Chris Werner views how the BCP Equipment Dealership Network, which includes BCP Equipment, Sunset Kubota, Valley Kubota and Cache Equipment, operates as an upside-down triangle.

“It’s cliché, but it’s really the way we try and do things, because the parts counter people, technicians and salespeople are the ones making our dealership money. The managers are now underneath them to give them the support that they need,” he explains. 

While all part of one larger organization, connected by a board and ownership, the 4 stores operate mostly independently of each other. That autonomy is something Werner believes helps empower each location and its staff to make decisions that are best for the customers and the stores and not depend on leadership for all the answers.  

Werner joined BCP in 2019 as CEO and before that had been a regional sales manager for Kubota. His experience also includes time as a director of sales/general manager for another dealership and time as a TM for Salford Group and a regional product specialist with CNH Industrial. That combined dealership experience and OEM experience now helps guide him in leading the 4-entity 3-store Kubota, Massey Ferguson and LiuGong operation. 

Recently, the organization moved Sunset Kubota in Ogden, Utah, under the same roof as BCP Equipment in Farr West, Utah. The two still operate independently of each other, Werner says, but share a facility. The BCP side of the facility sells and services construction equipment, its mainline LiuGong, and Sunset sells Kubota Land Pride, Rankin and General Implement equipment. 

Farm Equipment: How does your OEM experience influence your management style?

Werner: I feel very fortunate to have that, because I’ve been able to learn a ton, starting off at the dealership and then going to the OEM. 

Learning what’s important to them, what drives OEMs to make the decisions they make in order to communicate what they want their dealers to achieve. For the most part, everybody wants the same thing. 

I feel confident in making that statement because I’ve called on John Deere dealers, I’ve never worked for John Deere, but as a TM for the Salford Group I was able to learn about Deere dealers as clients and their customers. Market share drives, volume drives, and beyond that it’s the differing ways that the OEMs strategize or try to come up with solutions to gain that market share or to increase the volume.

The OEMs that I’ve worked for have taught me a great deal. Working for Kubota, calling on a $5 million total revenue location, and then working for Case IH and having the opportunity to work with a powerful dealership like Titan Machinery, a publicly-traded company, in most regards, there’s just absolutely no comparison. How it’s influenced me, honestly, is how we try to run each of our locations and differentiate ourselves from the competition.

The homeowner who pays $20,000 for their tractor to use for hobby farming or maybe to clean up their yard, should be treated as well as the farmer that’s purchasing a three-quarter of a million-dollar piece of machinery. 

That’s the culture we want at all of our locations — that homeowner is just as important as the farmer and should receive the same attention and service after the sale.

Having been on the OEM side and the dealer side has enabled me to see numerous different, but successful, strategies that can be executed to create a profitable, robust, high integrity cultured dealership. Various tactics may need modification to fit our dealerships, but the different OEM approaches will work.

Taking great ideas, that are not proprietary of confidential, and modifying them to fit usually results in success as long as it’s executed correctly. I learned this coaching basketball and volleyball.  

I used to watch college programs run drills, and I would know, “OK, I don’t have the athletes to be able to do this, but I can modify this to where this will benefit us, make us better and have a greater chance of winning.” 

That OEM experience is a lot like that. It’s the big multi-line dealer who at one location may do $100 million a year in revenue, down to the Kubota dealer, that’s doing $5 million a year in revenue, and saying, “Wow, that $5 million dealer actually does this or that better than the $100 million dollar dealer,” after looking at comparables which are not always gross profit margin, net profit margin, and other key financial indicators. 

OEMs, definitely to their credit, want all customers (consumer or commercial) to feel important and be taken care of. This is a goal I have had since starting out as a salesman and learning how to accomplish it at the OEM level from training and great mentors. 

They’re vastly different worlds, but one of our dealership’s successes comes from treating the homeowner as we would as a big construction customer or commercial producer.

The conversations that take place at the corporate level, we have to have at the dealership level, knowing what metrics really matter to them, making sure we’re meeting those metrics, all while striving to achieve maximum profitability. Being able to know what OEMs want because I have been in that world is very beneficial. 

FE: What do you do to encourage an entrepreneurial spirit in your team?

Werner: Empowerment, accountability, responsibility. Our goal is to be decentralized with the balance of knowing all entities/locations are working for the same goal.  

Sometimes with one of our OEMs, even though we are separate entities, they get clumped together and are judged on metrics, KPIs, etc. So not only for that reason, but obviously when everyone works together with a common goal (everyone is rowing the boat the same way so we don’t go in circles) all employees, customers, entities and locations have increased success, increased profitability, increased happiness, and for ownership (very important) an increased EBITDA.  

Empowerment, autonomy, trust but verify and creating a culture of ownership at each location is the driving force behind the entrepreneurial spirit. Point blank, “This is yours. This is your baby. This is your business.” 

If you are the service department manager, this service department has its own P&L section, so you can see the revenue, you can see the costs associated with it, and you can see your expenses. 

