American Dream Achieved
IBA, as an approximately fifty-year old business brokerage firm serving the entrepreneurial community of the Pacific Northwest, has been uniquely positioned since before the American Bicentennial celebration of 1976 to witness and hear the stories of thousands of people who have lived the American dream through entrepreneurship creating beloved businesses by employees, customers, and communities while finding personal fulfillment and financial prosperity through execution of their ideas, hard work, perseverance, and ability. In an effort to share these stories heard throughout the years by our team of business brokers, who are commonly regarded as the “best listeners” in the M&A industry, IBA has retained highly regarded writer, Nesha Ruther, to tell their stories. It is our goal to share one story a month. It is our hope that you will find the stories as inspirational and motivational as they are to us and the buyers who bought the businesses in IBA facilitated transactions in Washington, Oregon, and Alaska.
The Story of Tim Richards (Northwest Supply)
By Nesha Ruther
Tim Richards began his entrepreneurial career in an unconventional place, the church. For much of his adult life, Tim had been a pastor. And while at the time he left the church, in many ways his entrepreneurial journey is what led him back to his faith.
“I went through a massive crisis of faith,” Tim says. “I came out of the ministry because I decided I needed to get that stuff sorted without my paycheck being attached to it. Business allowed me the time to do that.”
Tim had learned his entrepreneurial instincts from his father, who did everything from owning stores and restaurants to selling real estate, to building houses. “He loved getting businesses that weren’t doing well, and then building them up until they were going, and he wanted to do something else. He just liked that building-it-up thing,” Tim says of his father.
Seeing his father explore different businesses showed young Tim that working for himself was feasible. “When I was trying to decide what to do next, I knew I didn’t want to just punch the clock for somebody else,” he says.
His first entrepreneurial venture started off as an accident. While still in the ministry, he had burned up a weed eater by mixing in the wrong ratio of 2-cycle fuel. “I decided there had to be a better way, so I started working on an idea and created a little tool called The MixMizer®.”
The MixMizer® is a device that helps users mix small amounts of 2-cycle fuel. The product was eventually picked up by a major distributor and has sold over 2.6 million units through major box stores like Walmart, AutoZone and Pep Boys, to name a few. That experience gave Tim the confidence to succeed on his own.
Tim started NorthWest Supply, Inc. by working with an organization that was supposed to help individuals source & sell surplus inventories. Unfortunately, Tim quickly discovered the organization wasn’t much help. “I realized they didn’t really know what they were doing,” he says. “But they did alert me to the fact that there’s always someone selling something in the secondary market, whether it’s surplus tomato soup or surplus Boeing 707s. You just have to identify your niche”
For the uninitiated, the secondary market refers to anything being sold secondhand. It can include any item that is pre-owned, refurbished or remanufactured.
Tim saw opportunity in the secondary market and set out to find his niche. He knew he had to do market research but didn’t have the income to support it. He turned to old reliable, the Yellow Pages. “I sat down one day with the Yellow Pages and counted advertisements. I figured whatever market segment had the most advertisements was probably the biggest segment in our area. Most of the ads were for contractors, restaurants, and doctors. Contractors and restaurants seemed like boom or bust businesses, but doctors seemed pretty stable.”
Like anything else, medical equipment is often sold secondhand. This could be because a doctor is retiring, equipment is being upgraded, a hospital has closed, or items have been refurbished and are ready to be sold again.
“I started off as a broker. For the first ten years I went into doctor’s offices and hospitals asking, ‘Is there anything equipment-wise you are looking to buy or sell?’” he says. From those small beginnings, NorthWest Supply, Inc. was born.
When Tim first began the business, the Internet was still far on the horizon. Showing photos to clients and other dealers required a Polaroid camera and the U.S. Postal Service.
With the rise of the Internet, Tim realized the role of broker was diminishing. Nobody needed an individual to find equipment when a quick Google search could do it for them. “Now, anybody with a search engine could do what I did,” Tim says.
