Kurt Radermacher, the third-generation owner, president and CEO of Pump and Meter Service, says his father and uncle worked hard to put a transition place that would give the company a greater chance of success as it changed hands to the third generation. Radermacher says he spent a lot of time networking with other family businesses and non-family businesses on what to do and what not to do.

"But honestly, we didn't really know what we were doing because we didn't have a lot of time to figure it all out," Radermacher told attendees at this year's Minneapolis Smart Business Dealmakers Conference.

As the youngest of four in his family, he was ultimately the only one who joined the company. Having been there since he was five years old, doing random chores around the shop, it became clear to him as he got older that he was going to continue the legacy of the family business. In 2013, he took over the day-to-day of the company having bought out his uncle out at that point. He was 26 years old at the time, and soon after his father got very sick. That's when things changed.

"We realized that the 20-year transition plan that we had in place, we needed to do it in five," Radermacher says. "I'm here, so we did it. It was a wild ride. The first three or four years were definitely a learning curve, but that was my upbringing in the business."

The company's success, he says, has stemmed from an incredible market and the persistent growth of gas stations. But, he says, they also had an incredible team. Though it took a while, the management team his dad had accepted him, and they helped contribute to the success of the company after the transition. The other factor was hard work.

"I was doing everything I could to make sure that I wasn't going to be part of that statistic [that very few companies succeed after a transition to the third generation] and that this company could live on and possibly be my son's one day. He's six. So, I'm starting to realize exactly how stressful it probably was for my dad to turn over this business to me because all I think about is what do I have to do to get this set up so that my son can't screw this up," he says. "And I'm assuming that's what my dad was doing as well."

There are often surprises for new owners when taking over a business. Radermacher says the company made several acquisitions in the past five years and his biggest mistake was the first one.

"I walked in, and I told everybody that nothing was going to change," Radermacher says. "It was the worst sentence that could have ever stated to these people because in my mind, what I meant was, we're still going to be working for the same customers, we're still going to be doing the same type of work, that's not going to change. But of course, the day they get paid was going to change, the software they used was going to change, they have a new payroll company, there's a new 401(k). So, in their world, everything changed. I'll never say that again, walking into a company that we're going to bring on board."

In his industry, the petroleum equipment industry, there's been a lot of consolidation through M&A as the business has been booming. There's also been mergers and the consolidation of his company's customers — gas station owners, and large station operations, and many of the small independent operators.

"We're starting to realize that we have 26 customers essentially with 10,000 sites," he says. "It's just a different dynamic from 20 years ago where I used to have 10,000 different operators and different customers."

As his colleagues have been starting to sell during the past five years, seemingly none of them, mostly family businesses, have succession plans in place.

"There's always just dad that was running it or mom that was running it and they forget to figure out that next piece and then all of a sudden, they're 72 years old and the company doesn't have anywhere to go," he says.

Many of the acquisitions that are happening are though private equity. Given that landscape, he and his business partner had three decisions: sell, which he says wasn't really on the table; not doing anything at all and essentially becoming irrelevant in the next decade as the larger companies come in; or do a legal partnership merger with a holding company. Doing the latter, he says, gave them better buying power, more resources in part through improved collaboration, and more that's yet to be realized.

"We're still learning how to use this new partnership that we have. But our decision was to not sell and try to grow on our own together, put our capital together and make educated acquisitions and investments in the future," Radermacher says. "So, our company, Lakeshore Family Partners, has been looking at not only businesses that are in our industry, but complementary to our industry. So, anything really related with construction, whether it be excavation, concrete, you name it."

Another big piece of what he and his partner have been working on over the past year is trying to align their principles to be on the same page and then get that message out to their employees.

"This company started out at such a small level that I don't know that there was any philosophies or principles that this company was even following," he says. "And so, throughout my progress of building this company up, I've been trying to put all those together, and I'm not even sure I'm done doing that and I don't know if you're ever done doing that. You just continue to evolve and adapt with what's happening within your business. Integrity, in my world, is incredibly important for our business, because we're dealing with hazardous liquid underground that can be incredibly pollutant and ruin cities. So, everything that my guys do has to be on the utmost integrity so we don't have catastrophic failures. But I think it's an ongoing process for me in learning and adapting with our philosophies and principles."