A Successful Dakota Business Lending Borrower
Apr 9, 2018
After years of going to his wife’s beautician for a haircut, Mitch Kost was blown away by the experience he had the first time he went to a local men’s hair salon.
As a man in pursuit of business opportunities and options, it was after this experience that Mitch realized he may have found his niche. It wasn’t until a good year spent on researching and pursuing that he came across Sport Clips, what he saw to be the leader in this industry. All it took was a few inquiries with the company for him to find out there was a territory open in the Bismarck/Minot/Western North Dakota area for him to enter.
Because of Sport Clips’ success in Grand Forks and Fargo, Mitch was confident that this would be a beneficial business to welcome into the western half of the state. The conversations he had with company representatives and an area developer gave him a good idea of what kind of company culture and values the Sport Clips had, reassuring him of this business venture and making him determined to move forward.
“Throughout my research with Sport Clips and talking with company representatives and an area developer, I got a really good sense of the type of people and the type of company that it was…I could tell people really cared about the company and lived its values…I just felt that this was the way to go.”
All Mitch had left to do was figure out how to do this financially.
Mitch began going from bank to bank, pitching his idea and looking for financing. But, despite his ownership in several Subway restaurants throughout the area, he still did not seem to have enough collateral to get any of them on board. It wasn’t until he got in contact with a financial advisor that his father knew that he came across Dakota Business Lending’s Community Advantage loan program. This loan would give him the path to bankability that he needed to secure the necessary financing to pursue his dream. The next thing he knew, he was meeting with Dakota Business Lending and taking the next steps he needed to open up Sport Clips. “We met [with Dakota Business Lending] and talked about what my vision and put together a business plan. From then on out, they guided the ship to the end.”
“[Dakota Business Lending] was already willing to meet if I needed to. We met several times throughout the whole thing…and they answered questions in a super timely manner. The timing all came into place with finishing up the loan and financing and I was able to open up my store in Minot because of it.”
It wasn’t long before Mitch opened his first Sport Clips location in Minot, ND, which far exceeded his expectations. “My initial vision [for Sport Clips] was to provide an experience…I knew that if we could get people to come just one time, as long as we could deliver the experience and do our part, it would be a concept that would be very popular and take off from there,” explained Mitch. He also set of a goal of having a waiting list for stylists which, after just over a year of being in business, they are close to achieving. Because hiring initial staff can sometimes be a little stressful, Mitch was relieved when he was able to find 8 local and licensed stylists for his Minot location who were on board with his vision. Today, they have 14 employees. After a successful year, Mitch expanded the business to open up another location in Bismarck, starting with just 7 employees and growing to 10 today.
This success, Mitch believes, is due to the unique experience and atmosphere that Sport Clips provides for its customers. Their most popular service, the MVP Experience, is not just a hair cut. In addition, the MVP receives a hot towel and scalp, neck, and shoulder massage, all while sitting in a massage chair. Not only that, but they are surrounded by a sports themed environment. With TVs with sports channels, murals all along the walls, and stadium lighting, the customer truly feels like an MVP.
Massage chairs for the MVP Experience
“The MVP Experience is definitely our signature service and guys really like it. It’s that step over and above a hear cut that gives you an experience that, once people try it, they fall in love with,” Mitch affirms.
Sport Clips not only watches and supports national sports, but they also have strong ties with local Bismarck teams. They have participated with Brave the Shave for the Bismarck Bobcats and plan to get involved with the Bismarck Larks starting this summer.
For the second location, Mitch had a proven history from the first location that provided the foundation for obtaining bank financing. In less than one year, he had started and grown his business to the point that cash flow, collateral, and risk were in acceptable parameters for a bank to provide the financing for the new location as well as refinance the original loan on better terms. This is a perfect example of a business that needed non-traditional options to get started and provide the path for creating their long-term banking relationship after they had the opportunity to prove their model.
After reflecting on the journey that he embarked on throughout the past couple of years to get to where he is today, Mitch felt the best advice he had to offer was to trust your thought process and be fully invested in your pursuit.
“Don’t stop if you hear the word ‘no,’” Mitch encouraged. “You just have to believe that there’s some program or somebody somewhere that can help you make your dream possible. For us, that was Dakota Business Lending.”
Mitch with his very first customer at Sport Clips
Since it’s opening, Sport Clips has thrived in both locations. So much so that they have been in the top 15, if not the top 5, throughout the entire Sport Clips franchise. And seeing this success is one of Mitch’s favorite parts of owning and managing Sport Clips.
“Looking back, I always think I was nuts to do it and don’t know if I’d have the energy to do it again. It’s rewarding to see what we’ve accomplished… and see it come to fulfill my vision. That’s probably the most rewarding part,” said Mitch with a smile.
Looking forward, Mitch is definitely open to other areas of opportunity throughout the western half of the state where he could possibly open another location. However, he plans to spend most of his time and energy continuing to build up and grow his two current locations. “I want to be known as a good place to work, a fun place to work, and a place that cares for its employees.” Last but certainly not least, he aims to achieve the Sport Clips vision: to ensure his customers walk out feeling like an MVP. Guaranteed.