Family woodworking business finds steady growth in second generation

Dec. 24, 2018

This paid piece is sponsored by the Prairie Family Business Association.

It probably signaled the career that was to come for Tom Patzer when he was the only kid in high school to spend every study hall in the shop classroom and his resulting projects were displayed in the window of the principal’s office.

Fast-forward a few decades and he’s the owner of Patzer Woodworking, a 25-person Mitchell-based designer and crafter of custom cabinetry and counter tops for homes and businesses.

In between is a story of family business success from the ground up and a company that’s now looking toward its next generation.

“We knew nothing about business,” Patzer said. “But my parents grew up running a hardware store in Minnesota, and they worked all the time, so we knew if you worked all the time you should get somewhere. And we worked a lot.”

Patzer was born in Watertown, graduated from high school in Marshall, Minn., and then attended a technical school in Austin, Minn., where he earned a carpentry and drafting degree.

Following college, he found a job in Mitchell working for a trim crew at a lumberyard. His wife, Sherri, worked at a law firm, and her boss asked Patzer if he would consider building an office for the firm.

“We talked them into letting us build cabinets for the entire building, and I quit my job,” Patzer said.

That was in 1981.

“My wife did my books, I did the building and estimating, and we worked out of the garage of our house for about four years,” he said.

The birth of their twins, Amanda and Ryan, meant moving the business out of the house and into a bigger building in 1986. It burned down six years later, and they built another one that they outgrew in seven years. Their current headquarters is a 32,000-square-foot building in Mitchell that they have been in for 17 years.

“You cut your teeth doing residential kitchens,” Patzer said. “And right now, with the way Sioux Falls is growing, the commercial market has really skyrocketed.”

Recent major projects include the Avera Family Health Center, the First Dakota National Bank branch at 69th Street and Western Avenue, and the Zeal Center for Entrepreneurship. Next year’s projects include the Minnehaha County Jail and Roam Kitchen + Bar.

The work is mostly within a five-hour radius of Mitchell.

“Up until the last couple years, we would go about as far as Pierre, but now we’re doing more in Rapid City and a little down in Nebraska and even a project in Iowa,” Patzer said.

“We’re always on time. That’s a big word, but that’s what’s getting us the business we’re gaining.”

Second generation

Patzer always thought his son, Ryan, who began working in the business as a teenager, would come back after graduating from the South Dakota School of Mines and Technology. His intuition was right as Ryan returned to the business in 2007.

“He works in our commercial division and does all of the estimating and runs the jobs.”

Before working in the office, Ryan built cabinets, worked in the finish room and helped with installation.

“It’s really important they work from the bottom up,” Patzer said.

The return of Ryan’s twin sister, Amanda Neppl, in 2011 was not as expected.

“One day, she came up and said, ‘Dad, I’m thinking of coming back to the family business, would that be OK?’ And, of course, I said OK,” Patzer said.

Neppl also had grown up working in the business, staining in the finishing department and helping in the office. Her first job out of college — she attended Southwest Minnesota State University in Marshall — was at Mitchell Technical Institute in both admissions and career services.

But as Patzer Woodworking started growing, the appeal of helping expand the family business piqued her interest.

“I feel like I was at a point where I would never know unless I gave it a try,” she said. “We’re a unique business because we offer the full service – design and estimating for free – and everything is streamlined. We have our own set of designers, drafters, builders, finishers and installation crew. When customers walk in the door, we can offer them everything from start to finish.”

She now runs the residential side of the business and manages the designers.

“There’s a lot of passion, heart and desire going on with my children,” Patzer said. “I think the next few years before I retire are going to be really good.”

Building best practices

While Patzer learned business as he went, he and his family are learning best practices as a family business with some expert help.

“We’re a pretty tight-knit family, so it seemed like we were talking about the business whenever we were together,” he said. “I’ve always felt like my kids were smarter than me, but working together has been kind of a trial by fire.”

Patzer hired the human resource consulting firm The Weston Group to rewrite their company handbook and update procedures. Trish Dougherty, the firm’s CEO, introduced them to the Prairie Family Business Association.

“We went to their annual conference and really enjoyed it, and we’ve gotten to know other families,” Patzer said. “My son is in one of their peer groups and said he loves going to their meetings to hear what other young people say about their businesses. It’s a great resource.”

The Patzer family also was offered the chance to become a case study for the Prairie Family Business Association.

“It was basically an entire morning of professionals devoted to our family,” Neppl said. “We had a room of a dozen experts – an insurance person, a banker, a therapist, an HR person, financial people, an attorney – and they just wanted to hear our story and offer any advice they could. We felt very privileged they gave us that opportunity.”

The team put together a review of the case study with suggestions on how the Patzers might move forward with planning for an eventual ownership and leadership transition.

“It was a push for us to get serious about putting things in writing and coming up with a plan as Dad is approaching retirement,” Neppl said.

That led them to work with Mike Ridder, the CEO of Blueprint Business Advisory, who is guiding the family through its transition now that time frames have been set.

“He’s very good at organizing us and helping Ryan and Amanda realize what they’re getting into,” Patzer jokes. “It’s better for Mike to walk them through the financial part of the business so they understand the balance sheets and so forth.”

The Patzer family is a perfect example of how Prairie Family can support businesses into their next stage of growth, said Laura Schoen Carbonneau, executive director of the association.

“We’re so glad we connected with the Patzer family and that they are finding our resources to be so helpful,” she said. “It’s exactly what we want to see happen when families learn the value of our professional partners and have the chance to build relationships with other family businesses.”

In the meantime, the business keeps expanding.

Patzer Woodworking now designs, builds and installs kitchens, baths, offices, entertainment centers, fireplace surrounds, bars and any space in a home. Its commercial work can be found in everything from banks to libraries and schools to hospitals.

If the Patzer name begins to appear more often in Sioux Falls, it’s by design. One of the employees lives in Tea and has been driving a Patzer-branded van as he pursues potential business in the area.

“It’s kind of funny. Back in the day, you just wanted to go to work and build stuff, and then it just kind of took off,” Patzer said. “We’re a far cry from a big business, but with the planning and help we’ve gotten, I think the opportunities for my kids to take it up to the next level are really good.”

The Prairie Family Business Association is an outreach center of the USD Beacom School of Business.

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Family woodworking business finds steady growth in second generation

“We knew nothing about business, but … we knew if you worked all the time you should get somewhere. And we worked a lot.” From working out of a garage to growing a regional business, enjoy the success story of Patzer Woodworking.

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