Midwestern Mechanical, Inc. is a plumbing, heating, HVAC and fire protection contracting firm with a reputation for providing quality work design and service in the region. The work performed includes new work, additions, alterations, maintenance and repairs. Midwestern Mechanical has offices in Sioux Falls and Rapid City in South Dakota, and Sioux City and Spencer in Iowa.
In 1983 at the age of 23, Dwayne Klarenbeek established the business in Sioux Falls and has successfully grown the operation over the past 29 years. Throughout the years, the business has expanded from a start-up two-man shop to the current 125 employee operation it is today. Many of its employees have been with the company since its inception.
Expansion began in 1998 when Dwayne opened the location in Sioux City. The business expanded again in 2009 to Spencer and then in 2010 a fourth location was opened in Rapid City. These expansions were made possible through guaranteed loans with the Small Business Administration. In 2012, Dwayne turned to Dakota BUSINESS Finance to assist him with obtaining an SBA 504 loan to refinance his existing building in Sioux Falls which was completed in 2008.
While sales have steadily increased to a level of approximately $20 million per year, competition and the cost of materials have also continued to increase. In response to adversity and the changing economic climate, Dwayne implemented several significant changes to address the issues. Midwestern Mechanical has reportedly dramatically changed its focus and direction and now focuses on margins, profitability, efficiencies and relationship building. Dwayne also shows personal involvement in the day-to-day operations of the business. Monthly meetings are held with the foreman to discuss quality and performance issues such as job layout, manpower scheduling, material ordering, quality control and safety issues. These brainstorming sessions often include the owners and project managers. Dwayne has also started making regular brand and jobsite visits which have shown to boost employee morale and improve quality and efficiency.
In addition to being an experience businessman and successful entrepreneur, Dwayne understands the importance of community involvement as well as continued improved and innovative business ideas. Midwestern Mechanical is a member of the South Dakota Association of Plumbing – Heating – Cooling Contractors, Inc., which Dwayne has said has helped him develop important relationships with other contractors and supplies. He also supports the local Chambers of Commerce in the cities where his businesses are located.
When Dr. Michaels opened the Hartford Veterinary Clinic in 2009, her business brought a much needed service that had not been in Hartford for more than 20 years. Her business also generated additional tax revenue for the community and created jobs for skilled employees and young people who may be interested in pursuing a career in veterinary science. The clinic works exclusively with small animals such as dogs and cats, provides preventative and corrective surgeries and is a source of a variety of retail items such as pet food, toys, leashes and grooming supplies. In addition to the clinic being a valuable asset to Hartford and a new business opportunity for Dr. Michaels, it also allowed for Dr. Michaels and her husband to raise their four sons closer to the rest of their family. Dr. Michaels has made her presence and the presence of her business known in the community as she is involved with professional organizations, family and social organizations and provides a semiannual community service project for pet owners. She is a member of the Hartford Economic Development Corporation, United States Women of Today and with four sons, is active in school, sports, scouting and church activities. One of the community service events she does is to assist pet owners who do not have financial resources to vaccinate their pets. Dr. Michaels donates her time and staff for this event and the only charge is for the vaccinations. Dr. Michaels received a U.S. Small Business Administration 504 loan with Dakota Business Finance, a 7(a) loan with Reliabank in Hartford and worked with the Small Business Development Center in Sioux Falls.
SOUTH DAKOTA SMALL BUSINESS PERSONS OF THE YEAR
Kevin & Emily Berg, Owners
First Manufacturing LLC
Humboldt, South Dakota
What do two mechanical engineering students at the South Dakota School of Mines and Technology do after writing a business plan together for a class? They graduate, get married and start the business of course. Kevin and Emily Berg, owners of First Manufacturing LLC, did just that. Starting as a small home-based machine shop with only a manual mill and a manual lathe, First Manufacturing originally opened in Rocklin, California, in January 2003, but relocated to South Dakota later that year. As small business owners, they had questions about hiring employees, marketing and growing their sales, and contacted the Sioux Falls Small Business Development Center in Sioux Falls. The SBDC assisted the Bergs in leveraging their own investment dollars to obtain financing through a local lender and the APEX loan program of the South Dakota Governor’s Office of Economic Development. With these monies, the Bergs were able to purchase additional equipment and the former grocery store building in Humboldt to further grow and have room to manage the contracts they were landing.
Taking advantage of historically low interest rates, First Manufacturing again contacted the SBDC to assist in putting together a plan to refinance as well as obtain some additional working capital to support ongoing expansion. This was done through a Small Business Administration loan with great loan terms allowing the Bergs to obtain the working capital necessary for the business while minimizing the impact of the monthly cash flow.
First Manufacturing became a full-time venture in 2006 and has tripled in size, providing CNC milling, CAD/CAM work, turning, inspection and assembly. The company is experienced in a wide variety of materials including aluminum, steel, stainless steel, plastics and composite materials. In addition to being a component manufacturer providing materials for companies such as Daktronics, First Manufacturing also produces their own product lines, including the Copperhead Ag Furrow Cruiser, which received an award in the 2010 Governor’s Giant Vision competition.
Even in the midst of a recession, First Manufacturing has demonstrated outstanding growth. From 2009 to 2010, the Bergs increased revenues 134% which was followed by another 109% growth in sales in 2011. Consecutive years of doubling sales have also led to substantial increases in payroll, up 190% in 2010 and 161% in 2011 to keep up with demand.