Is growth always the goal? And how do you sustain it? The CEOs of Faribault Woolen Mill Co., Brooklyn Center-based Climate Makers Inc. and Hill Capital Corp., a new investment fund focused on middle market companies, discussed market trends and challenges Tuesday at TCB Talks: Middle Market, which was held at the Metropolitan Ballroom in Golden Valley.
Here are some highlights from the discussion, moderated by Twin Cities Business Editor-in-Chief Allison Kaplan
Tom Kileen, CEO, Faribault Woolen Mill Co.
“Our biggest strength is sometimes our biggest enemy,” says Kileen, who joined the iconic company in 2017—six years after the mill was purchased and reopened by Chuck and Paul Mooty. He talked about the challenge of repeat business with a product that’s built to last. “We’re aggressively looking at our product portfolio. We’re looking at more accessories in 2019. We need to be in product forms that are more relevant to people’s lives.
But increasing production can be challenging for a vertically integrated brand, which relies on hand work. Faribault currently runs only one shift in its mill, and while adding a second is a possibility down the road, Kileen says he’s also considering collaborations which would allow for Faribault wool to be used in products made by partner brands.
Another goal is spreading the brand story beyond Minnesota.
“People buy our product, in large part, because they like the story that goes with our product,” Kileen says. “We need to tell that story in other parts of the country.” Social media, earned media in national publications and collaborations help to spread the word.
Lori Bauer, president and owner, Climate Makers Inc.
Since acquiring Climate Makers in 2006, Bauer has grown the company’s revenue from $5 million to nearly $20 million and opened two satellite offices.
Although the growth has been constant, Bauer is cautious, preferring to add clients rather than branching into additional services. When offered a contract that included mechanical maintenance of 29 buildings, Bauer says she convinced the client to give her a few at a time rather than taking on too much at once.
Service, and honesty is a big part of Climate Makers success, she says. “We try to be a resource for everything, so if [our customers] have any need in their building at all, they call us,” she says.
Asked about employee satisfaction in a challenging hiring market, Bauer says, she’s always available to her team of more than 80 service providers, but she also trusts them. “It’s important to empower the guys who are out in the field,” she says. “I know my guys, and I know their families. Plus, we’re like a family, so they feel very important.”
Patrick Donohue, president and CEO, Hill Capital Corp.
He’s not yet seeing definitive signs of an economic slow-down, but says patterns suggest that companies should be prepared. “You want to look at ways to make a business less fragile—recession resilient.”
Donohue says he suggests middle market companies create an advisory board and think about how best to utilize outside expertise. “You want to punch above your weight.”