As many dealers can attest, good business partners can make all the difference between success and failure, profits and losses and expanding or standing still. Josh Provost heartily concurs.
Prior to becoming partners with Brian and Russ Carpenter and Jason Bessette in the CVE group of farm equipment dealerships, he learned all about the frustration partnerships can create. Since merging with the group in 2008, he’s come to know what it means to have partners who are pointing in the same direction he wants to go. It also allowed him to do what he does best, and the other partners do what they do best.
While Provost has demonstrated a talent for sales, (he was his dealership’s top salesman at the time he merged with CVE) he describes himself as a “detail guy, a numbers guy.” He says he can still sell and does when he’s needed, but as a partner and general manager of the Derby location, he has had to step away from many of his former sales duties. “I don’t have the time or the product knowledge any more to really be good at sales these days,” he says. “I enjoy the business side of it better than I do the sales part of it, so that’s what I’ve primarily been doing.”
Partner & General Manager, Derby Store
Years with Organization: 23 — in the farm equipment retail business. Joined CVE as a partner in 2008 when his dealership was acquired.
Role: Partner and general manager of CVE’s Derby, Vt., store. In addition to his store manager responsibilities, he’s the unofficial financial “watchdog” for the company. “I consider monitoring the financials, keeping an eye on each of the stores as being my job, as well as keeping Brian [Carpenter] apprised of things that need to be addressed. I report on the little things that he doesn’t necessarily have the time to check into and he follows up with the store managers.”
It’s the “numbers” that really get his motor running.
“If you give me an accounting issue or a set of books to figure out or clean up, I’ll thrive on that,” he says. ‘That’s what I do well. I’ll create different spreadsheets for the guys costing their equipment and for trade-in appraisals, or for sales commissions. I’ll create a pricing matrix for different products to make it simpler for the sales guys. That’s what I enjoy doing. I like getting these types of tasks and getting after them.”
Developing the Partnership
Over 23 years, Provost has worked in various capacities at the dealership — from mowing the lawn through each of the departments, since the age of 16 when he began working at his father’s dealership in Derby. After stints as one of Vermont’s largest dairy operators, which came to a screeching halt in the mid-80s along with many of the state’s dairies, his father began distributing farm implements. He, along with three partners (who were brothers), started a dealership after the local New Holland dealership closed its doors in 1990.
The relationship lasted about a decade and after a falling out among the partners, Provost bought his father’s share of the business. With his background in accounting and business management, he oversaw the entire operation except for sales, which was handled by a partner. “We had trouble hanging on to salespeople, who would typically hang around for only 12 or 18 months, which was frustrating,” says Provost.
When the opportunity presented itself to hire Dave Merrill, a local dairy farmer and customer who was looking for a new career, Provost took the chance. It proved to be the move he needed to become his number two man at the dealership. The hire prompted Provost to dissolve his partnership and approach Brian Carpenter about becoming partners in CVE.
Expansion & Ongoing Change
Since becoming part of the CVE, Provost has played an integral role in its growth that included two acquisitions, both in 2012. CVE acquired a store in Berlin, Vt., and another in Orleans, Vt. The Berlin location is up and running, but the other store, which was about 12 miles from the Derby location, was closed down and the equipment and parts inventory moved to Provost’s Derby store.
This dealership sold primarily Kubota, but also handled Massey Ferguson equipment, as well as Polaris and Arctic Cat snowmobiles. According to Provost, Kubota represented the biggest share of the business and that’s what CVE wanted to complement its New Holland line. They passed on the Massey Ferguson contract.
The Derby store’s customer base is nearly all dairy operators, ranging from smaller 50 cow organic farmers to conventional dairies with 2,000-3,000 cows. Little or no cash crop production can be found in the area.
In addition, there’s a growing base of hobby farmers, horse people and maple sugar producers. Provost also points out that the state of Vermont helped create the compact tractor market for CVE and underlines why this acquisition was so significant for the dealership.
“The subdivision laws were pretty strict in the ‘80s, so the lots in any new subdivision had to be a minimum of 10 acres and the owners needed compact tractors and ATVs. This helped us create that demand. Our consumer tractor business is pretty big and we sell about 70-80 compacts a year and probably the same number of ATVs and UTVs.”
He says the dealership used to have a large snowmobile business and in the late 1990s they sold 100 units or more a year. That business has dried up in recent years and he estimates they sold only a dozen snowmobiles in 2012. Today, they’re out of that business.
That loss has been countered somewhat with CVE’s growing business with landscapers and their equipment needs, which include snowplows. “Snow removal is a pretty good business for us. We’ll sell 70-80 snowplows a year, which helped replace some of our snowmobile business. We took that on in ’07 when we saw our sled business declining and we started out selling 20 plows that first year,” says Provost.
When it comes to acquisitions, Provost and Carpenter work in tandem to get the deals done. “Brian and I do most of the legwork. He typically starts the conversation and gets the basic information. Both of us work through the numbers separately to determine what we think will work. Then we sit down and compare notes. It’s been remarkable how close our numbers have been to each other,” says Provost.
