In 2005, senior finance student Rick Schmitz didn’t know a lot about his future career. But what he learned from internships and classwork was enough to convince him that finance was not what he wanted to do for the rest of his life.
It wasn’t long before Schmitz found himself browsing an online business-for-sale marketplace during his business-law lecture. Scrolling through a page from a link sent by his brother, Schmitz saw a future in small business ownership begin to take shape.
Schmitz knew he wanted to move back to his home state of Wisconsin, and also had an interest in skiing and recreation, so he plugged those qualifiers into his search query. Nordic Mountain, a ski resort in northern Wisconsin, was first on the list.
Making ski hill dreams come true
From then on, the opportunity to own Nordic Mountain became an obsession.
“It started out as a pipe dream,” Schmitz said. “I began writing a business plan, stopped interviewing [for other jobs] and put all of my effort into buying Nordic Mountain.”
In May 2005, just a week after graduation, the owner of Nordic Mountain accepted Schmitz’s offer — but that was the easy part. Securing financing for a business is challenging, but even more so when you are 22 years old and lack capital.
With his business plan in hand, Schmitz began pitching to several different banks. Facing discouraging reactions, he contemplated giving up and applying for a traditional job. Schmitz proposed a new plan that included the old owners staying on in a consultative type of role, helping him run Nordic Mountain for the first year. Finally, banks started listening.
With this added security, plus backing from Small Business Administration (SBA) and State of Wisconsin tourism loans, a deal came together. The business was Schmitz’s by November of that same year, just a month before Nordic Mountain opened for the season.
“Looking back it was kind of a blur,” said Schmitz about his first days as owner. “It was so exciting, and I was working nonstop.”
Aprés-purchase road bumps
The post-purchase arrangement went as planned — for three days. While the previous owners were supposed to stay on and help with the transition, Schmitz soon realized this wasn’t the best course of action. Fortunately, while the banks were more comfortable with the former owners staying on to help that first year, it was never a formal part of the loan agreement.
By nature, snow parks and ski hills consist of many small businesses rolled into one — each with its own department manager. Between May and November, Schmitz had many conversations with the department managers and realized the old owners had repressed new ideas for far too long. Clashing with the old owners’ authoritative management style, Schmitz went forward with Nordic Mountain on his own — this time with a new strategy.
“My first-year strategy was to sit back and let my department managers run the business and learn from them,” Schmitz said. “I empowered them and said, ‘You guys run this, I'm going to observe and help in any way I can, we are going to learn together.’”
Learn and grow they did. Under Schmitz’s new leadership, Nordic Mountain grew year-over-year and was almost immediately profitable. After four years, a real estate investor took note of Schmitz’s success and pointed him to Blackjack Ski Resort in Bessemer, Mich. The investor wanted to bring life back to the park, and knew Schmitz was the man to do it.
Taking a Gamble with Blackjack Ski Resort
Schmitz promoted a senior manager at Nordic Mountain to take over operations, and went to Michigan to run Blackjack, which became another successful venture. His prowess in turning around not one, but two snow parks didn’t go unnoticed by his brothers, who initially were skeptical of his nontraditional career path.
“They saw how much fun I was having,” Schmitz said. “I really wasn’t making much money at the time yet, but I was reinvesting in the business and loving my job — and they took notice.”
Together, the brothers started looking for opportunities to expand their successful growth model. In a stroke of luck, Little Switzerland, the snow park they grew up skiing on, had been closed for five years and it was in a good place for renovation. They struck a deal with the owners and reopened the park in 2012.
Little Switzerland immediately took off, profiting even faster than Nordic Mountain. But for Schmitz, who was a new father and the source of guidance to his brothers, managing three hills was becoming too much. They decided to exit Blackjack and focus solely on Nordic Mountain and Little Switzerland.
Yet, another hill was just around the corner for the brothers. Once Little Switzerland reached a healthy performance rate and was running on its own, they reached out to Rock Snow Park in Franklin, Wis., and took that over as well.
Currently, the Schmitz brothers are two years into operating Rock Snow Park, still in the weeds of getting everything running just how they want it — having made enough progress that they can back away from being so hands-on. While their plates are very full, Schmitz always has an eye on available opportunities.
“There is rarely a ski hill that comes on the market that I don’t at least take a look at,” Schmitz said. “Especially anything in the Midwest; I’ll look at the numbers and see if it makes sense.”
Keys to Small Business Success
While not everyone can be so fortunate as to own a business that matches their passions, Schmitz admits his love for skiing is a major factor in his success as a business owner.
“The key to my success is that I was able to find a business that I am super passionate about,” Schmitz said. “I think that makes everything so much easier — it’s not work when it's something that I love so much.”
Buying a business for the first time can be challenging, even if you are passionate about it. If you find yourself pursuing your dream career, but are struggling to get financial backing, consider these tips to close the deal:
- SBA Loans. These loan options allow first-time or smaller entrepreneurs to qualify for a loan that might otherwise prove difficult to secure. The SBA does this by offering a large guarantee of the loan amount, which means less risk for the banks.
- Seller Financing. Rather than secure funding through a bank or lender, seller financing allows buyers to obtain a loan from the seller of the business. Usually, a portion of the purchase is paid for with cash, and the remainder is repaid with interest over a set period of time. This can be done in addition to a traditional loan and makes the buyer seem less risky to lenders.
- Alternative Lenders. If you don’t qualify for a traditional loan or an SBA loan, non-bank lenders offer an alternative. Compared to banks, private business lenders have a wider variety of options, like medium-term and short-term loans and credit lines. Plus, since these loans aren’t fielded through a traditional bank, the whole process is much faster.
With so many funding options available to first-time entrepreneurs, your big dream is often much more attainable than you first may have thought. Take time to research and find your perfect fit — sometimes you get lucky and your dream job is first on the list.
