How do I check a farm equipment dealer’s parts counter and service department?
Look at the parts counter and the service shop as separate businesses that feed each other. Ask for sales and margins by department, how often a part is on the shelf when a customer asks, how full the technicians’ schedule is, and how much of the work comes from repeat customers.
At the parts counter, ask how stock levels are set and who decides what to carry. Obsolete parts can sit on the books long after they stop moving, so ask for an aging report and see how the dealer treats slow items. Ask how often a customer leaves without the part they came for, and what the dealer does about emergency orders in the middle of a busy season.
In the service department, count the technicians and ask how long each has been there. A shop that depends on one senior person is fragile. Ask about training, tooling, and whether the dealer sends work out when it is short-staffed. Look at how jobs are scheduled and billed: warranty work, customer work and internal reconditioning each pay differently.
Spend time in both areas at a busy hour. Watch how customers are served and how staff talk about the owner. Ask whether the department relies on a supplier agreement that may change with ownership, and ask your accountant to review margins separately from machine sales. Ask how warranty claims are paid and how long the dealer waits for that money, since slow repayment can strain cash during the busy months.
Key takeaways
- Review parts and service results separately from machine sales.
- Ask for an aging report on parts and a clear picture of technician tenure.
- Visit at a busy time and watch the customers, not just the shelves.
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Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 02Business Development Bank of CanadaGovernmentWhat is inventory
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