Would you go to a town where you knew almost nobody just to purchase a business that had already failed twice?
You would if you were entrepreneurs Jay and Denise Hartz.
Prior to an initial trip in August 2013 to Perry, Iowa with plans to purchase the historic Hotel Pattee, the Hartzs literally knew a handful of people in town.
But after that initial visit, the couple had cultivated a grassroots group of community volunteers passionately dedicated to reclaiming the historic 40 room hotel built in 1913.
HOW DID THE BUSINESS GET STARTED?
Jay and Denise Hartz had visited the hotel once before in 2012 and had been interested in buying the business and turning it into a success way back then.
But the couple found the asking price of the current owner too high given the realistic potential for profitability and sustainability.
A year later, Jay got a call that the hotel would be closing and would be taken over by the bank. As soon as his wife had returned from grocery shopping, the two decided on the spot to make their move.
But financial challenges with the bank remained.
After presenting his business plan, attending town hall meetings and explaining his idea to reclaim the historic landmark via conference calls and webinars, Jay received 75 letters of intent from community members interested in investing in Hotel Pattee LLC.
The Hartzs bought the hotel in September with the help of local shareholders who now own 25 percent of the company and $395,000 borrowed from local residents to be paid back within five years.
WHAT IS THE BUSINESS KNOWN FOR?
Jay says he and his wife are the first owner operators the hotel has ever known.
As owners who also work at and manage the historic hotel, they have established a presence and made an investment in the community.
The Hartzs have worked hard to preserve the fabric, artwork and history of the hotel while operating it as a large bed and breakfast. They are very hands on operators and customers are used to seeing them on the premises.
WHAT’S THE BIGGEST RISK YOU EVER TOOK IN THE BUSINESS?
The greatest risk was definitely buying a hotel that had closed twice before, for various reasons, says Jay. With a major metropolitan center — DesMoines — just 35 miles away, the hotel has had to work hard to promote itself as a destination in and of itself.
HAVE YOU EVER ALMOST GONE OUT OF BUSINESS?
“Of course,” says Jay. Cash flow remains a constant challenge, but he says fear is a good motivator. Cash reserves are improving, Jay insists, and the couple is confident of long term sustainability.
IF YOU HAD IT ALL TO DO OVER AGAIN, WHAT WOULD YOU DO DIFFERENTLY?
During the few months the hotel was closed for renovation before finally opening to the public, Jay says he would have spent more on marketing and promotion. He admits that even some physical upgrades that seemed important at the time would have taken a back seat to getting the word out.
TELL US ONE INTERESTING TIDBIT ABOUT THE HOTEL:
“Being in the hospitality business, it is our motto that if our team doesn’t have fun, then our guest’s won’t either. We have crazy fun behind the scenes! Laughing, joking and simply being silly behind the scenes. Some of that naturally rolls into the front of the house.”
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