Next generation takes over leadership at J&L Harley-Davidson

For Jimmy Entenman, life in a family business began with his father’s reaction to his due date.

Aug. 30.

Not ideal.

“That’s Sturgis,” is how the family remembers father Jim Entenman responding.

“He knew he had to work,” Jimmy said. “I was born during a busy time of year.”

The annual Sturgis Motorcycle Rally is to J&L Harley-Davidson what Black Friday is to most retailers – a crush of business and a date circled on the calendar.

But they worked through balancing business and family 38 years ago, as oldest son Jimmy entered the world, eventually beginning an education in family business that would lead Jimmy and younger brother Joe — also born in August — to where they are today: taking over leadership of their Sioux Falls-based company.

“Everything we do revolves around this,” Jimmy said. “You can’t go home at night and shut it off. And you don’t want to.”

Growing up at J&L

Jim Entenman and his brother, Lonnie, opened their first store in 1975 in northwest Sioux Falls.

Jimmy remembers riding his bike around the store at 8 or 9, when he wasn’t pulling weeds or mopping the showroom floor.

“You were taught how to clean the bathroom, mop, sweep the shop,” he said. “We pulled a lot of weeds and picked up cigarette butts.”

When they turned 14, Jimmy and Joe would start helping out inside the store, and at 16, they started interacting with customers.

Joe had thought about going to medical school but decided to major in business at Augustana University instead. He never stopped working at J&L and was a full-time employee in the sales department his last two years in college.

After graduation, “I went back to the store and did parts and sold bikes and just kind of transitioned,” he said. “Being that it’s a family business, you get so emotionally wrapped up. I didn’t have to go through the process like Jimmy did of leaving and coming back and reapplying here.”

Jimmy took a different path. After graduating from the University of South Dakota, he worked for Mattress Firm in Atlanta. When he returned for the centennial anniversary of Harley-Davidson in 2003, “Joe was working and talking to all the customers, and I’d been gone two years and missed it,” he said.

“Something opened up, and my dad made me apply, and I moved back.”

He worked in sales and transitioned into motorcycle sales manager.

“We weren’t ever pushed this direction,” Jimmy said. “But when I moved back, it (assuming ownership) was always the long-range plan.”

Then, the Entenmans established a 10-year transition plan that would guide their business.

“I was really happy when they said they wanted to be in the business,” Jim said. “To me, there’s nothing that makes a guy feel better than having his kids want to follow in his footsteps.”

Transition planning

When they were in their mid-20s, the brothers joke, they naively thought there wouldn’t be that much to learn about running the family business.

“How hard can it be? The bikes sell themselves,” Jimmy said.

They both laugh.

“Right,” they said in unison.

With help from Harley-Davidson, Jim and Lonnie put together a 10-year ownership transition plan.

“It was very wise,” Joe said. “If it would have felt like a goal we were never going to attain, it would have gotten defeating.”

“We’ve seen it with other dealers,” Jimmy added.

“Where the old man can never commit to getting out,” Joe said, smiling. “And it really kills the enthusiasm of people who are trying.”

It took six months to develop the plan, Jim Entenman said. They all signed it.

“It was a team effort, from our bankers to our attorney and accountants, along with Harley-Davidson,” he said. “It just made sense. We had been in business over 30 years, and it made sense to transition to the next generation. They wanted to work in the business, and we were happy to be able to sell to them.”

But first, a lot of education took place, including integrating Jimmy and Joe into community causes and relationships that are important to J&L. They both have served on the board of Make-A-Wish South Dakota, for instance, which benefits from the annual Hot Harley Nights event in Sioux Falls.

“There was a need for them to understand the relationships we have in our community,” Jim said. “How to deal with our bankers. It’s not just about us. We have to have a great team, a great business attorney, a great accounting team, and they hadn’t developed those relationships.”

By 2013, Jimmy and Joe were ready to tackle a new challenge. Jim and Lonnie had hoped to acquire the Harley franchise in Fargo for years, and the boys went after it.

