Mike Gruenwald recently and proudly changed his title from tenant to owner of commercial real estate. Aiding in the undertaking, were partner lenders—Reliabank in Watertown and First District Development Company via the SBA 504 loan program. Mike is no longer helping a landlord increase their equity position, but rather he’s building his own.
The decision to embark on this project wasn’t sparked by desire, but rather necessity, as Mike’s business had reached maximum capacity at its rented location. Furthermore, Mike’s seed provider—Channel Seed, gave him an ultimatum.
Glacial Lakes Ag Supply—the business Mike owns—is now located in rural Clark County. Mike’s project involved the purchase of land, construction of a new building, and the purchase and installation of new equipment. The project land was purchased in advance of starting construction, but was included in the project as refinanced debt. The land is located 1/2 mile south of SD Highway 212, right on SD Highway 25. Clark is where Mike grew up, so he is very familiar with the area and the people in it. This location is optimal for Mike’s business to thrive, as it is located in the heart of Mike’s customer base—making it ideal for distribution and prospecting. Mike delivers nearly all the seeds he sells directly to the customer, while a small percentage pick the seeds up themselves. Logistically, the new location makes sense, saving Mike drive time and cost of fuel.
In regards to Mike’s reason for doing the project, his former rented location in Watertown was operating at maximum capacity. He was at the point he could not take on any new customers. He simply didn’t have room for it. The other main reason the move was crucial was because Channel Seed determined Codington County was over saturated with seed dealers and there was no Channel dealer in Clark County. Channel recognized the importance of having a seed dealer in Clark County and they pinpointed Mike as their top choice.
In add
ition to the refinance of land and the construction of the new 70 x 150 building, Reliabank and FDDC/SBA also financed Mike’s purchase of the four bins and bulk system. This set up is a far cry from the facility rented in Watertown, which even though it was the same size as his new building, it did not have any bins for seed storage nor did it have a bulk system. Also, the sidewalls at the rented located were five feet shorter than his building now—which limited room for the seeds to be stacked. In addition to the efficiencies and cost savings the new building and location has produced, it has also allowed Mike to be able to take on new customers. Having the four bins for storage allows for more storage space overall, which in turn, opens up possibilities for increased sales.
As a seed dealer for Channel Seed, Mike realizes he sells an elite product, which does come with a hefty price tag. Mike believes by providing a quality product his customers will benefit from an increased return on their investment. His relationships with his customers are built on mutual trust and the continual investment of time Mike spends understanding his customers needs and concerns. Mike believes his new, visible location in Clark County will only strengthen the relationships he has with his existing customers and will simultaneously attract new customers.
FDDC wishes Glacial Lakes Ag Supply many more years of continued success at its new location!