About time this marketplace change was occurring, an opportunity arose for him to buy out another company with a slightly different business model. “They were doing consignment contracts with hospitals where they would both warehouse and market their surplus equipment. Once sold they would receive a percentage of the profits.”
With the acquisition of the other company, Tim’s business grew overnight. “I went from being a solo entrepreneur with a secretary to suddenly having a warehouse, crew and new business partner,” Tim says, with a degree of awe. That enterprise would form the bedrock of Tim’s career for the next 15 years.
One challenge Tim faced early on was discovering the company he acquired did not have the infrastructure in place to support its business strategy. “They were trying to manage hundreds of consigned items using clipboards and Excel spreadsheets. It was way too complicated for that,” Tim says.
Thankfully, Tim had a background in database development and was able to design an entirely new system for the company to use. “That was a lot of what made the company succeed,” he says. “We created our application from the ground up to manage all this [inventory] and then interfaced it to our website. That was a big deal. Anything we logged into the warehouse was automatically posted on our website. Anything we sold automatically came off the website. At the time nobody was doing that.”
It would have been impressive had Tim built this system prior to buying the business, but it was even more so given the fact that he did so while dealing with all the mundane daily activities of keeping the company running. “It was kind of like driving a racecar and rebuilding the engine at the same time,” he says.
One impressive aspect of this system was that it allowed for remote work more than a decade before working from home was popular, however certain aspects of the job still required physical presence. “There were a lot of hours,” Tim says. “When we were setting up the warehouse, which was about two hours away from where I live, that I was driving over there multiple times a week. I decided one day I was going to stay at the warehouse overnight to keep working.”
While the warehouse did not have any beds, it did have the medical equivalent. Tim spent the night asleep on a gurney, using a surgical microscope for a reading light. “I have to say, it’s a very weird experience to sleep by yourself in an empty warehouse on a gurney,” he says laughing.
Creating an entirely new system was one example of Tim’s ability to organize and build structure, critical skills for a business owner. “There’s a lot of envisioning what you need your systems to do and how it all needs to tie together,” Tim says of owning a business.
His background in the ministry also came with strong people skills, which came in handy when presenting to clients.
Like any entrepreneur, he experienced growing pains. Tim had a master’s degree in theology but very little medical equipment or business knowledge in his background. He had to learn not only the technical details of his market but also the more general practices of running a business. “I had never dealt with accounts receivables, purchase orders, and shipping,” he says. “There was a lot of learning for me in how to manage a business.”
In the early days of Tim’s entrepreneurial career, when he was still working on his own, he didn’t have the money to seriously invest in advertising. Instead, he built his client database through cold calling and visiting doctors’ offices. “In the first year I was always late to the dance,” he says. “I would talk to a doctor, and he’d say, ‘It’s too bad you weren’t here three months ago when we were setting up our new office.’ I spent days going around a town, finding where the medical area was, and passing my card out to people. I did Internet searches even when there wasn’t much Internet to search, looking for facilities and sending them my contact information.”
This effort eventually paid off. “It’s all about filling the pipeline. You keep at it. You keep making contacts, and eventually, the day comes when people say, ‘You know, in six months we’re planning on doing something,’ and finally you’re on the right side of the sales equation,” Tim says.
Even in the later days of the business, most of the company’s success came from word of mouth. People came to know and trust Tim, and they would come to him instead of the other way around. This is one of the benefits of working in such a specific niche; yes, the pool of potential clients is smaller, but the relationships formed run deep.
One way Tim distinguished Northwest Supply, Inc from competitors was by offering something nobody else was doing: equipment appraisals. With many physicians choosing to retire or selling their practices to larger hospital networks, providing asset appraisals became a great addition to the business.
Capitalizing on the burgeoning internet market and the power of it database system, Northwest Supply, Inc. was able to advertise its products extensively on e-commerce sites specific to the medical world. “That became a major contact point for us. The fact we had current, comprehensive listings was a real positive,” Tim says.
