August 2003: Volume 45, Number 8
Where Business is Naturally Good--Nature`s Sparkle Water Conditioning, of Goodland, Kan.
by Ronald Y. Pérez, WC&P Managing Editor
Quotable: 'I've always been in construction and did any type. A friend of mine was in the water business, and I was interested in it because we used reverse osmosis for 10 years prior to that, and always considered good water something we wanted. With my friend in the business for 30 years—he moved to our area from Hastings, Neb.— he became my supplier when we had a storefront business for about three years before we moved out here. Just from talking to him, it sounded interesting and we have bad water in this part of the country.” —Daniel J. Lucas
Running a water treatment business in a farming community provides quite a paradox for Daniel Lucas. For many of the 5,000 residents of Goodland, Kan., farming is the lifeblood of the local economy and puts food on the table, both literally and figuratively. Also, without a good economy, the townspeople aren't as preoccupied with the quality of their drinking water.
Of course, when the farming business is taking off 'as it has this year after a four-year slump'this presents other problems for water treatment dealers like Lucas' Nature's Sparkle Water Conditioning which is held indirectly responsible for customers' water. What problems? Increased farming translates into more irrigation, which means more chemicals being soaked into the groundwater that inevitably seeps into water wells—a major source of drinking water for the Goodland populace.
Lucas, 42, recognizes this and handles it with aplomb: 'We're all under one aquifer. It takes several years for the water to get down to the aquifer—but, for contaminants, it can take 15 to 20 years. They have had chemical irrigation going on for the last 25 years, and everywhere here the chemical/nitrate levels are going up. Even if they stopped irrigating today, the levels would still go up for years. A lot of towns are now having to deal with high nitrate levels.'
Fueling the economy
Recognizing the nature of the beast, Lucas accepts the circumstances. He explains, 'Farming is what goes on out here. We also live in the part of the state that is pretty dry. As far as using chemicals, it's the only way that these guys (farmers) can stay in business, so they're not going to stop using chemicals. It's polluting the water and they understand that.' Legislation is being discussed on how to better protect the aquifer.
As soon as he moved to Goodland from New York City'another glaring paradox'in 1992, Lucas knew right away something was different about the local water. 'It seemed like when we moved out here there was an above-average amount of sickness including cancer rates,' he says. 'Whether that's true or not, it seemed that way to me. From that point on, we decided not to drink the (untreated) water out here.'
Combating the problem
Apparently, many others in Goodland—population: 4,948 (2000)—are in agreement with Lucas. For the majority of residents, he says, they have either some type of water filtration installed in the house or bottled water delivered to their homes. For Lucas, he began drinking reverse osmosis (RO) water even before thinking about moving to Goodland. Prior to living in New York City, he made his home in Denver, which is about 200 miles west of Goodland and, thus, is the nearest big city.
Not surprisingly, RO is the fastest growing segment of his business, Lucas says. Other water treatment equipment supplied by his business includes softeners, iron filters, sulfur filters, chlorination and ultraviolet. With 85 percent of the business tied up in the residential market, Lucas says it revolves around “selling and maintaining equipment.” His commercial accounts consist of restaurants, hotels and schools.
Against the grain He does have a few rental accounts, but he disagrees with the general perception among dealers that rentals are absolutely necessary for steady income when other aspects of the business may not be doing so well. 'I have found that ROs with their filter changes and service calls serve as regular income,' he concludes. 'There are just not enough people here for rentals to work. Besides, farmers would rather buy than rent in Goodland. There's less hassle this way. That's why we are able to stay independent while keeping our prices low because people are willing to pay for service.”
Since he began the business in 1995, Wood Bros. has provided Lucas with much of his equipment for his 480 customer accounts. As an independent dealer, he also has working relationships with Charger and Good Water Warehouse. 'Living in the farm country, there are nitrates in the water,' he says. In fact, the city suffered three nitrate violations in 1995 alone, and yet no one was able to find the cause. In addition to nitrates, irrigation chemicals, hardness, iron or iron bacteria, sulfur, and coliforms are encountered by Lucas. In many instances, he'll install an RO and water softener, or a chlorination system for sulfur situations.