Now, at the bottom line, that net income line, that really matters, and we want each department manager to be in tune with that and understand absorption rate, effective labor rate, tech efficiency & productivity rates. These examples make everyone who wants to learn, know and understand them more valuable.  

FE: Looking at dealer consolidation and M&A activity, how do you think that’s impacting the industry in general and what competitive make looks like now with how much is going on?

Werner: What I have noticed in the current climate, and speaking with other dealer principles, GM’s, and such; the EBITDA of dealerships that want to sell have made it very one-sided to where the large (in terms of cash flow; current/liquid assets) are able to purchase the majority of the dealerships that are being acquired, because of the High Multiples.  These high multiples aren’t just off financials, but I think because the United States seems fairly saturated with the Major OEM’s (obviously I could be wrong here), but the Contracts between the OEM’s and Dealerships of what they can sell are calculated in the equation of what type of multiple an acquirer is willing to pay.  I can’t say I know, but it would not surprise me if there are OEMs forcing dealers to sell to other dealers because they’re just not financially viable anymore or have been underperforming in terms of Market Share, Volume of units being stocked, etc…   

This topic/question is one that would be a really great case study because of all the variables that would have to be taken into consideration: EBITDA(s); Revenues; Profit Margins; Number of Locations; Single Line or Dual Line; Logistics (where do parts come from, where do wholegoods come from); On and On.

As far as our organization, we are always open to expanding in Utah and/or other states. Another advantage to the previous question regarding ownership structure; the board and ownership are always willing to look, review, listen, analyze opportunities even if that means starting something from the ground up.     

FE: What are the benefits of the private investment ownership? What role does that play in the actual management of the business?

Werner: Autonomy is one of the most important factors, because they have other businesses. They have to know what each business is doing and they have to trust that whoever is in charge of the other businesses are performing. Another great benefit of private ownership are the high business IQs they bring to the industry. They’re not obviously the run of the mill, dealer principle, but this has been my professional life like a lot of generational dealerships. They’re looking at things from a perspective that would be extremely hard for anyone that their entire lives have been the equipment industry. Their ability to be able to look at it from a plethora of different views is not something you can put a price on. The advantage of owning other businesses and analyzing something in the equipment business while asking the question, “Hey, does this translate or does this work?” is impossible to find without businesspeople like these.

I know it benefits us to have an ownership with strong business acumen and high business IQs. Our Board, which ownership is a part of, also comes at it from totally different angles than you might ever think. The luxury of a diverse board allows for ideas to be brought from other businesses and allows us to implement it into our dealership’s business with most of the time it working when executed correctly. 

Our ownership and board not only bring intelligence, but more importantly wisdom. They analyze and review things from 30,000 feet, but if there look to be any questions they are quick to dig deeper. It’s another advantage we have because of the diversity of businesses, experience, backgrounds, etc… 

FE: What are some of the challenges you guys are seeing in the year ahead?

Werner: Qualified employees, finding qualified labor. Utah has and is seeing inflation at such a rapid pace.  The first piece of this challenge is finding qualified technicians, parts associates, drivers, and salespeople. Due to the number of jobs available, if you want to be seen you have to spend money on promoting your open position and hope the right people see it.  The second obstacle is in geography and where our dealerships are located. It is almost impossible to find affordable housing near our dealership locations and we have hired a couple people to work remotely because of this. One of the most unforgettable things I have ever seen (I sent the board a picture on a group text message) is when I was reviewing positions we are hiring for on a website, to see how they were faring.  The first thing that came up on my app was an ad to hire numerous dishwashers with the starting pay $15-$17 an hour. I’m just a farm kid from Hazelton, Idaho, grew up on 500 acres, and went to a small school. I worked extremely hard to get an Economics Degree & MBA; after seeing that and knowing what wages use to be it blew my mind. 

Qualified Employees, including those people that have the skills and knowledge to find or entice to come back to the work force; that’s our biggest challenge. It truly is a different time when an equipment dealership has always competed against it’s competition for employees, but now having to compete with fast food restaurants that are offering $20/hour to start; that is new. 

I truly am passionate about this industry, because I think it is a diamond in the rough. I know the average person probably doesn’t know or even think of the opportunities the equipment business offer, or without the production, sales, service, etc., how are country along with others would be affected without equipment dealerships . Anyone driven, willing to learn, adaptable, and engaged can do very well in this industry. One of the many things I learned after earning my MBA and working for Case IH was that what I had learned was not theory; this was “Corporate America” and the way it works.

Being able to take what I learned from ”Corporate America”, the good, and mesh it with small business, it definitely brings out an entrepreneurial spirit. Our goal and heavy emphasis for 2022 is to empower each of our locations. We desire and long for the attitudes of our employees, to take ownership and treat the store, department, colleagues, not as if this was their business, but it is their business; they are all entrepreneurs. They have people and customers that are managed, they have budgets, they have things that their accountable for, and to be fully accountable they have to be given authority; then this becomes their business.