Tim also prioritized his clients and wanted to ensure they always felt supported. “One thing that was really important to me was good communication with clients,” he says. “I always believe if someone sends me an email, they should get a response the same day. If I could respond in the same hour, I would. I think it’s really important that even if you have nothing to tell the person, you acknowledge they contacted you.”
While all businesses face fires that need putting out, Tim believed strongly in being proactive when such issues emerge. “I always told the staff, if there is a problem, call the customer and tell them before they have to call you. If you wait until the customer calls you, they have already created a narrative in their mind about what they think is going on. No one wants to get bad news, but at least if you step up and take initiative, they know they can trust you and that you’re working on the problem.”
Tim’s core values were not just pretty words hung on a wall to gather dust, but the very real principles by which he ran his business. “Communicating that commitment can be frustrating. You can advertise, ‘We’re honest.’ but it doesn’t mean much to say. No one has ever advertised ‘We’re dishonest’ A commitment to honesty was true for us. We really did want to treat people right, but it takes more than words to build a reputation,” he says.
Tim learned firsthand that not everyone shared his commitment to integrity. Once he purchased a piece of equipment for a client; not only did the dealer never send it, but they stopped answering the phone, took the money and ran. That occurred in the early days of Tim’s business when cash was tight. He re-purchased the equipment from another dealer 100% out of pocket, to ensure his customer was taken care of. “Those are the things you have to do if you want to build a good reputation. I’ve always said reputation lasts longer than money. You can do things that in the moment make money, but if you trash your reputation, that’s hard to recover and will cost you in the long run.”
Another, less technical aspect of Tim’s success was simply that he had no other option. He left the ministry without a backup plan but had a family to support. “I was married, had three little kids, and was basically starting from scratch. We moved out of California during a slump in the California housing market. I have the distinction of being one of the few people to lose money in the California housing market,” Tim says laughing.
It took a year for him and his family to sell their home. During that time, they lived in a 750-square-foot cabin with primitive plumbing. “There was only cold water,” he says. “You had to carry out the toilet three times a week.”
In his second year of business, Tim doubled his revenue. He doubled it again in his third and fourth years. By the fifth year of working as a solo entrepreneur, he had reached stable and steady growth, enough so that when the opportunity arose, he was ready for the expansion. Nothing allows for success like an inability to fail.
“Northwest Supply might not have made me rich by a lot of people’s standards, but it took good care of our family. We raised four kids. My wife didn’t have to work if she didn’t want to. It got everybody through college. It was a good job, and I very much enjoyed it.”
For Tim, his business was never a means of achieving massive wealth, but a way to provide for his family. Equally important to the health of the business was the health of his personal life. “I enjoyed the business. I wanted it to do well, but it wasn’t the only thing my life was about,” he says. “I was a dad and a husband, I was involved in my church, all those things mattered to me, and I wanted time for that.”
Some opportunities presented themselves for Tim and his business partner, Ron de Ru, to continue to expand the business, but they were cognizant to weigh it against the time they could spend on their personal lives. “Could we have opened a branch in some other state? Yeah, we could have. But we would have been traveling all the time and the business would have been all-consuming. I think [Ron and I] made the right choice to draw boundaries and say, ‘NWS is part of our lives, but it’s not all of our lives. Jesus once asked, ‘What does it profit a man to gain the whole world and lose his soul?’ I think about those words often,” Tim says.
While Tim often worked from home, he always made sure to separate work life from family life. “I tried to keep a pretty bright line between my work and my family life. When I left the office and stepped out of that room, I was home. My family wasn’t embroiled in everything on the other side of that door. There were a lot of hours I put into the business, but it wasn’t everything to me.”
This diligence not only benefited Tim’s personal life but his professional life. Many entrepreneurs can become so invested in the success of their company; they forget they set the tone for the entire company. There is no healthy business without a healthy business owner. “Seeking balance was good for my customers and employees because they got a healthier me to deal with. If you become totally consumed with the business, it becomes this kind of manic obsession, and sometimes you can chew up customers and employees in the process,” Tim says.
