Farm Equipment

March 2013 cover

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March 2013

Volume: 51
Edition: 3

Exclusive Dealership Minds Summit Coverage

PLUS: Profile of Plevna Implement, How to Sell: Hay Rakes, Efficiency in the Field and more.

  • Table of Contents

    Table of Contents

    History Made at 1st-Ever Dealer-Only Summit

    A total of 108 gathered in Kansas City for Farm Equipment's inaugural Dealership Minds Summit. On Jan. 30, 108 industry leaders gathered in a ballroom in the Kansas City Convention Center (where the Ag Connect show was being held) for a unique learning forum that lived up to its 'color-blind'? billing.
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    Adapting to a Changing Industry

    The farm equipment industry is changing rapidly on a number of levels. Recognizing the changes and being prepared to tackle them are paramount to succeeding as a farm equipment dealer. George Russell, an executive partner with Currie Management, presented the keynote speech 'The Changing Structure of the Farm Equipment Dealership' during the inaugural Dealership Minds Summit touching on how and why the industry is transforming the way it does business.
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    Family Affair: Passing it to the Next Generation

    Tim Young, General Manager, Young's Equipment
    The main objective of succession planning is to pass on control of an enterprise in a way that ensures effective business leadership and ongoing success. But when you bring the emotions of family held business into the equation, dealer-principals often find it difficult to remain objective.
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    Acquisition Growth Can be Done Without Seeking Additional Capital

    Mike Hedge, President/CEO, Birkey’s Farm Store
    There are innumerable ways to grow your dealership. And Mike Hedge's message that it can be done without resorting to outside influences or taking on extra debt was a welcome message. Seeking outside capital via a public offering or working with private equity groups are options, but they aren't for everyone says the Birkey's president and CEO.
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    Transitioning the Lead at a Multi-Owner Dealership

    Mark Foster, Regional Manager, Ag Division, Birkey’s Farm Stores
    Until January 2013, Birkey's Farm Stores has had only three president/CEOs in its near-60-year history. When Ron Birkey retired at the end of last year, the dealership's board of directors elected Mike Hedge (see article on p. 18) as just its fourth president/CEO.
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    Taking Your Dealership Public

    David Meyer, CEO & Chairman, Titan Machinery Co.
    Titan Machinery Co. isn't the first dealership group to become a publicly owned company. Other dealer groups in the farm and construction equipment and trucking markets include Cervus, Rocky Mountain Equipment, H&E, Toromont, Finning and Rush Enterprises. But when it comes to being aggressive in its expansion, few can compare with Titan Machinery. Today, the dealership group operates a network of 105 dealerships, including 2 outlet stores, as well as 13 European dealerships in Romania, Bulgaria and Serbia.
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    Home-Grown Grooming of Talent

    Keith Kreps, Executive Vice President, RDO Equipment Co.
    Keith Kreps, executive vice president, RDO Equipment Co. (2010 Dealership of the Year), Fargo, N.D., gave the most candid presentation of the day, detailing RDO's mistakes as it grew at an accelerated pace during its public years (1997-2003). Despite the pain and turmoil of that era (stemming from leaders ill-equipped on the industry and guided by stock pricing motives), those times taught a valuable lesson that the firm can R-O-I today. That is, manageable growth could only come through an internal employee development program that ensured people were prepared for the 'RDO way.'?
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    Employee Ownership (ESOPs)

    Clint Schnoor, Chief Operating Officer and Director, Agri-Service Inc.
    Agri-Service's Clint Schnoor walked attendees through the nuts-and-bolts of the Employee Stock Ownership Plan (ESOP) structure. Schnoor, who is president of an ESOP association, explained that ESOPs are qualified retirement plans designed to own the stock of the sponsoring company. Agri-Service, a 9-store AGCO group, was founded in 1990 and moved to an ESOP in 2010. In effect, all 170 employees are now "owners."?
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    It's All in the Execution

    While each of the speakers at the Dealership Minds Summit provided food-for-thought, Boyd Hofmann's presentation reinforced that the best ideas in the world won't work without the right processes and systems and follow-up mechanisms. Hofmann is vice president and general sales manager of JayDee Ag Tech, 9-store John Deere dealer group based in Saskatchewan that is focused on the large producer business. Its structure includes 3 regional sales managers and 21 ag territory managers, along with a support staff of 5 that is dedicated to settlements and sales assistance.
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    The Myth of Absorption Rate: Johnson Tractor's Not Buying It

    The priority placed on absorption rates originated as a defense against downturns, explains Eric Johnson, partner, Johnson Tractor, Janesville, Wis., but it has evolved since to be one of the primary metrics to measure the health of a dealership. He and his brother, Leo, say it's used unfairly to decide winners and losers. The Johnsons have a contrarian view on absorption's "holy grail"? and dismiss the argument that parts and service can support a business during a downturn.
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    Dealers Shed Light on Mystery of Marketing