According to Lucas, he has always been self-employed (mostly construction jobs such as remodeling homes). This unquestionably made the transition easier to the water treatment industry. Three years ago, when both the business and farming community were really taking off, Nature's Sparkle had five on staff—three salespeople, one service technician, and an installer. Currently, it's down to Lucas and his wife, Debbi. She is in charge of the bookkeeping while he's a one-man band responsible for installation, service, technical issues and sales.
For the most part, Lucas sees the spousal working relationship as a positive one. They've worked together since the business’ opening. He says, “We work well together; we kind of bounce ideas off each other. The only downside to it would be the business becomes a topic of conversation more than you would like it to be. We ran the business out of the house for three years, (but) we each have our own office. When you're at home, you're also at the office.” The business occupies a space of a 2-½-car garage as well as a 15' × 15' workshop. (The name of the business was decided by both Lucas and his wife who wanted a name that described water, “sparkle,” and where water comes from, “nature”).
‘Middle of nowhere’
This arrangement works well in a town such as Goodland where pressing the flesh becomes more imperative than it would in a city like Denver. At the outset, Lucas realized this and formulated his business around that concept. 'We are in the middle of nowhere,' Lucas says matter-of-factly. 'We knew from the very beginning that we would not be able to rely on Goodland to keep us in business or make or break us. We really focused on other areas as well, but name recognition is everything in a small town. After several years, we have that.
'“At the outset,' he said, 'customers said 'We already have a dealership in town; why do we need another one?' But for those people out of town, it's never been an issue. We do a lot of fairs and home shows where we're meeting people. That got us going and has kept us in business. People in Denver, for instance, are just looking for price. But living in the country, it's still a big thing to be seen by people.' Careful not to jeopardize his personal contact with customers, Lucas has been hesitant to rely on setting up an email account or a website. Instead, promoting his business is relegated to the yellow pages, newspaper inserts, mailings and home shows.
Understanding his market demographics has kept Lucas in business through thick and thin. Goodland has two water treatment dealerships—Nature's Sparkle and Culligan. Learning to sell to his public has been one of Lucas' strong points. 'In general, price is not all that much of a factor,' says Lucas, who became a Water Quality Association member last year. 'Competition does not factor into it with us. We set our prices with other dealers in the area (in and outside of Goodland). One difference is that we use a financing company to deal with customers who need it.'
Whereas Culligan has a virtual monopoly on bottled water in Goodland and serves specific counties, Lucas concentrates on small and growing towns to the east (30 miles) of Denver for additional income flux. Plus, he doesn't intend to challenge Culligan on the bottled water front: “Bottled water is a big thing in Goodland. It's just not a good, wise, money-making decision for me to get into that because there is no population base.”
One might think that Lucas would never even think of becoming part of a franchise, but that's not necessarily the case. 'We've looked at getting on with somebody else,' Lucas says. 'For now, we are going to stay the way we are.' Though he isn't sure that it would occur, he says it feels good “not having someone breathing over me and saying 'Why aren't you selling more?' Being in charge, I can pick what I feel is the highest-quality equipment. Still, having (equipment) brochures and financing programs would be a plus, but Wood Bros. has been a great help with its equipment.”
Franchise or not, Lucas sees mostly positive things for his business in the future. Of course, this is all predicated on the local economy, i.e., the farming community. In the meantime, it's a wait-and-see game. “When the economy gets back, we will hire more,” he says. “Fortunately for us, we got a good enough start before the economy went bad here. Farming goes through cycles, though this is a longer one. It will take two or three years before they get back to spending.
Unfortunately, Lucas doesn’t see the plight of the traditional mom-and-pop operation as encouraging as he does his own. This may ultimately play a part in Nature's Sparkle coming under the guise of a bigger company. He explains, “In other parts of the country, mom-and-pops will suffer in not only water treatment but other segments of commerce. Contraction is an issue and that’s why we may have to join up with somebody just to have a ‘name.’”
For now, the name of Nature's Sparkle speaks for itself and the Lucases intend on rebounding in a big way along with the resilient farmers of Goodland. Business will continue to grow, albeit slowly, and they expect to expand in two years.
Nature's Sparkle Water Conditioning
1002 Antelope Drive
Goodland, KS 67735
(785) 899-3939 (tel/fax)
Owner and president: Daniel J. Lucas, CWS-I, CI
Founded: November 1995
Sales: 5 percent increase in 2002 over 2001; 2003 is expected to be a 10 percent increase over last year