Growth has to be strategic, not growing just to grow, say small Top Workplaces winners

Companies big and small know that growth is desirable, but unchecked growth can put a business in a tailspin.

Fred Bursch, president of Bursch Travel in St. Cloud, said that after 40 years in the travel business he still needs to look for growth opportunities.

"It's too easy to fall backward if you don't," said the 67-year-old. "You need to be on the lookout for the next generation of future employees."

Nearly all small businesses want to grow, but timing is everything, said Doug Van Polen, co-owner of Serenity Couture Salon & Spa in Rochester. Several of his company's six locations in Minnesota and Iowa are in malls, and Van Polen expects more growth in the future as malls convert to lifestyle centers. It's possible that rents might decline as malls reformulate amid retail closings.

Serenity, ranked No. 1 among small companies in the Star Tribune Top Workplaces small company list, has had to adapt to meet customers' needs. Its services such as nails, haircuts, spa, massage, waxing, spray tans and facials continue to be strong, but sales of personal-care products continue to decline as more customers buy those items online.

Serenity hopes to make up the slack by adding a second school. "We strategically place our schools as a way for our salons to grow," he said.

Each company chooses its own pace for growth. At Allweather Roof of Golden Valley, steady, progressive, long-term growth is preferred over short-term. The 94-year-old company, No. 8 on the list, has doubled in size and revenue in the last decade.

How did they do it? President Ken Sorensen said his commercial roofing company gets businesses to trust Allweather on smaller projects, which leads to bigger ones.

"With Hormel, we started with one or two of their plants, and now we've done 68 of their plants across the Midwest," he said.

The company just worked on a project in South Dakota that was the largest capital expenditure in the state — an Agropur Dairy Cooperative milk and cheese plant.

Such projects, when done to the customer's satisfaction, lead to growth. Satisfied customers lead to referrals. Sorensen said companies need to ask satisfied clients for referrals to other possible clients.

Allweather has been so successful with this strategy that last year it turned away work it would normally pursue. "Rather than stretch ourselves too thin, we turned it down," Sorensen said.

Turning down business didn't mean turning it away. Sometimes the company gave the customer an option of doing maintenance until it could get into the replacement schedule.

"One way or another we can meet their needs. We can do a repair and replace or do something over a five-year period," Sorenson said. "Some facilities are large enough where there can be 100 different roof areas that were built in different phases. We can do maintenance on some and replace three to five roofs per year."

Demonstrating how the company is growing also works as a recruitment tool. Allweather Roof found that existing employees often make its best recruiters, bringing in nearly 90% of new hires, which is crucial in a tight labor market. Allweather gives recruitment bonuses, and employees can tell recruits about reliable hours in an industry that often provides inconsistent employment.

At Mortgages Unlimited in Maple Grove, the company's growth strategy also has been a good recruitment tool. It has stayed diversified by never banking too much on refinancing. It has added products such as loans for veterans, home renovations and FHA loans for people with challenged credit.

"That's an advantage for us because we cross-train our employees across those departments," said Chief Executive Chris Fredin.

Product diversity has helped protect growth at the company that was No. 15 on the list. Whereas other mortgage lenders have seen a double-digit decline in sales because of lack of inventory, Mortgages Unlimited has seen sales remain steady to increasing 5% in some areas, Fredin said.

Travel agencies have also seen a downturn in business as consumer tastes have changed, but Bursch Travel, No. 37 on the list, has capitalized on it. It has stayed relevant for consumers who now book most flights themselves online by diving deep in tour packages and group travel.

"The internet is a great tool for the individual booking travel plans, but it's also a hindrance, too," said Bursch. "There are so many options the customer becomes confused."

Bursch Travel, which prefers to operate in towns with populations of 75,000 and smaller, has expanded by buying existing travel agencies in towns such as Casper, Gillette and Sheridan in Wyoming.

"I look for new opportunities where I can make money on them within two to three years at the most or it drags us down," Bursch said. "And we always have to absorb it before tackling another. So every two to three years I'm looking."

The strategy is working. The company now has 18 locations with 12 in Minnesota and others in Wyoming, Nebraska and the Dakotas.

"The last six years have been record years for us," Bursch said. "Each year is better and better for store growth."

John Ewoldt • 612-673-7633