Have you considered buying a business?
In some situations, it may be an excellent opportunity that becomes available or even a new career objective. Of course, taking the leap from employee to owner, comes with a certain level of risk and increased responsibility. And, there’s a lot to take into consideration. Mike Kadinger, owner of Sioux Falls Outdoor Equipment, was presented with an opportunity to buy the company he had worked with.
Sioux Falls Outdoor Equipment is a successful locally-owned and operated business selling new outdoor power equipment for lawn care and landscape maintenance. Committed to service excellence, they’ve grown to become one of the largest dealers in the Sioux Falls area.
Mike, a first-time business owner, purchased his company 1-1/2 years ago when the owner was ready to move on after 25 years. Encouraging others who may have an opportunity to buy their own business, here are a few of Mike’s tips and lessons that he’s learned in the last couple of years as a new owner.
Navigating increased risks as a business owner
Taking a ‘promotion’ from employee to owner doesn’t just only add to your list of responsibilities, it also greatly increases your risk. First, you’re leaving behind a stable paycheck and a 40-hour work week. Second, you have a business to figure out and now people depend on you for their livelihood. Perhaps only those who’ve made the leap themselves can truly understand what it takes. But for those who haven’t, it doesn’t take long to understand that a Business Owner wears many hats including responsibilities for: finance, marketing, technology, staffing, etc. The success or failure will rest on the decisions you make as owner – it’s a lot of pressure and should be a factor in your decision.
In addition to the obvious financial risk an owner takes, there are also relationship risks. “I’d been in this industry for a few years and worked at a company that did business with the company I eventually bought,” Mike said. “It was a little nerve wracking at first, but I spoke about the idea with friends and family, and they provided a lot of support that led me to the decision. The owner of the business I was working at also helped mentor and encourage me through the process.” Communication and trust play an important role in navigating the success of the purchase transaction and successfully running your business in the future.
Build on your company’s strengths
Sioux Falls Outdoor Equipment specializes in the sale of high-end outdoor and landscaping equipment from companies like Exmark and ECHO. “About 75% of business comes from commercial customers while the remaining 25% is residential,” Mike said. “From a sales perspective, we’re very niche focused. This isn’t huge market, but it is highly specialized.”
Sioux Falls Outdoor Equipment is known for their outstanding service quality which helped them grow to be among the top dealers in the area. To provide that level of service requires product knowledge – time and certification from companies including Exmark, ECHO, Kohler, Kawasaki, Honda, and Briggs, to name a few. “Commitment to quality is our top priority,” Mike stated.
In addition to the quality of service is timeliness. “I think a lot about the servicing work that still needs to be done. I just hired a mechanic, so that that helps a lot. I’d also like to add one more employee, but then plan to keep the business small to ensure we continue to offer top notch service.”
Be aware of what you can and cannot control
Develop good relationships with suppliers.
For any business, suppliers often provide the essentials needed to keep it running. Businesses selling physical goods know that balancing the volume of growth with available supply can be tricky.
“The biggest challenge out of my control was having enough inventory on hand to handle volume. The recent supply chain issues impacted our ability to get product to our customers,” Mike said.
While recent Covid-related inventory issues continue to improve, it only makes sense to develop strong relationships with your suppliers so they’ll go the extra mile for you if you ever need it.
Manage your time wisely.
Successful people have learned to “work smarter, not harder.” As the leader of a business, being able to manage your time (and possibly your team members’ time) will help you run your business better and help reduce burn-out. “A lot of business owners I’ve met have talked about their challenges with not having enough time, but time management and organization have been key for me.”
Time management activities like planning ahead to prioritize tasks by importance, designating time on your calendar to complete them or building daily routines to provide structured productivity can help.
Everyone’s system is unique and it may take several attempts to find the right system that works for you. your business. The bottom line: time is money. It’s worth figuring out how to manage it.
Make time for professional development
While Mike had experience in the industry before buying his business, the need to learn different aspects of his business became apparent. If the business is just starting up, you either hire consultants, employees with these skills or learn them yourself which is where Mike started.
- Technology: From a technical perspective, he researched and installed dealer management software that will keep track of dealers and service work.
- Finances: As the owner and responsible party for finances, he looked for accounting software options and selected QuickBooks. Mike learned how to use it and now manages the financial aspects of the company.
- Marketing: In order to find new customers and grow the business, he put on his marketing hat to design the company logo, business cards, and arranges most aspects of advertising.
The key to growing your business safely is understanding there’s a limit to what you can learn yourself and when you should hire an expert.
Should I buy a business?
When asked what advice he had for others thinking about buying a business, Mike was quick to respond. “Do it. Try it, especially if you’re young,” Mike said. “If things don’t work out, there’s always time to recover. Owning a business has had a positive financial impact for my family and me.”
We asked Mike what Bank Midwest could do to deliver better service to Sioux Falls Outdoor Equipment. “I wouldn’t change a thing, “Mike said. “Bank Midwest meets our needs well.”
Reach out to Sioux Falls Outdoor Equipment for your lawn care or landscape maintenance equipment needs. You can visit them at www.sfoutdoorequipment.com.
Whether you’re just starting out as an entrepreneur, or have been around for a while, please visit check out the Bank Midwest locations near you to find a business banker who can help you grow your business.