A small player in Rangiora’s equipment hire market, Southbrook caters to home handyman and contractors with its fleet of trailers and earthmoving, engineering, workshop and access equipment.
Although the books were in good shape last year, owner Damian Wyatt hadn’t appreciated some of its operating costs were high by industry standards.
Wyatt credits the benchmark report from Kiwi-designed software Ranqx for the changes now bolstering the bottom line.
One of the main things the report impressed on Wyatt was the need to seek out new revenue streams to bring turnover more in line with salary overheads, and the first place he started was with the humble LPG bottle.
Despite being Rangiora’s only LPG refilling station, Southbrook was not known for gas bottle refills.
“Everyone has a gas bottle, so we realised if we could get people coming to our store for their gas, they would realise we also hire out large range of equipment and machinery for their home and garden projects,” Wyatt said.
Southbrook launched a marketing campaign to encourage people to save money by bringing in their LPG bottles for a refill, rather than swapping the bottle elsewhere.
A year later, daily bottle refills have more than doubled in number and keep growing, requiring Southbrook to increase its bulk gas holding.
Wyatt said the business runs gas refills like a loss-leader service for Southbrook, which is now selling large-sized LPG bottles and fittings for bottles that it was not selling previously, and it has done its research to make sure it beats its large hardware chain store rivals on price and service.
Thanks to new revenue streams and marketing, Southbrook has lifted its forecasted turnover by $40,000 annually.
“It may not sound like a lot, but to a small business, that’s big money,” Wyatt said.
“We wouldn’t have achieved that unless I had seen I needed to increase turnover so overheads matched the industry averages revealed by Ranqx.”
The analysis of expenses that followed the Ranqx benchmarking report also prompted Wyatt to shop around for a cheaper fuel supplier, leading to fuel cost savings of $5,000 a year.
And on the up-side, Wyatt was encouraged that Southbrook’s in-house repair work was paying off, with maintenance costs much lower than some rivals who outsourced their repairs.
A former supply chain manager for Arrow International, Wyatt had never carried out a benchmarking exercise before.
“I was always doing some sort of market research on competitors, but no tool maps out the competitor landscape as well as Ranqx,” Wyatt said.
The encouragement to use Ranqx came from Wyatt’s ASB business bank manager, and although he was nervous of what he might find, he was pleasantly surprised.
“If we were to sit on our own, we would have thought: fantastic, we are doing everything right. But seeing how you stack up against others in the industry gives you targets to work on, and peace of mind on the things you are doing right.”
Rather than put the report in the bottom drawer, Wyatt refers to it regularly. “I now spend an awful lot of time benchmarking and comparing what we are doing, even down to a day-to-day level.”