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Building a Business in the Construction World

Building a Business in the Construction World

14 May 2018 Read time: 6 min
RDO Equipment Co. is often thought of as an agriculture equipment dealer. Perhaps that’s because the company has deep roots in agriculture, from Ron Offutt’s days as a farmer to the very first RDO Equipment Co. store’s focus on selling and renting green iron.  

Today, the company has grown outside the rows of corn, onions, and strawberries, and built a foundation in the dirt, mines, and roads of the construction industry. 37 RDO Equipment Co. stores sell construction equipment and, according to 2017 financials, construction equipment makes up 46% of the company’s business. 

Based on those numbers alone, it would be easy to say Ron’s decision to expand RDO Equipment Co. beyond agriculture equipment was a smart one and leave it at that. But the road to success in the construction industry was a bit longer and certainly included a few bumps along the way.

Early Starts 
After the early success RDO Equipment Co. had growing its agricultural presence in the Midwest, John Deere began to put on the brakes, preventing Ron from continuing to expand and add more stores. Combined with basic economic ups-and-downs of the ag industry, Ron began exploring other options to grow the business, this time also looking to diversify.

Lon Kindseth, Director of CE Inventory, has worked for RDO Equipment Co. since the company entered the construction industry. In fact, Lon’s father owned the business that Ron purchased in 1989 that became the very first RDO Equipment Co. construction stores: Bismarck, Fargo, Grand Forks, and Minot, ND.

“I believe they saw both the construction industry and my family’s stores as a good investment,” Lon recalls of Ron and RDO Equipment Co.’s decision to enter this new side of the equipment business. “With the stores being in North Dakota and the company based in Fargo, I think that further encouraged Leadership to make the move.”

Lon likely would have been the first to recognize the construction industry as a great place to be. Growing up with his father working in the industry, Lon has been around construction equipment as long as he can remember. And, like Ron’s earliest memory of farming, Lon’s first recollection of being around yellow iron came at the tender age of five.

“My dad would take me to work on Saturdays,” he remembers. “I’d get to look at all the equipment and, once in awhile, he’d move things around the yard and I’d get to ride with him.”

Lon’s early interest in machines stuck and he began working at his father’s dealership in Bismarck when he was 14, doing everything from washing and delivering equipment to working in the service department and stocking parts. He worked throughout high school and college, then chose to continue his career with the family’s dealership after graduation. When the business was sold to RDO Equipment Co. in 1989, Lon remained on the team as the Bismarck and Minot Store Manager, and has stayed with the company his entire career.

Throughout the years, he not only had the opportunity to continue growing within the company, he saw firsthand how the company continued to grow in the industry he has always known and loved. 

Going Cross-Country
RDO Equipment Co.’s first expansion outside of North Dakota was in November 1990, with stores in Burnsville, Rochester, and Sauk Rapids, MN. The company’s Midwest expansion was closely followed in June of 1992, with the store in Sioux Falls, SD.

Also in 1992, RDO Equipment Co. Leadership looked to push construction growth further and acquired three stores in Arizona: Flagstaff, Phoenix, and Tucson. Since then, the company has added construction stores in California, Montana, and Texas. 

Beyond the early expansions, RDO Equipment Co. has continued to invest in its construction equipment business, especially in recent years. In 2015, a new facility was built in McKinney, TX, and became the company’s first to achieve LEED certification. To better serve the growing Phoenix metro area, a new location was built in Chandler, AZ in 2016. And just last year, a new store in Riverside, CA was built, more than doubling the space of the original facility.

Grading the Bumps
Though it may seem like RDO Equipment Co. entered the construction industry and it was nothing but smooth roads along the way, the journey didn’t come without bumps. In fact, one of the earliest challenges in the construction industry was also a result of RDO Equipment Co.’s biggest success – its reputation as an agriculture equipment dealer.

“We did get pushback from customers who assumed we were only an ag dealer and only knew that industry,” he said. “It was up to us to prove and continually show them that we were just as focused on construction and would be the best partner for their business.” 

While nothing happens overnight, Lon credits the hard work of team members and RDO Equipment Co.’s focus on continuous improvement with building up the company to that level that it became known, respected, and trusted as a construction equipment partner.

Another obstacle RDO Equipment Co. has been able to overcome is one that many specialized companies have likely had to deal with at one time or another. When RDO Equipment Co. entered the construction industry, Ron put his business in a good position to weather the storms of volatile ag markets. However, construction wasn’t immune to its tough years as well. The Great Recession, for example, hit the construction industry hard in 2008 and the long-term effects lasted long after things began to rebound in 2010. Well-rounded and diversified, RDO Equipment Co. has relied on balance from all its industries during ups-and-downs and continued to be a strong company.

What’s to Come in Construction 
While Lon has seen tremendous change, growth, and innovation throughout his years with RDO Equipment Co. and in the construction industry, he knows there’s still more to come. He sees shortage of qualified workers as an issue but believes technology will provide solutions.

“It’s going to be harder for our customers to hire operators and technicians, so machines and technology are going to have to do more,” he said. Lon feels RDO Equipment Co. is poised to lead customers on this path, again citing the company’s continuous improvement philosophy, and highlighting the decision to enter into the Integrated Controls side of the business nearly a decade ago. 

“I remember when we were first looking at expanding to add RDO Integrated Controls,” he said. “The overall feeling from Leadership was we had to do it; it was the future.”

While the problem of finding qualified workers is one he recognizes, it’s also one that puzzles him a bit. “The construction industry is such a rewarding industry,” he explained. “Take an individual who wants to be creative and aggressive, and this is the place.” 

Perhaps Lon’s words will inspire the next Access Your Future service technician intern, the next RDO Equipment Co. parts specialist, or the next generation of construction equipment enthusiasts – the ones who started out in a similar way he did, looking forward to every opportunity to catch a glimpse, take a ride in, or hear the roar of heavy machinery. 

The above photo is of our North Mankato location. 

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