its used inventory seems to be working. In 2014, the dealership achieved 3 turns on its used equipment inventory. Not one to settle, Jamey adds, “It could be quicker, but there’s a fine line there, too.”
By putting the right people in the right places, taking a community focused approach to doing business and a hardline on what type of used equipment they’ll take on trade, Capital Tractor has found greater success as a single store than it ever did when it had multiple locations.