While Tim greatly enjoyed his business, his first love was being a pastor. Northwest Supply was not his dream job, but the job that allowed him to achieve his dream. “I went through a crisis of faith, but the business gave me room to work through that, do my own reading and thinking and researching,” Tim says.
For a while, Tim remained involved in lay ministry, where he taught and spoke within the church on a volunteer basis. When the lead pastor at his church retired, many members of his congregation came to Tim asking if he would apply. “I thought when the time was right, God would make it clear, and it just seemed like He was really making it clear.
Seven years ago, Tim returned to ministry, leaving much of the daily business management to his partner, Ron. “At that point the business was able to function fine without me,” he says. “There were still things I was doing but it was minimal. Eventually I knew the time had come when NWS needed to have a fresh vision. It’s not good for any business to have the principal owner absent. At that point, I said, ‘I think it’s time for me to move on.’”
Tim began looking for business brokers in the Seattle area. IBA stood out as having a repertoire of other medical-related companies they had sold. Tim & Ron took their time, and two years later sold the business through IBA. “The sales rep we worked with, Andrea, had experience in the medical field. She understood a lot of what we were doing as far as the equipment. She was also a good sales rep. Very upbeat, good people person, good at helping walk us through the process,” Tim says.
Tim recommends that any entrepreneur looking to sell their business first and foremost get the details of their business in order. “The problem for a lot of small businesses is that it lives between the owner’s ears. They’ve never written it down. They’ve never put their systems in place. When you sell a business, you’re not selling your brain, you’re selling the system,” he says.
As far as selecting a broker, Tim suggests someone who can give an honest valuation and is on the same page as you. “It can be really challenging to say, ‘What is my business worth?’ I know what I want it to be worth, but is that really its value? IBA was really good in that way, they provided a valuation and showed us three or four different ways to come up with a value,” Tim says.
Since selling Northwest Supply, Tim has been able to focus more fully on his career as a pastor and enjoys spending time with his friends and family, which has recently expanded to include grandkids! In his free time, Tim enjoys woodworking, photography, hiking, and kayaking. He recently took a month-long sabbatical in Italy.
For Tim Richards, his American Dream began as a nightmare. “I had gone through a tremendous personal crisis that had taken me out of a career I loved.” Tim says. “My goal was not to build a business but to feed my family. My dream was to do what I needed as a dad to provide for my family.”
Northwest Supply, Inc. fiscally provided for Tim and his family, and supported him through a time of personal vulnerability and discovery. It also provided him with experience and insight to thrive again as a pastor. Many members of Tim’s congregation are entrepreneurs themselves. Tim finds he can connect with them in unique ways many pastors can’t because he knows the challenges and triumphs of owning a business.
“The business has been really good in terms of preparing me for stepping back into being a pastor. A lot of the guys I minister to, they’re living in business, and sometimes they see pastors as guys who don’t get what they do. They recognize I understand what they do,” Tim says. “Also, even in the church, business skills are needed. I have staff, I have budgets. My business experience has given me skills and a background that’s helpful in what I do now.”
“So, did I achieve the American Dream? If the American dream is being rich and living on a tropical island? No, but for me [The American Dream] has been what it’s allowed me to do as a dad and as a husband, providing for my family and caring for other people. For that, I’m grateful.”
Nesha Ruther is a writer and editor from Takoma Park, Maryland. She received her BA in English Creative Writing from the University of Wisconsin Madison, where she received a full tuition scholarship through the First Wave program based on academic and creative merits. She was a 2016 Young Arts winner in spoken word, a 2016 winner of the DC Commission of the Arts Larry Neal Writing Award, a 2017 winner of the Mochila Review Writing Award, which was judged by Nikki Giovanni, a 2020 winner of the University of Wisconsin’s Eudora Welty Fiction Thesis Award, and a 2022 Tin House Winter Workshop Participant. She has been commissioned to write and perform for the National Education Association, and has had work published in NarrativeNortheast, Angles Literary Magazine, Beltway Quarterly and more. She currently lives in Cincinnati Ohio and is the Lead Manuscript Developer at Holon Publishing and Collective Press.