Scrubbing the Numbers
With his background as a store owner, Provost understands the necessity of paperwork and getting it right the first time. As a result, he scours the numbers on all wholegood deals before they’re sent on to the Middlebury store where most of the accounting and bookkeeping takes place.
“I go through all of the wholegoods deals that the salesmen bring in to make sure all the information is there, the contracts are correct and check all the paperwork. I used to do all the settlements when I had my own store, so I know what they need in Middlebury. I scrub that stuff pretty well so when it gets down there issues are kept to a minimum. That’s one of the main things I clean up every day.”
In addition, as the unofficial “watchdog” for the company, Provost runs the financials every morning for all the stores, including balance sheets and income statements. “I’m looking for red flags we need to be aware of or if we’re behind where we should be for the month. I don’t necessarily compare it to the budget, but I try to gauge store activity and the aging of certain things. I don’t watch units. I watch dollars,” he says.
Provost also visits each of the stores regularly looking for things that need improvement. If anything gets his attention he “bumps” Carpenter on it.
“I consider monitoring the financials as well as keeping an eye on each of the stores as being my job, as well as keeping Brian apprised of things that need to be addressed.
“I report on the little things that Brian doesn’t necessarily have the time to check up on and he follows up with the store managers,” says Provost.
“I’m not the PR guy that Brian is. He’s really good with people. I’ll give him a list of things that I noticed during my visits and my regular financial checks and he takes it from there. Everyone’s receptive to him and most of the time they already know there are issues, but they need to be prodded to get after them.”
Despite his focus on numbers, there is one other responsibility that Provost has taken on that he says allows him to use his imagination, but, of course, it also serves a quantitative purpose. “I think I’m fairly creative and one my favorite jobs is to arrange the wholegoods displays outside of the dealership. Besides keeping things neat and displayed to get attention, it also allows me to touch, feel and drive everything in the yard.
“If it’s a new assembly and everything is not right with it or if it’s a used piece that doesn’t seem quite right, I keep a list and pass it on to the guys in service to check it out before we sell it,” he says.
In addition to his everyday duties at the Derby store, which include three scheduled meetings a week with his service and parts managers, Provost says he often serves as the “answer guy” when it comes to financial questions.
And while it isn’t written down anywhere, he says everyone at CVE accepts that Brian Carpenter “sits at the big desk.” Provost says he can always tell when Carpenter isn’t available because things start falling into his lap. “When he’s away, my phone calls and emails escalate. Typically, they come more from the sales staff. The same thing happens when Jason is away from the St. Albans store. His sales staff will call me.”
At the same time, there’s little or no emphasis on the hierarchy of the dealership. Provost is a big believer in delegating responsibility and letting his managers handle most issues that arise on daily basis. “They might come to me for a resolution of a problem or an approval for something, but we have good managers and they make good decisions. They know their boundaries and we like them to use their best judgment. As far as complaints, we don’t get a lot.”
Carpenter visits the Derby store about every 5 or 6 weeks and, according to Provost, it’s usually more of a social call. “He likes to see everybody and if we have a complaint that somehow escalates, he’ll go see the customer because they want to deal with someone from the head office. They like that feeling and he likes doing it. He enjoys going out and working through these things.”
He adds that if there’s one thing he and Carpenter do well, it’s hiring good managers. “We provide them with the training they need, set the boundaries and walk away. Otherwise, we could never grow and get our jobs done,” says Provost. “They have an open book if they have any issue. We’re always there for support and direction.”
Each department within CVE sets its own budget that’s approved by Carpenter, according to Provost. “All the department heads know what the expectations are on a monthly basis. The parts inventory people know what their turn goal and inventory levels are. The service managers know what their sales and margin goals are. Wholegoods is a work in progress. The salesman want everything sitting in the yard, and that’s been a struggle to keep that in check.”
Challenges of Change
While there’s nothing definite on the docket in terms of acquisitions in the near term, Provost says its understood CVE intends to continue expanding. “We really like the challenge. Most of the dealerships we acquired were doing OK, they’re paying the bills and the guys are making a living, but they weren’t necessarily progressive dealerships.
“We like the challenge of bringing them up to our level. It’s not what the dealership can make on its own, but what we can bring to the table as an organization to make it work better. The most rewarding part for me is seeing them progress. I’m just a numbers guy. I like goals. That’s what works for me.”
But expansion brings other sorts of challenges that a one or two store dealership working with a similar customer base doesn’t confront. “We’ve struggled with marketing to the different customer bases we’re now working with,” Provost says. “We’re starting to work more to improve our customer database for mailings and things, but it’s a struggle. And it’s expensive to advertise in a rural area. You’re not hitting a lot of people that you need to either. But with the growth we’ve had in the past 3 years, we haven’t had to really focus a lot on this area. It’s something we need to pay attention to.”
If there’s one area of CVE’s operation that Provost is keen to improve, especially as the dealership has grown, it would center on employee training. He says the company spends a lot of money on training for the techs, but he’s more concerned with CVE employees understanding why they do things the way they do them.
“Lots of times we train them in the processes we utilize but seldom get around to telling them why we do them and show them what’s behind it,” he says.Provost says he knows as CVE grows, attention to this type of detail will become even more critical.