“We just went for a motorcycle ride one time, called the owner and asked him to go to lunch and asked for a tour,” Jimmy said. “We were at lunch and he said, ‘Do you guys want to buy me out?’ We said yeah. We were going to ask anyway. Strategically, Fargo makes a lot of sense, and we needed to be up there.”

Working through the acquisition and establishing their brand in the market provided another key learning experience. Joe is president of the Fargo store. Both brothers spend a lot of time there.

“It works really well,” Jimmy said. “When we went into it, we thought it would be awesome, we could ride our motorcycles. But we’re always driving a truck and pulling inventory.”

The deliberate approach to transitioning and ongoing success of the business led J&L Harley-Davidson to be named the winner of the Boyd Hopkins Sr. Excellence in Family Business Award from the Prairie Family Business Association.

“The Entenman family is such a strong model of succession planning. Very few family businesses take such a long-range and intentional approach, but we can certainly see the benefits for those that do invest in it,” said Stephanie Larscheid, the association’s executive director. “We were happy to honor J&L’s success.”

If J&L were doing the same transition today, it would look to Prairie Family as a resource, Jim Entenman said.

“I think the organization is fantastic. The resources they can bring and allowing the networking with family businesses is extremely valuable. We’re really happy to be part of it and are going to continue with it.”

The J&L 10-year plan also had some duties for Jim and Lonnie, including determining what their future involvement would be. A consultant worked with them a few times each year to keep the plan on track.

“The hardest thing for me was realizing in August that 10 years was up,” Jim said. “That was really difficult. We had the plan. I could have walked away from it, but we knew it had to get done.”

And Jimmy and Joe were ready, all agreed.

“it’s all about product, people and processes,” Joe explained.

“The product we knew. But with people, Jimmy and I had growing up to do. A lot of it was personal growth. And that was achieved through added responsibility. They gave us more to do and to be in charge of, and we had to grow as people. And the tough part with the older generation is they get established in what they do, so Jimmy and I had to figure out processes for us to adapt to the changing business environment.”

Future outlook

Earlier this year, Jimmy and Joe bought Lonnie’s share of the business. Jim and Lonnie still own the real estate, but the brothers eventually will buy it.

J&L has grown to 100 employees in the four decades since Jim and Lonnie started it as a two-person operation. There is a store in Watertown in addition to the Sioux Falls and Fargo locations.

Jim has taken on more of a mentorship role and has pulled back from being involved in daily operations.

“I act as a sounding board for both of them. If they get frustrated, they will come in and sit down and talk. They might not want me to even say anything but just bounce something off.”

The brothers also are tackling the same workforce challenges many in retail face. Additionally, their business requires technicians who can service bikes. In response, J&L supports scholarships and internships through Mitchell Technical Institute and offers internships.

“You read about the doom and gloom in retail, but I think things are still pretty good” Joe said. “Our focus has to be on serving our customers.”

They focus heavily on how staff members interact with guests, Jimmy added.

“We’ve changed our sales approach to be more servant-based selling. We’re here to help and guide.”

While they aspire to grow the business, the next few years will focus on debt reduction and profitability, Joe said.

“That’s the biggest fear when you transition. They’ve been doing it 42 years. You don’t want to take the reins and have it go south. We have long-term goals after that and want to grow when it makes sense in markets where we can best service our customers.”

The brothers said they are lucky they complement one another well. They share an office and agree that Joe is more of a “numbers guy” while Jimmy thrives on socializing with customers.

“We get along,” Jimmy said. “Like anybody, you can get upset, but we found if there’s something we disagree on, we have to talk about it right away or it eats at both of us. We’re both really similar but also different.”

Both are known to work hours on their computer after putting in 12-hour days at the store.

“But we both do it, so we avoid feeling like one is working more than the other,” Joe said. “We’re fortunate. The way we were raised, we’re not afraid to put in long hours and do a lot of work.”