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Midyear Business Report ("CED 2013 Midyear Business Report: Dealers Watch for Second-Half Pop" continued from page 27) that is less expensive. Similar to last year, most dealers maintain that Tier-4 interim is not significantly affecting customers' buying decisions one way or another. More than a third of firms surveyed said customers that would normally buy new are following through and aren't influenced by Tier-4. One of the uncontrollable factors for a dealership is not knowing when a manufacturer "flex" supply of T-3 engines will run out, which could leave the dealer at a competitive disadvantage. "That's one of those blind spots you have to look out for," said Bridwell. "It can affect the dealer's ability to get product, and then miss sales." The adding and dropping of lines appears to have stabilized in 2013. Last year, 56.7 percent of dealers planned to add a product line, and this year that percentage dropped to 34.5. Hiring Technicians an Ongoing Challenge Dealers have continued to add staff as needed to support growth. More than 60 percent of respondents reported adding staff since January 2013. No layoffs were reported. "Equipment dealerships struggle to go up and down with employees and staff, because the experience and knowledge they bring to the interface between the About the Dealers Who Completed the Survey CED received a 19 percent response from the AED dealer membership to its June midyear business survey. Here's a snapshot about these companies. Annual Revenues Under $5 million $5 to <$10 million $10 to <25 million $25 to <50 million $50 to <$100 million $100 to <$300 million Above $300 million 2.4% 9.5% 32.1% 22.6% 15.5% 14.3% 3.6% Headquarters Location West 9.5% Upper Midwest 26.2% Northeast 20.2% Rocky Mountain 7.1% South Central 15.5% Southeast 16.7% Canada 4.8% customer and the dealership is crucial," said Bridwell. At Ditch Witch of Oklahoma Bridwell focuses a lot of time on hiring the best people and retaining them. For many dealers, a lack of quality service technicians keeps service revenues from reaching their full potential. More than nine of 10 dealers surveyed cited the Service department as the area in greatest need of added people. Growing rental fleets have put an added strain on the dealership service personnel. "It's a bit of a problem," said Berry. "We do our customers' work first." "The availability of service technicians keeps that side of our business in growth check," added Logan. "We cannot over fleet in the rental fleet beyond our service means." Oregon Tractor has found success recruiting from rural areas for its tech positions. Others, including Pete Baschmann, try to develop their own talent, working with local technical schools to identify candidates while still in school. "I try and find the good ones before someone else does," he said. "A strong parts and service organization is carrying the day for us right now," he added. Dealers Stay the Course Dealers have done a good job of reading their markets and staying on course. Nearly seven of 10 dealers reported that their midyear results were on target with projections last fall. Several dealers wrote in that they had exceeded their expectations. Uncertainty continues to make business planning a challenge. "I'm worried about the federal deficit, I worry about inflation – that rates are going to go up quickly," said Berry. "I wish government would get out of the way of small business," said Simonson, whose company recently selected a high deductible health plan and covered half the employee deductible to save on health care. Rising health care costs and the uncertainty of Obamacare are concerns for many dealers. "You take Tier-4, Obamacare, the XL Pipeline – all these external things are items you have no control over," said Bridwell. "Yet you have to go through this gauntlet to steer your dealership in a professional, profitable manner." Through tough years, AED dealers have become very good at controlling what they can: inventory, receivables, marketing, customer service and staffing. And while signs of market optimism are welcome, you can bet that one eye will be kept on those external factors that could quickly send business in an unwelcome direction. n Joanne Costin is a freelance writer and marketing consultant focusing on the construction industry. She can be reached at (847) 358-1413 or jcostin@costincustom.com. 30 | www.cedmag.com | Construction Equipment Distribution | August 2013 26_Midyear_Feature_KP.indd 30 7/25/13 12:36 PM