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Billy Goat Industries Credits Innovation for its Success
Source: The Kansas City Star
LEE'S SUMMIT, Mo. — Billy Goat Industries is hoping to buck the recession while chewing into its competitors' market share.
The Lee's Summit manufacturer of commercial and "pro-sumer" lawn equipment is expanding by moving its office and shipping department into a 23,000-square-foot facility down the street from its 30-acre campus.
Although Billy Goat cut about a dozen employees at the end of last year, company president and part-owner Will Coates said his 80-person work force is matched to demand as it prepares for fall, the firm's most lucrative season.
The company, which brought in $22 million in revenue in 2008, has secured a contract that could boost production by up to 30 percent, beginning in 2010. In addition, about 50 new equipment rental stores have added Billy Goat products in the last 18 months.
Coates said the company's emphasis on product improvement is winning new customers. Innovations have included noise and weight reduction and self-propulsion.
"We have a highly engineered product with a lot of value added," he said.
To better market those products, Billy Goat recently introduced a vertical display that minimizes its retail floor footprint, helping to ensure room for its merchandise while drawing attention to it.
"We are putting the pieces of the puzzle in place now in a down economy to reap some serious rewards," Coates said. "We are planting seeds on many different fronts."
Originally, the company — which started as a subsidiary of Clipper Manufacturing of Grandview in 1967 — exclusively made lawn and litter vacuums. Today it offers an array of commercial-grade lawn equipment. The leading product is leaf blowers, followed by vacuums and brush cutters.
One product it does not make is lawnmowers.
"There are enough lawnmower manufacturers right now fighting over the limited market share," said Coates, who also noted that Billy Goat has chosen to compete in categories in which Asian competitors "don't find the volume interesting enough."
About three-quarters of Billy Goat's customers are businesses and institutions; homeowners make up the rest.
The company's name came from an offhand comment during a product photo shoot. While observing a vacuum in action, an ad agency staffer said, "That thing eats through everything like a billy goat." The name stuck.
Billy Goat earns 20% of its revenues from exports to western Europe, Australia, New Zealand and Canada.
The company is automating processes to save on labor costs. Automation hasn't sent workers packing, Coates said, but has kept the head count steady as revenues have more than tripled since 1992.
"We want to be prepared if there is competition coming from offshore," said Coates, who along with his brother Drew Coates took over the company when their father, Bill Coates, retired in June. Billy Goat's compact operation is also an advantage over competitors with far-flung international enterprises. Product designers only have to walk a block to observe their work in production on the manufacturing floor.
"We like our manufacturing base to be here," Will Coates said. "We can be a lot more nimble with our design changes. The further you are away from your supply base, the more vulnerable you are."
Domestically, Coates said, it competes chiefly against Schiller Grounds Care, Giant-Vac (a Briggs & Stratton product line) and BlueBird, a division of Husqvarna Turf Care Co.
Billy Goat merchandise moves through 14 independent distributors and ends up in about 2,000 retail outlets. That includes about 20 local dealers, including Smitty's Lawn & Garden Equipment in Olathe.
Smitty's owner David Wood said Billy Goat produces some of the best lawn equipment in the nation at affordable prices.
"For this (niche) market, they have a good offering for not only homeowners but commercial maintenance companies," he said.
A Billy Goat supplier credited the company's success to Coates' willingness to innovate.
"He is not afraid to take risks, and they have worked out for him," said Bob Krug, president of ICF Industries, a metal fabricator in Pleasant Hill. "I think he got bored and said, 'OK, let's go after a bigger market share and some new products, and they did it."
