Brian Carpenter, General Manager Champlain Valley Equipment
2006 Dealership of the Year Winner
We follow three base principles in our operation:
1. Surround Yourself with Good People and Treat them Fairly. It’s still a people business and I don’t see it ever going a way from that. People skills play a big part in the business. You’ve always need to treat people fairly — your employees, customer base and manufacturers. This develops a rapport and respect and an expectation that helps you have good people on your team. We all want to have the best people working for us, but if you don’t treat them right, you won’t keep them. It’s the same thing for customers, treat them well or they won’t be loyal to you.
2. Manage the Balance Sheet. Our 20 group facilitator, Dr. Jim Weber, hit us over the head for years. We were doing it but not with a scientific approach. Now, our procedure manual has the whole team focused on it. You’ve got to manage the balance sheet and not run out of cash and need to learn to make decisions that are not just gut-based but also make good fiscal sense. Balance-sheet management has become more important in this business as we’re all handling bigger numbers. Keeping cash in the business — impact by buying.
3. Involve Yourself in Buying Decisions. A third principle we live with is that you make money when you’re buying. Pay close attention to when you’re buying — your trades, looking at the new terms and maximizing those discounts. Some manufacturers have tremendous cash discounts, especially some of the shortlines. If you lose those, you lose a huge opportunity for added profit.
You have to do number 2 in order to succeed at number 3. How you use that cash is critical. We found we can make a lot of money off of shortlines if we buy them correctly. On a percentage basis, they produce our highest profit. Attachments have the best profit margin and some have up to 20% cash discount. But it depends on what volume bracket you’re buying at. You’ve got to look at the terms. Sometimes you need to rationalize brands and go with one company to get those terms.
Read the "The Dealer's 16 Commandments," a summary article of all "Dealers of the Year" and their views on the cornerstones of running a farm equipment business.