The coming year will be similar to any other year for the team at Bomgaars, a farm and ranch supply store based in Sioux City, Iowa. But Dave Meyer, senior vice president at the company, explained very little changes year to year in this kind of business. “When the economy is booming, we don’t see much growth and in fact see some decreases in our profit margins because our customers opt for more expensive and fancier retailers,” he said. “But when times are tight, they rely on their neighborhood Bomgaars for the tools they need.”

The 48-store chain carries more than 35,000 products, including farm supplies, paint, lawn and garden supplies, hardware, work-wear, and foot-wear. The company also has a large animal feed and pet department and provides an array of services, including small-engine repair. In recent years, it’s taken steps toward becoming a local leader in recycling for its communities.

In 2009, the company saw a modest increase in profit margins and made a number of capital investments. In January of 2009, it opened a new store in Rock Valley, Iowa, and in April of that year opened a store in Estherville, Iowa. That summer, the company expanded its Mapleton, Iowa and Tekamah, Neb. locations both by nearly 60%. In October, the team relocated their current facility in Hawarden, Iowa to a new location. In the spring of 2010 the company will move its Spencer, Iowa location to a new, remodeled facility on the other end of town.

The secret behind Bomgaars’ success, Meyer said, is its emphasis on need-based inventory. The stores have tools and supplies available according to the season and even recent weather: during a severe winter, the company is able to offer expanded winter items such as snow blowers, ice melt, generators, snow shovels, winter work-wear, and more.

“We’re taking care of our friends and neighbors and, in some cases, our stores are the only source of winter goods in a community, so we don’t want to let our customers down,” said Meyer.

Torrey Wingert, vice president and CFO, explained that the company grows by opportunity. “We maintain a conservative financial plan so when an ideal location becomes available, we can move on it, but we don’t have goals to gain a certain number of new locations within a specific timeframe,” he said, adding that for 2010, the company will focus on expanding its current locations.

The big project for 2010 is the implementation of an internally developed software program that will link the company’s purchasing and accounts payable systems. With this addition, the company will be able to electronically send purchase orders and electronically receive invoices, which Wingert said will go a long way toward greater efficiency for the company.

Back in 2008, Bomgaars installed a new POS system as part of a string of other IT investments, improving customer service. Now, the company is focusing on the back end of operations to reduce cost and wasted time. Wingert said the system should be operational by the end of this year thanks to the hard work of the company’s internal software team.

Another key to Bomgaars’ success is its dedication to its employees. The company supports a Web-based training program that is updated regularly with information from the company’s vendors about new products in the stores. 

“The program is called Brainshark, and it has been hugely effective in training our store employees with up-to-date information on products we currently offer our customers,” said Pam Wine-brinner, vice president of HR. “We want to support them as much as possible when they are out there answering questions.”

Winebrinner added that company has long had an open-door philosophy regarding employee questions and concerns. “Our employees are not shy about picking up the phone and giving our offices a call if they have a problem or an idea they think will help us, and we embrace that aspect of our company culture,” she said.

To make the top executives at Bomgaars even more accessible, Winebrinner, Wingert, Meyer, and others on the team visit all the company’s stores every spring and fall. Winebrinner said the trip is primarily to thank employees for their hard work as the company gears up for the busiest seasons and to review company policies and procedures as necessary. This year, one of the topics was the proper disposal of broken or outdated equipment and chemicals.

Bomgaars recently expanded its recycling services with a full-service battery program that takes everything from car batteries to nine-volt. Last year, the company held a limited electronic equipment recycling program at its Sioux City store, corporate headquarters, and main warehouse. The company shipped a truck load of keyboards, monitors, and hard drives to be broken down, recycled, and responsibly disposed of.

“We’d love to expand this program and develop new ones to give our customers a safe, reliable resource for recycling,” said Winebrinner. “As the needs of our communities evolve, we’ll be right there with them.”

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