    When the Farm Equipment staff spoke with dealers about topics they wanted for the first-ever Dealership Minds Summit, marketing topped nearly everyone's list. Because dealers know well that a better mousetrap and the world beating a path to your door is patently false. More important than ever, dealers must promote themselves with the same fervor that their OEM promotes its color, while employing new technology and customer intelligence tools.
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    Build Marketing Basics First

    Marketing may be the most misused word in business today. Tim Young, general manager of Regina, Sask.-based Young's Equipment, says it's critical to have a specific understanding of marketing when business authors keep rewriting definitions to sell textbooks. Young favors the following definition: "The process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational objectives."
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    Marketing's Role in Enterprise Culture

    Laird Munro brought an outsider's view to the meeting. The director of marketing communications for Calgary-based Rocky Mountain Equipment (RME) is a city boy who joined the dealership after 10 years working at Canada's WestJet airline. There, he witnessed first-hand the success that a culture-focus in a commodity-based industry no less could have on success.
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    'Really' Using Your Data Assets

    Discussing all the industry valuation tools and guides available, Rocky Mountain Equipment's Laird Munro shared an example of a dealer taking in combine on trade. "The guide says $270,000, so we value it at $270,000. This makes this magical assumption that there's an endless pool of customers who figured out the value. If we have 19 identical combines, the value of the 20th unit is not $270,000 unless we know how many customers are on the other end to buy it.
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    What Marketing Is ... And Isn't

    One of the clearest definitions of the difference between marketing and sales is from a lifelong marketing executive Jack Steele, who repeated "Marketing finds the henhouse; sales gathers the eggs." Laird Munro of Rocky Mountain Equipment puts it another way.
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    Kunau Implement
    Sponsored Content: Success in Shortline Machinery

    A Case for Shortline Equipment

    The major lines' push for brand-pure dealers has been grappled with for decades. For some, the debate comes down to a matter of loyalty, efficiency and economics. For others, having hands tied on being able to sell what the customer wants hinders both market penetration and encourages customers to shop elsewhere.
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    3 Slam-Dunk Action Items

    Campbell asked for dealers who could say every one of their employees knew what they'd be promoting the following month. Imagine the sound of crickets. "That's a struggle, to get everybody focused in the dealership on the target and what you're going to be promoting," says Campbell. He recalls the day at Birkey's when each store was doing its own thing, often with the parts department running a different promotion than the store, and service
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    How to Sell: Efficiency in the Field Fuels Quick ROI

    Installing drainage tile is proven to improve crop yields, and by doing it themselves farmers will see a convincing ROI.
    As land prices continue to rise, there's a growing need for producers to squeeze as much from their acreage as possible. Between growing commodity prices and land values, increasing yield is more important than ever. In order to improve yield without adding acreage, proper drainage is key. And more producers are starting to tackle the task of laying drainage tile themselves.
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    Winter Farm Shows Unveil Latest Technology

    The agriculture industry in North America is going strong, and equipment manufacturers responded with a number of new introductions at this year's winter farm shows. The new product launches centered around ways to help improve production and efficiency, with a heavy focus on precision farming advancements. New Tier 4i compliant engines were another big theme of the two shows, held in January and February.
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    Versatility of Hay Rakes Continues to Evolve

    "If money were no object, what I tell people who come into the dealership with questions about which rake is best for producing quality hay is they need about three different rakes to have the right one on any given day," says Ryan Parker of Parker & Sons Equipment in Claypool, Ind. In addition to operating a shortline equipment dealership, Parker says his family also produces a lot of hay. "I know there have been days when I've got a rake in the field and wish I had another one or different one."
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    Use 'Smart Software' in Your Marketing

    The focus of this month's column is on two different "Smart Software"? applications developed to help your dealership increase sales by improving the visibility of your product and services, and providing a quicker and lower cost of acquisition and capturing prospects' interests.
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    Business of Selling

    The Myth of Market Share

    Record farm income and never before seen low interest rates over the last several years have enabled many dealers to make more money than they have ever made. Barring unforeseen economic and/or political events, all indicators point to continued prosperity for those dealers committed to managing their business successfully.
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  • Featured Articles

    Featured Articles

    History Made at 1st-Ever Dealer-Only Summit

    A total of 108 gathered in Kansas City for Farm Equipment's inaugural Dealership Minds Summit. On Jan. 30, 108 industry leaders gathered in a ballroom in the Kansas City Convention Center (where the Ag Connect show was being held) for a unique learning forum that lived up to its 'color-blind'? billing.
    Read More

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