Template for success

Local businesses seem to have a few answers for longevity

By Joel Myhre (Contact) | The Daily Journal

Published Monday, February 26, 2007

They do everything from selling retail crafts to manufacturing aluminum parts to providing at home health care.

But for the Fergus Falls residents who decided to start their own business, they all share many similar experiences unique to only those who make the venture.

“Nobody can describe what it's like to be on this side of the desk until you do it,” Don Westra, owner of West Tool and Design in Fergus Falls, said.

Though the types of businesses vary greatly, local business owners who have been successful at it all seemed to follow a template for success.

• Know the business

Though each of the small business owners came by it differently, all had a solid understanding of the business they started before diving in.

For Eric Larsen, owner of Ben Franklin in Fergus Falls, operating craft stores was a family business, starting with his great-grandfather's store in Kindred, N.D. Larsen had worked at his father's stores throughout high school, and managed a Ben Franklin in Fargo for four years before opening the Fergus Falls store in 1984.

“You have to have some background,” Larsen said. “I'd hate to start a restaurant, for example, without any knowledge of the business.”

Similarly, New Dimensions owner Lori Burau had worked as a shift nurse at a hospital before deciding with her husband to create a home health care business. “After 12 years, I just decided I didn't want to do that anymore,” she said.

However, Meadow Farm Foods owner Joan Kohan's business venture is proof that passionate hobbies can evolve into a successful business.

Kohan was a teacher in 1981, but with her husband and friends decided to start Meadow Farm Foods based on an interest in organic and other specialty foods. “We were pretty gung-ho and excited about it,” she said. “We did a lot of reading and researching ourselves.”

• Be financially prepared

All of the local owners agreed that it takes between a few months to a few years for a business to generate enough income to live on it. Especially if it requires the owner take out a loan.

Floor To Ceiling owner Dennis Johnson, who purchased the Fergus Falls store in 1980, recalls the early days facing a 26-percent interest business loan every month, and having to live off rental income from the duplex he owned while living in the Twin Cities.

“I would sleep on my carpet pad in my store, and for two years collect the pop machine change so I could eat at McDonald's.” Johnson said. “I basically lived like a geek.”

Others, such as the Buraus, kept working other jobs — Greg at a dairy farm and Lori as a nurse — while operating their own business. They also kept expenses to a minimum.

“We were very frugal,” Burau said. “You just can't expect a business to support you from the beginning.”

• Find a niche

Knowing a business isn't enough, business owners say. A successful business needs to offer something unique, meet a demand in the market, and get in at the right time.

Larsen, for example, was familiar with Ben Franklin's evolution from a five-and-dime store to a large-scale specialty craft store, the only one of its kind in Fergus Falls.

“You really have to find your niche and go,” Larsen said.

The home health care business was in its infancy stages when the Buraus started New Dimensions in 1992. Today, home health care has grown not only in the demand for services, but in the regulations placed on the businesses who provide the service.

“I think we got in at the right time,” Burau said. “I think it would be tough to get into these days.”

Kohan said she realized the potential of her business, simply because the products Meadow Farm Foods offered were not available in Fergus Falls. “There was definitely a need to offer these types of foods,” she said.

Westra, who understood what parts needs manufacturers had based on 17 years of experience in the business, said starting a business without a niche is recipe for failure.

“If you're going to be going up against the big guys, doing the same things they are, you're going to be up a creek,” Westra said.

• Promote, promote, promote

No matter what the business is, local owners say being able to sell your product or service is vital to success.

Johnson, for example, worked as an accountant for Floor to Ceiling (then called Plywood Minnesota) when he decided to get into ownership. Needing sales experience, he worked for a store in Bloomington as a sales rep. “Within four or five months, I was one of the top 10 in sales,” he said.

The Buraus said they spent a lot of time visiting nursing homes and senior centers throughout the area offering their services.

“We tried to hit every place we could that we thought could possibly need services,” Lori said. “We felt we had to get our face out there.”

While Kohan said selling — like her food — is more of a natural thing, based on her enthusiasm for the products Meadow Farm Foods offers.

“For me, I do not feel like I'm a salesperson,” she said. “It's so easy to sell stuff I believe in.”

• Find good employees

For many owners, without good employees, the business simply would not exist.

For example, Johnson credits the hiring of salesperson Marlin Malingen from a local furniture store as key to finding a niche among local customers.

“When I got here, I didn't know a soul,” Johnson said. “When I hired Marlin, it gave me immediate credibility. It was really one of the huge steps.”

Kohan, who was still working as a teacher when Meadow Farm Foods started, said the business wouldn't have happened without having employees to help her.

“For me, employees have been essential,” Kohan said. “One of my employees has been at it longer than I have.”

For the Buraus, who have 250 employees scattered in the communities they serve, Lori said her background in nursing has helped her understand how to meet the expectations of employees.

“We have tried hard to treat employees the way we would want to be treated,” she said.

Westra said the one-year training period involved means he makes as much effort as he can to retain the employees he has.

“In this business, training is really expensive,” Westra said. “If we keep them, we want to keep them a long time.”

Johnson agrees.

“I believe getting employees trained so they know their product, taking good care of them, and then letting them free to do their job,” Johnson said.

Take calculated risks

Local owners agree that starting a business is all about taking a risk, and overcoming the fear of failure.

“Owning a business is not for the faint of heart,” Westra said. “You've got to be able to stick your neck out.”

Westra said he actually has more debt now than he did when he started the business, but debt is necessary in ensuring he has the equipment to keep up with the demands of customers.

“As your business grows, you're borrowing all the time,” Westra said.

The key, however, is in knowing when to take a risk, and when to be conservative.

The Buraus, for example, said growing slowly in clients, employees and services enabled them to grow to as large as they did.

“We started out small, and grew over the course of three years, learning one piece at a time,” Lori said. “I think we did it right.”

Kohan said she has taken some risks in expanding the operation, but only after discussing such ventures with everyone involved in the operation.

“We're very careful,” she said. “We've taken some risks, but not huge risks where we've put ourselves on the line.”

The result, Kohan said, has been steady growth.

“It's been a really stable, slow-growing business,” she said.

Stay positive

Whether they have been in business for two years or 20 years, business owners say the idea of not having a guaranteed paycheck can be daunting.

“You still never feel totally comfortable,” Johnson said.

Larsen said enduring the highs and lows a business can experience - from a loss of an employee to a drop in customers due to a declining economy - makes things that much more difficult.

“From the outside, a business looks easy to run,” Larsen said. “But there are an awful lot of things that could happen, and you have to be ready for them.”

Maintaining a positive attitude at all times, even when things happen that can be perceived as negative, is critical, Larsen said.

“It's hard not to get down during the low points,” he said. “But you have to stay positive, look to the future, and make plans for the future.”

Westra said suppressing his own feelings for the good of his employees and his business is the only way to survive.

“You try to sound like you're on top of the world, no matter what you really feel like,” he said. “It's kind of like acting. But if you sound depressing on the phone, you probably are.”

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