Episode 60: From VW Bus to 800,000 Square Ft: Sweetwater Sound Grows in Fort Wayne
June 10, 2019
This week we convey you the story of Sweetwater Sound, a homegrown Fort Wayne, Indiana firm that started as a one-man operation in a Volkswagen bus in 1979 and has since grown to develop into the No. 1 online retailer of music instruments and audio gear. The corporate announced plans in October 2018 to take a position $76 million in two new amenities at its 163-acre campus in Fort Wayne, bringing its amenities to a total of 800,000 square ft. To get the complete story behind this impressive progress, we spoke to Sweetwater’s visionary Founder and CEO Chuck Surack and John Urbahns, CEO of Larger Fort Wayne Inc.
Endurance Fairbrother (DCI): The yr is 1979 and Chuck Surack has a dream and a VW bus. He has simply returned from a five-year stint enjoying music across the country, and he decides to start out his personal recording business right out of his car.
Andy Levine (DCI): Quick forward to 2019, and Chuck’s company Sweetwater Sound is the leading music instrument and audio gear retailer in the nation. In reality, we’re recording on Sweetwater gear right now.
Endurance: The corporate has seen impressive progress of over 20% in current years and right now has over 800,000 square ft of amenities. And they’re nonetheless based mostly right the place they began – in Fort Wayne, Indiana.
Endurance: So welcome to episode 60 of “The Project: Inside Corporate Location Decisions.” I’m Endurance Fairbrother of Improvement Counsellors International.
Andy: And I’m Andy Levine also with DCI and Endurance’s co-host of “the Project.”
Endurance: This week we convey you the superb story of Sweetwater Sound, a homegrown Fort Wayne, Indiana company that has grown from a one-man operation to turn into the No. 1 online retailer of music devices and audio gear.
Andy: The company announced plans in October 2018 to take a position $76 million in two new amenities at its 163-acre campus in Fort Wayne. That is the company’s third major enlargement since 2012.
Endurance: First we’re going to listen to from Chuck Surack, who started Sweetwater Sound when he was simply 22 years previous – that’s five years younger than me – and he did it out of a VW bus.
Chuck Surack (Sweetwater Sound): Properly, I began the corporate 40 years in the past in my Volkswagen bus. I was a musician on the street and got here house, frankly, to create a job. I used my bus to tug alongside church buildings, and faculties, and nightclubs, and I’d run 200 ft of microphone cables into the building, and then I might sit in the bus with headphones and a recorder and I might document these musicians, or artists, or whoever it was.
Endurance: Chuck knew from his time as a musician that renting studio area might be value prohibitive – so he introduced the studio directly to his clients. For the primary few years of the business, Chuck operated out of the Volkswagen bus and his 12 by 55 cellular residence on the south aspect of Fort Wayne, Indiana.
Chuck: I’d truly do the recordings in the bus and then I might convey them to the living room of the cellular residence. And then, ultimately, a small home on the west aspect of Fort Wayne, and then somewhat greater home, after which I built my first 5,000 square foot constructing. We have been there for 17 years, and it expanded from 5,000 to just about 50,000 square ft before we moved out back in 2006.
Andy: In 2006, Sweetwater moved to the northwest part of Fort Wayne right into a 50,000 square foot constructing. Chuck and his workforce shortly added on, and at this time, they’ve 400,000 sq. ft of area.
Chuck: The company, over 40 years, has just grown, and grown, and grown, and at the moment, we have now about 1,700 individuals right here at Sweetwater and about 300 in different companies that we personal. We specialize in selling music and recording gear to musicians everywhere in the country. They can be individuals just beginning to play guitar, or keyboards, or drums, or the most important names you possibly can think about.
Endurance: In October 2018, Sweetwater introduced plans to take a position $76.four million into two new amenities at its 163-acre campus in Fort Wayne. The enlargement will double the corporate’s presence to 800,000 sq. ft and add greater than 1,000 new jobs over the subsequent five years. So how did Sweetwater determine to stay and grow in Fort Wayne?
Chuck: We did take a look at places outdoors of the Fort Wayne space, and perhaps someday, that may happen. There are numerous challenges and pressures to perhaps have a distribution middle on the West Coast.
