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Business growth occurs through a variety of methods

Kelli Boylen for Progressive Dairyman Published on 11 September 2017
Kozlovdky Diary Equipment is a family dealership

Often the decision to grow or transform a dairy farm revolves around adding family or improving profitability. The same is often true for the dairy equipment industry.

For Kozlovsky Dairy Equipment, growing the size of their business has a lot to do with family.

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Robert Kozlovsky started installing milking equipment as a Surge dealer in 1955. His sons, Dan and Joe, joined the operation full time after high school in the late 1970s.

Robert and Margaret Kozlovsky

When the brothers purchased the operation in 1993, their team consisted of the two of them, Joe’s wife, Desiree, their dad and one additional employee. Today, there are 22 employees serving a 15-county area in Wisconsin.

When the Kozlovsky brothers started working for the family business as teenagers, they were rebuilding pulsators for bucket milkers. In more recent years, they installed a state-of-the-art 100-stall rotary parlor, and they are currently installing a 40-stall robotic rotary milking system.

Part of why Dan and Joe Kozlovsky, along with their wives, decided to acquire five other businesses over the years is to help the third generation join in. Between Dan and Joe, there are three sons and a daughter already working for the business.

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“We want the third generation to prosper and continue to grow,” Dan Kozlovsky says. “And we may be a little crazy,” he adds with a laugh.

For Joseph and Cindy Leitner, owners of LDS Dairy System, the drive for growth came in the desire to build a better business. In 2004, they purchased Lisowe Dairy Systems in Chilton, Wisconsin. After acquiring the existing dairy supply business, they renamed it LDS – Leading Dairy Solutions.

“We set out to build a better business, not just create a job for ourselves. To do that, we needed to grow with the industry through better processes and staff,” Joe Leitner says.

Leitner brought with him experience from working in other industries. It provided a different set of organizational skills and methods to create a better work flow in his new business.

When the Leitners purchased the business, there were nine employees; today they have 43 with most of their customer base within two hours of their location. They outgrew the original building quickly and moved to a new location five times the original size.

“The first major change for our employees was the incorporation of technology in their daily work. When the business was purchased, they were not using computers,” Leitner says.

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He adds, “Utilizing technology to assist in maintaining records, analyzing systems on the dairy and providing a resource for information is a core function of how we do our work.”

The added focus on technology has been integral to this business and the service it provides.

“Tracking data on repairs and system information allows us to quickly respond to the customer’s issues. Again, using data as a driver, analyzing customer information allows us to better understand where we can assist them in getting the most out of their business.

For example, when a dairy has an issue such as mastitis, we are able to pull information on the milking system, claws, wash up, vacuum, etc., and email that to the vet,” Leitner says.

Jeff Jaco, who purchased Cloveridge Converting in DePere, Wisconsin, in 2006, took a different approach when it came to growth. He focused on offering a consistent, quality product to an existing marketplace – but also sought out additional markets.

The company itself started in 1979 as a full-service ag company, selling everything from cow towels to chemicals. When the owner’s son took over in 1990, he started to specialize in manufacturing and selling disposable dairy towels.

Once Jaco purchased it, he continued the focus on selling the towels direct to dairy farmers and opted to sell to dealers and wholesalers as well. The company also makes disposable towels for other industries as well as distributing other paper products.

Even with a well-established vision for each company, there were growing pains.

The Kozlovskys experienced a fire in 2003 that burnt their business to the ground. They pushed to keep their trucks on the road and servicing clients as they rebuilt in a new location in the neighboring town.

They have also had to adjust to a non-stop need for milking equipment service. Calls used to occur primarily from 4 to 8 a.m. and 4 to 8 p.m., but now with milking happening around the clock, they have someone on call 24 hours a day, seven days a week, 365 days a year, as well as a backup person.

“Keeping producers milking is our job,” Joe Kozlovsky says. Brother Dan says, “Dairy producers are doing their best to be efficient, so we need to as well.”

The Leitners’ need to address change was more internal than external. Transitioning to new ownership can be difficult, as everyone involved has to learn a new way of doing things. “Many times, the culture of the new owner is not the same as the prior owner. Implementing changes can be difficult,” Cindy Leitner says.

In wanting to maintain a strong business, they were cautious to not overextend themselves as their business grew. Cindy Leitner recalls early on an employee asking when they were going to go out and get more customers. Joe Leitner’s response set the standard for their business as he replied, “When we have taken care of our existing customers 100 percent.”

The Leitners focus on making sure all staff members are well trained before expanding, especially now as they plan to open a second location in the near future.

For Jaco to grow his business, he had to learn more about the dairy towel business. He had some dairy farm experience growing up, but when taking over the business, he spent a lot of time talking with farmers, attending trade shows and visiting dairies to see towels being used.

Dairy producers wanted consistency and quality, so he learned what raw materials to use and how to monitor the quality of those materials and the finished product.

Now Jaco’s understanding includes how the quality of towels can affect somatic cell counts, and he is sometimes even involved in problem-solving when a herd has a somatic cell count issue.

By figuring out what potential clients wanted in disposable paper products – on and off the farm – Jaco was able to grow his business. He also utilized the trade shows from which he first learned to expand his customer base.

Despite the growing pains, these dealers were able to make some gains with each transition.

As they purchased other locations, the Kozlovskys gained new employees. Several owners and employees of these other businesses, some of which were competition, now work for them. “We bring them in and see what their strong points are. Then put them into key positions doing what they do best,” Dan Kozlovsky says.

In the end, they found these transactions to be successful for everyone involved. “If you do what is right during a business sale, the buyer and seller are both happy and taken care of afterwards,” Joe Kozlovsky says. However, he notes it is important to be mindful of timing. “Wait for the chips to fall into place,” he adds.

Jaco says he enjoys working with dairy producers because they are down-to-earth people with good work ethics. He also likes being able to offer his employees the stability of having solid jobs in the community. Jaco plans to put everything he has into his business until he retires.

He says he hopes someday another family will purchase the business and continue to treat employees and customers well.

Just like dairy farms, equipment dealers opt for business transition with a focus on family and better profitability.  end mark

PHOTO 1: Kozlovsky Dairy Equipment is a family-oriented equipment dealership. It was started by Robert and Margaret Kozlovsky and is now operated by the second and third generations, left to right, Desiree, Randi, Anthony, Joe, Dan, Zak and Kory Kozlovsky. Business growth, including the purchase of five additional companies, occurred based upon family interest.

PHOTO 2: Robert and Margaret Kozlovsky. Photos provided by Joe Kozlovsky. 

Kelli Boylen is a freelance writer from Waterville, Iowa

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