Cost of Doing Business Study Shows Some Improvement in 2015

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Equipment Dealer Consulting, P.C., the certified public accounting firm affiliated with Western Equipment Dealers Association (WEDA), has released the results of this year’s Cost of Doing Business study.

According to Curt Kleoppel, President of Equipment Dealer Consulting, for North American dealers, total equity percentage increased almost 1.75 percent from a year ago and gross profit margin percentage increased last year. The overall net Income before tax decreased 1 percent, which was one of the negatives indicated by the study. Dealers are still managing inventory, debt and used equipment values.

WEDA works in cooperation with other state and regional equipment dealer associations to gain the involvement of association members throughout North America. To get the complete report, dealers must contact their state or regional equipment dealer association. The 2016 report has been sent free of charge to equipment dealers that provided their financial reports for compilation. Non-participating dealers can purchase the results for $200 if they are association members; the report is $450 for nonmembers.

The Cost of Doing Business Survey was established in the 1980s by the North American Equipment Dealers Association to analyze the financial picture of equipment dealerships in the U.S. and Canada. The survey compiles data from independent dealers who provide detailed financial and operational information for their individual businesses, which is compiled in a template that creates average income statements and balance sheets, in addition to key financial performance indicators. The survey can be used by dealers to compare financial performance against other dealers in their region, or at comparable volume levels throughout North America, and to identify areas of needed improvement. Of equal importance, especially if a dealer principal is nearing an exit from the operation, it can also be used to value a business for estate planning or ownership changes.

Today, the Western Equipment Dealers Association (WEDA), in cooperation with other participating dealer associations and their members, compiles the survey. According to WEDA Chief Financial Officer Curt Kleoppel, who leads the project, “The report compiles information from 230 dealers representing approximately 609 locations. Five years ago, there were 500 dealers participating, representing about the same number of locations. Consolidation has reduced the number of owners.”

Call Lonnie Finch, CPA, at 800-762-5616 with questions or to learn more about how to access the survey results.

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