Andy: In accordance with Chuck, this strain to have a West Coast distribution middle comes from corporations like Amazon and Walmart – both of which introduced one-day delivery in the previous few weeks.
Chuck: Having fast entry for our clients goes to be necessary going forward, but we did some investigation on the West Coast, they usually have been fairly competitive. They actually…the states needed us to maneuver out there.
Andy: So why didn’t Sweetwater make the transfer to the West Coast? It comes right down to the truth that the company has had an ideal experience working there so far
Chuck: On the finish of the day, the state of Indiana, and particularly this region, Fort Wayne, has been excellent to us, and we’re also in an excellent proximity to an enormous part of the U.S. Yes, it’s somewhat longer to get to the West Coast, however we will attain something like 40% of the U.S. in only a 1 or 2-day service from proper the place we’re, which is why FedEx has a hub in Indianapolis and UPS has one down at Louisville.
Endurance: We requested Chuck to hone in on the top elements why For Wayne is engaging for rising a enterprise. #1 is Indiana’s enterprise setting.
Chuck: I feel it’s an incredible place for companies. The enterprise surroundings in Indiana is admittedly, actually good. The business surroundings in this specific part of the state is especially good, and that was very, very compelling to me. And if that’s not ok, we’re only two hours from Indianapolis, and we’re three from Chicago, and three from Detroit, three from Columbus, Ohio, and I’d say, “Why not Indiana?” I feel Indiana’s an enormous advantage, so that’s clearly the large factor.
Andy: Quantity two: the local talent pool and the Midwest Work Ethic.
Chuck: The second factor I might say is I have an organization in Florida and a variety of associates with companies everywhere in the country, and the quality of the workers right here is basically, really good. There’s a piece ethic, a Midwest, healthful ethic, that comes via loud and clear. My staff work actually arduous right here they usually respect the standard of life that they have, and it’s just a bit bit easier, as a enterprise owner, to seek out the type of people who I might love to have here.
Andy: We asked Chuck to broaden upon the native workforce as a key issue in the decision.
Chuck: It’s solely about 7 months later, we’ve already crammed 250 of those jobs, but the State actually stepped up and helped with coaching grants, they’ve helped with some recruiting, they usually simply set an surroundings that makes it just a little bit simpler. You already know, it’s all the time troublesome to seek out great individuals, but undoubtedly made it slightly bit easier to seek out good individuals, and I’m just really proud of what the State has accomplished.
Endurance: Finally, maybe extra essential to Chuck – even than the enterprise surroundings and native workforce – are these intangible elements that make him need to proceed to develop his enterprise the place it began. Quantity three comes right down to culture.
Chuck: On the finish of the day, frankly, at this level, I’m just a bit bit afraid to have another location. Might I actually have the identical tradition that we’ve in Fort Wayne? I’m just unsure I might duplicate that as easily, and a part of our power or benefit is having this really, really deep integrated culture. I’ve relocated about 70% of our staff to Fort Wayne, and I just need to make it possible for we stay as profitable as we will here for this region.
Andy: Despite Chuck’s want to stay, there was one stumbling block Sweetwater needed to work by means of as part of this challenge. We’re going to hear now from John Urbahns of Larger Fort Wayne Inc.
Endurance: You might recognize John from a earlier episode of our show the place we profiled social gathering provide firm Shindigz. John has spent the last 24 years working in group and financial improvement in Fort Wayne, Indiana – and has been CEO of Higher Fort Wayne Inc. for the last six months. Right here’s John concerning the main roadblock for this undertaking.
John Urbahns (Larger Fort Wayne Inc.): Properly, it’s a bit of a singular venture because their campus is true on the edge of the Fort Wayne Metropolis limits. So part of their campus is inside the city of Fort Wayne and a part of it’s in unincorporated Allen County. So from a undertaking perspective, you rapidly now deliver extra gamers to the desk. If you begin to take a look at redevelopment areas and convey in the town onboard and the county onboard to assist with totally different items of the infrastructure, it creates a more difficult state of affairs.
Andy: So the campus being inside each county and metropolis limits made issues a bit extra complicated. However Larger Fort Wayne Inc. was properly suited to deal with the state of affairs.
