Key West Marine Hardware is a family business through and through. Business owner Nick Formico says his grandfather opened the store in the 1960s and then raised Formico’s mother and uncle in the business, as well as himself. “I grew up in the store. I used to work here every Saturday. I put up products and priced inventory and whatnot.”
Formico went off to college in Tallahassee to study business. “My plan was not to come back to Key West but then my grandfather was suffering from Parkinson’s and couldn’t work anymore.”
At that point, his grandfather had already handed the store down to Fomico’s uncle and mother but was still placing orders for the store. “This was in 2010, and I had graduated with a degree in business management, so I took over his position of ordering.”
A few years later, Formico became vice president, working hand in hand with his uncle on day-to-day operations.
What came next? “In 2020, My uncle asked me if I’d be interested in taking over the business and I said yes.”
From employee to owner
To close on the business purchase – and move forward during the pandemic –Formico knew he had to get up to speed quickly on all facets of the business, including the financials. He also needed help with writing a business plan because he needed a commercial loan to buy the company. In 2021, he reached out to the Florida SBDC at FIU, the small business development center within the university’s College of Business that offers no-cost business consulting to small businesses in Monroe and Miami-Dade Counties.
Formico connected with Nancy Hull, an SBDC at FIU consultant and a specialist in specialist in growth acceleration, capital access assistance, cash flow and business management. “Nancy did an amazing job answering a lot of my questions and helped me with my business plan and figuring out the right path. I closed on the business in March.”
To acquire the business, he applied for an SBA 7(a) loan and “SBDC they helped me big time,” Formico says. In addition to one-on-one consulting, he attended a free class that SBDC at FIU held in the Florida Keys that offered an important refresher on his business school learnings a decade earlier. “Before I owned the store, I never really got into the financial side of it. I never got into the cash flow charts or anything like that. The SBDC, with the class and then Nancy, helped a lot with the business plan and the financial forecasting.”
Since buying the business, Formico has made some simple changes throughout the store, such as adding more signage and a drink cooler. He also improved the delivery service.
A big challenge for him has been finding employees and getting them trained. “In our business, there’s a lot to learn. We have over 21,000 skews in our company with over 150,000 individual items,” Formico says. The first five employees he hired got overwhelmed, but he’s happy with two recent hires.
How Key West Marine Hardware stands out from the competition
When explaining Marine Hardware to potential customers, “I tell them we have everything you need to build a boat except the boat itself,” says Formico. “We have everything from tackle to paints and fiberglass to tools to build a boat. We have all the electrical and the wires and connections and then plumbing and it’s so much more. Marine Hardware doesn’t sell motors or electronics but you know we can definitely hook you up with the people that do.”
Key West Marine Hardware has competition – West Marine, a national player – but Formico says Marine Hardware’s secret sauce is extensive product knowledge and friendly customer service.
“We’ve grown up in the store, we’ve grown up on boats, we know what everything does and how to use the products. So for example if you come in here we can we can show you how to use the different paints, what paint is best for what you’re doing, or the plumbing. Same with the tackle – we can teach you how to fish.”
Formico’s advice to other entrepreneurs? “Work hard, pay attention to your employees, and pay attention to your customers. Understand what everyone expects and needs and provide that for them.”
Still, working in or owning a family business – Formico’s worn both hats – comes with unique challenges.
“You have to be able to switch off your work and switch on your family time. While we’re here we try to keep it in work mode, and then come five o’clock we switch it to family mode and there’s a recognizable difference and it’s an understandable difference. And while it’s not always easy to differentiate the two, it is something that you have to do if you’re going to make it work.”
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ADVICE FOR SMALL BUSINESS OWNERS
Here is some advice from Florida SBDC at FIU consultant Nancy Hull:
- Very early on, set up your business with QuickBooks or another similar accounting system. Some entrepreneurs say “I know the business really well and the numbers aren’t hard.” But as the business grows, they lose sight of those numbers, and then at that point, transitioning to some kind of digital system is much more difficult.
- Seek assistance. Don’t beat yourself up if you don’t know all the answers – no one can. Seek help from Florida SBDC at FIU, particularly with the financials. But SBDC can also help with all aspects of your business, including marketing, HR, and operations. Also, so much information is available online these days. “Honestly, with a five-minute YouTube search, you can generally find some simple answers,” she says.
- If you own a family business, at some point you’ll be transitioning ownership, and make sure people can find the keys to the kingdom, so to speak. “They need to understand how systems are set up, what the passwords are, where things go, how things are done.” Make sure these details and all key processes are documented. “That way the new owner can focus from day one on improvements in efficiency and sales.”