Jim Mayfield is president of Rainbow Ag, a California equipment dealership with three locations.
Jim Mayfield, president of Rainbow Ag, says he has been able to achieve three consecutive years of record sales and profitability for his California-based dealership by following a formula familiar to business owners:
1. Develop a strategic plan, with measurable goals
2. Track results throughout the year
3. Adjust strategies based on those results and market opportunities
However, Mayfield takes the formula step further: He regularly shares financial reports — real numbers — with his 50-member team. He says this practice helps him get the employee buy-in necessary to transform goals on paper to actions in the dealership.
“It is possible that the information could get in the hands of competitors, but so what?” says Mayfield. “If somebody is working for you 40 hours a week, they need to know the score.”
“We’re all engaged in sports. Why not have ‘game theory’ to know the score in business … to celebrate the wins and mourn the losses?”
Mayfield shares his tools for measuring and sharing results.
Defining the Dealership
For Mayfield, a critical first step is to define the identity of his dealership. Thirty years ago, he purchased Rainbow Irrigation, which was serving the agricultural community. Rainbow became a John Deere dealer the next year and had other acquisitions over the next several years.
“We really became a supplier to the ag producer and the rural homeowner of high-end, quality products, and the service expertise to back it up. We accomplished our five-year plan in two years and our 10-year plan in five years. The rural homeowner market has been a significant part of that success,” Mayfield says.
The dealership today carries John Deere, Stihl, Honda, Husqvarna and Kawasaki and has locations in Ukiah, Lakeport and Calistoga, Calif. It has the largest selection of parts and accessories in northern California and it also sells clothing, gifts, toys and animal feed.
Mayfield says he has written a strategic business plan for the last 25 years, based on this premise regarding market segments: “Grow it, milk it or get rid of it.”
For instance, Rainbow recently doubled the amount of retail space devoted to pet toys.
“We get a tremendous return on investment with pet toys,” Mayfield says. “We don’t have a Petco or PetSmart in the area. It’s interesting that we’ve become a pet superstore. That would change if a Petco moves in.”
“It’s a moving point. We don’t see ourselves only as a John Deere tractor dealer. We are market driven and are always searching for better ways to serve rural homeowners and agricultural producers. What do they need? It may be John Deere tractors and we have grown that business. But we’re not selling tractors because my grandfather was selling tractors,” he says.
Assembling a Board of Directors
Mayfield describes himself as a “numbers guy,” so is comfortable developing the financial metrics necessary for his dealership’s evolving strategy. But, numbers aren’t enough. That’s why Mayfield has assembled a core group of employees to consult with when developing his strategic plan. The group includes his three store managers, controller and several other key people.
“Small businesses don’t have boards of directors. They are, to some extent, my board. I can ask them, ‘Are you seeing this the same way I am?’ Sharing the burden is easier on the owner’s psyche,” Mayfield says. “The average tenure of my management team is 15 years. This is a group of trusted folks. When tough times hit, I have their support and they are the eyes and ears of what’s happening.”
Measuring, Sharing Financial Performance
It was one of those tough times that prompted Mayfield to begin sharing financial information with his entire staff.
“When the recession hit, we had to lay off people and cut salaries. We wanted to make sure everyone knew what was going on. It was the key component to getting their buy-in. We just kept doing it after things turned around,” Mayfield says.
He packages the information, so it is both easy and quick to read. He pulls numbers from his business management system, SXenterprise software, and enters them into an Excel spreadsheet. From there, he develops graph and charts to show measurements like sales, gross margins, customer counts per day and service billing efficiencies. Mayfield sends out much of this information in a weekly email, along with a brief explanation. Sometimes, that explanation is just a sentence or two.
“I give an overview from the president’s level, like explaining that customer counts were up X percent or letting them know about our promotions and advertising for the holiday season,” he says. He suggests follow-on actions, such as making sure cashiers and salespeople point out stocking stuffers.
“The email focuses on the data, but also ties into what each individual can do,” he says.
“If somebody is working for you 40 hours a week, they need to know the score …”
The reports have led to a friendly competition among stores. Mayfield says employees ask him how each store did on Black Friday and Small Business Saturday. (Mayfield uses materials from Independent We Stand to promote his dealership on Small Business Saturday and throughout the year. Stihl sponsors Independent We Stand, which is a program for locally-owned businesses to encourage shoppers to buy local.)
Mayfield goes beyond numbers with his staff and shares key parts of his strategic plan, too.
“The staff needs to know our plans because they are the ones that have to answer questions from customers about why we’ve doubled our clothing space or why all the small animal supplies are crammed into a corner. It’s important that everyone understands what we are doing,” he says.
Mayfield shares some of this information by email or in meetings. He also relies on his core team to meet and answer questions at each store.
“When your team understands your mission and strategic direction, they’re all engaged in the game and will bring you ideas. It’s back to the game, having a strategy and the immediate gratification of knowing the score.”