John: One of the luxuries we’ve right here as being the economic improvement company for both the town and the county, we will pull both parties into the room, work together collaboratively to know who’s engaged on the street, who’s working on the water strains, how can we help the challenge to be sure that they’ve every little thing that they want, that they’re in a competitive state of affairs and may get the most effective deal for the corporate.
Endurance: We requested Chuck how this affected the venture from his perspective.
Chuck: There’ve been a couple little issues, you realize, barely totally different guidelines concerning the land improvement, that type of factor, but I have to say, our City and our County have labored rather well together, and we’ve a number of examples where we’ve executed joint agreements with each, and one entity or the opposite takes management so I don’t need to cope with each the Metropolis and the County. I cope with the City on this factor, I cope with the County on that factor, and it actually has not been an issue and perhaps a bit of bit of a bonus for us as a result of I can type of take the most effective of both. If the County gives one thing fairly particular, I can go back to the Metropolis and remind the Metropolis of that, and vice versa. And I feel it’s an amazing instance of our City and County working collectively, and the leaders in our group and the employees in the varied departments for approvals and all which were just actually, really good.
Endurance: Finally, attending to take the “best of” the town and the county was type of an advantage for Sweetwater. So Larger Fort Wayne gained the day. But John and his group at Larger Fort Wayne Inc. know that, ultimately, Sweetwater is more likely to broaden beyond Fort Wayne.
John: Sweetwater is a superb company. It’s a regionally homegrown firm. They usually’ve also obtained, you recognize, very much a national, if not worldwide, presence. So we all know that, sooner or later, there’s in all probability cause that they need to be wanting elsewhere to increase. We did know that there were other places that have been very a lot courting them. If you take a look at how some communities go after an organization, they’re in search of corporations exactly like Sweetwater which are on a high-growth trajectory they usually really feel can be nice in one other setting. Fortunately, Chuck and the group at Sweetwater felt that they might proceed to develop right here. I feel we know that, sooner or later, they’re going to should increase elsewhere in the nation. It simply is sensible logistically, sooner or later. But for right now, we’re on a superb run.
Endurance: The company is properly on their solution to increasing their operations, with 250 new staff already employed in the primary 7 months. In 2019, Sweetwater expects to do over $800 million in sales.
Andy: So Endurance, I know we’re going to talk concerning the takeaways of this challenge. But first, you understand, gosh, just what a tremendous firm, superb progress.
Endurance: Such an fascinating story. I really enjoyed interviewing Chuck. He simply had such a cool story of operating his business.
Andy: Now, I’m positive when you had a VW bus whenever you have been 22, you’d also be operating an $800 million firm, right?
Endurance: I’d wish to assume so, yes.
Andy: Okay, sure, yes. The VW bus is the necessary thing. All proper, let’s speak about this undertaking. Endurance, you spoke with both Chuck and John. What have been the large takeaways?
Endurance: Two things really stood out to me. And I feel the first is admittedly the importance of this enterprise retention. I feel we’ve heard this on several episodes in the previous, but typically if the group has an awesome company that’s already rising there, the venture is absolutely theirs to lose in a whole lot of instances. Corporations do need to proceed to develop the place they’ve put down their roots. So in this case, Sweetwater was dedicated to staying in Fort Wayne, and Larger Fort Wayne Inc. just wanted to assist them get there.
And the second thing I’d say is simply the value of continuous to construct an organization culture. Chuck even mentioned that he stated he’s sort of afraid to increase elsewhere because he’s frightened that that tradition that he’s built during the last 40 years is perhaps going to vary, or it gained’t be capable of be replicated in another location. So it’s type of that intangible issue of getting this tradition that you simply’ve built from the bottom up. And is this going to vary my company basically if I move it some other place?
Andy: So it seems like culture wins the day.
Andy: So that may be a wrap on episode 60 of The Challenge: Inside Company Location Selections.
Endurance: We need to thank Chuck Surack and John City for taking the time to share their tales with us. Thanks also to Kate Yurig of Northeast Indiana Regional Partnership for coordinating these interviews.
Andy: The Venture is sponsored by DCI. We’re the leader in advertising places, and have served over 450 cities, states, regions, and nations. You’ll be able to study extra about us at aboutdci.com.
Endurance: We hope you’ll hold listening. There are numerous more tasks to return.