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How to manage your small business cash flow • 60-second
guide to managing cash flow, from SCORE • How to
better manage your cash flow, Entrepreneur.com •
Upsize Nov 03: How to get paid, up front and in full •
Upsize How-to Audio: Podcast with Richard Brown, How
to guard the holy grail: cash flow • Upsize How-to Audio:
Podcast with Charles Selcer, How companies can become
‘razor sharp’ • Upsize How-to Audio: Podcast with Rick
Wall, Advice for getting customers to pay on time
CONSERVING
RESOURCES
Kowalski CEO says
growth is imperative
CASE
STUDY
“Our philosophy is to
expand when we’re
financially able,” says
Jim Kowalski, CEO of the
Kowalski’s grocery store chain in the
Twin Cities. They started when he and
his wife and business partner, Mary
Anne, purchased in June of 1983 their
first store, a Red Owl on Grand
Avenue in St. Paul. Jim had worked for
Red Owl for 20 years before then.
“I had to get an $80,000 unencumbered
loan to get financing. I had a
buddy with a creamery, that he sold
to Land O’Lakes. We took that,” Jim
says, to purchase and refurbish the
first store.
By 1985 two more stores became available
from Red Owl, and they took the
leap. “It was a big jump, but it was the
right thing to do. It was scary,” says
Mary Anne. The first store “was growing
in sales slowly, which is the best
way to grow, so I figured we can do
this again.”
The Kowalskis, eventually joined by
their daughter, Kris Kowalski Christiansen
who today is chief operating
officer, now have nine Kowalski’s
stores throughout the Twin Cities, plus
a production deli and production bakery,
including a flagship store and corporate
headquarters in Woodbury
that’s modeled after the architecture
they fell in love with when visiting Italy.
They bought and sold stores in the
early years of their business, and by
the mid-1990s decided to aim toward
the upper end of the market. “In 1995
we made the decision not to compete
against the price-cutters,” Jim says.
“You can’t give groceries away and survive
and that’s what they were doing.
At that point we took it in a whole different
direction.
It isn’t easy to predict what will happen
with each store, says Mary Anne.
“We’ve had stores that have just been
gangbusters. Grand Avenue was successful.
It was doing $8,000 a week;
all of a sudden it jumped to $17,000.
We opened here huge,” in Woodbury,
“then it backed off.”
In fall of 2008 the Kowalskis
announced they would add up to eight
wine and liquor stores adjacent to
their groceries, but with separate
entrances as state law requires.
“We have locations on our boards
right now,” Jim says about future
expansion plans. “We’ll do about a
store a year. You can’t sit still or you
get run over. You have to spread
costs.”
He pays close attention to cash, especially
because there are so many
competitors in the grocery business.
“Right now cash is king. Ideas are a
dime a dozen.”
What was Mary Anne’s response to
the idea, at the time? “It was short. It
was a good idea,” she says. “The confidence
I had in Jim was a major piece
of that.”
“The path we took was upscaling. The
only upscale grocery then was
Lunds/Byerlys, so in 1994 we put big
dollars into Grand Avenue and then
White Bear right after that,” he says.
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NOV08