About five years ago, Shane and Becky Harkins, owner and office manager respectively of Koehler Home Sales in Chillicothe, Mo., weren't seeing eye to eye.
Not on selling, installing or transporting manufactured and modular homes in north-central Missouri.
On the names of their soon-to-be-born twins.
Shane's parents had given their children names beginning with "S" and Shane wanted to continue the family tradition.
"I said, 'No way!' " laughs Becky from the business' office, located about an hour and a half northeast of Kansas City. "All the good names had been taken."
The couple compromised and named the twins Max and Mason — a new family tradition, perhaps.
This same grounding in tradition with a flair for adaptability characterizes Koehler Home Sales. Shane has a solid background in the business, having worked for himself as a modular home installer and for several modular homes dealers over the years, notably that of Bill and Dee Koehler in Chillicothe. When the Koehlers retired, Shane bought their business and sales, keeping the name because of its strong community connections. The new Koehler Home Sales opened in the boom year of 2006.
"It [Koehler] was a well-respected, well-recognized name in the area," says Shane. "It just made sense to keep it."
The couple also adopted a full-service model: Their new business would sell, deliver and install a new home or remove an old one completely, making Koehler Home Sales a one-stop shopping experience.
It worked. Revenues were good through 2007.
Then came the downturn.
The modular home industry, like many American industries, was virtually crippled. At one point, the Harkins only had one home on their lot, and it was made by a bankrupt manufacturer.
They desperately needed their local large bank to continue a line of credit on their floor plan, secured with their family farm for collateral. Shane and his parents also raise cattle near Tina, Mo. Floor plan financing, also common in the automotive business, extends a line of credit to buy homes or cars to keep the business moving, helping obtain and maintain inventory through access to capital at rates no longer supported by many financial institutions.
Business sputtered, however. Worse still, the bank threatened to pull the loan. This would have taken down more than the business; it would have consumed the family's heritage. The couple were at their wits' end.
Enter the Northwest Missouri State University SBTDC at Chillicothe and its director, Steve Holt. In 2010, Holt and the Harkins met to assemble a new loan application, a business plan, personal and business financial statements, three years of taxes and all the other financial detail a bank loan requires.
Holt also helped the Harkins research labor rates and interest and principal payments. They also discussed and developed such marketing ideas as a website, using jobsite signs — Coming soon! A new home by Koehler Home Sales — and placing banners on sold homes.
Together, Holt and the Harkins identified local, small-business friendly banks. Holt then accompanied the Harkins to Bank Northwest, a small-town Missouri bank, for the loan pitch.
Bank Northwest turned them down.
The bank told the couple the deal wasn't completely dead, however, if the Harkins agreed to certain conditions. Holt reviewed the letter and strongly urged them to accept these conditions. The bank approved the loan in October 2010.
"Steve helped us so much," Shane says. "He was able to help put our financial plan in order and present it to local banks ... They [Bank Northwest] looked at us as individuals, not numbers. Just because we are small it doesn't mean we're unreliable. They understood that.
"He [Holt] was so patient and he knows what he's talking about, too ... It was amazing what he did for us. We would not have our current life without him. We would have lost the farm, too. He saved us from that bank."
Holt downplays his role. "Their business is growing because of their very hard work and a banking relationship that they can depend on," he says.
The Harkins say they've learned a lot about finances from the experience and are much better organized, with a new confidence in themselves and the business.
As a result, the business has rebounded and is steadily approaching 2006 levels, Shane says. The couple has also diversified their product line to include prefabricated mini-barns and carports and expanded their range to sell, install or transport new homes or remove old ones as far north as the Iowa border and as far west as Kansas.
That they put their money where their pillows are doesn't hurt, either: The Harkins live in a type of larger modular home that they sell.
The future looks bright.
Becky says she doesn't want it to get too bright, though. "We have five-year-old twin boys ... I want to balance work and home, spend time with them as they're growing up."
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This story was featured in the July 2012 newsletter.
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