Jeff and Shellie McDermott’s helicopter services provide power-line patrol, firefighting, and aerial mapping for customers. Acquiring Brainerd Helicopter Service in 2016 increased their territory to include eastern Minnesota as well as Wisconsin. But with growth comes complexity. Kevin Kaufman, Director of the Small Business Development Center at UW-Whitewater, was there to help.
Jeff and Shellie’s adventure in aerial entrepreneurship started with the purchase of Chemair Helicopters in Green Bay in 2004. Shellie’s background in office administration and Jeff’s experience and expertise as a pilot and mechanic made the move possible. “When we started, it was just Jeff and a helicopter,” Shellie recalled. The duo gradually built the business to a fleet of six, with six employees. Growth led to son Craig joining the firm in 2014 and daughter Cassie in 2016. Shellie credits their company’s steady growth to client retention. “We market ourselves based on our experience and our safety,” she said.
SBDC helps manage complexity
In 2016 Jeff and Shellie had an opportunity to purchase Brainerd Helicopter Service, with locations in Brainerd and South St. Paul, Minnesota. “That’s where the SBDC came in,” Shellie said. “It was such a huge venture for a helicopter pilot and his wife—six aircraft, two hangars, six full-time employees with an additional ten seasonal employees!”
Kevin brought deep experience as a commercial lender to the table when he sat down with the McDermotts to help them prepare. “It was a relatively large transaction—they needed a sounding board,” he recalled. Jeff appreciated Kevin’s expertise. “Our business is somewhat unique, and a lot of ‘cookie cutter’ templates do not fit,” he observed.
“He got me going on all the paperwork,” Shellie said. “Stock certificates, internet and phone agreements—things I would not have thought of.” When the attorneys and accountants requested documents, she was ready. Kevin said, “I was able to help them shape a more advantageous purchase that worked for the seller as well.”
The Brainerd purchase required merging the culture of two companies. Kevin helped the McDermotts manage that shift. “It was a smooth transition, thanks to Kevin,” Shellie said. “He brought to the table things we hadn’t thought about for a successful operation.” Now, Jeff keeps the two companies working together on the operations side, while Shellie manages the accounting. “Jeff is a fantastic pilot, and has a great intuitive sense of the business,” Kevin observed.
Structuring a company across state lines
By purchasing Brainerd Helicopter Service, Chemair gained access to new markets. But “structuring a company across state lines in the highly regulated aviation industry was very complex,” Kevin said. The McDermotts worked with a lawyer experienced in aviation law, but “it did affect the structure, both on the flying and maintenance sides,” he said. “You had to do things differently than you would in almost any other kind of business.”
“Kevin had well-rounded business advice for us,” Shellie said.
Accomplishments with the SBDC of UW-Whitewater
- Successful purchase of a business
- Smooth transition
- Sound advice for growth
Building long-term client relationships
Every few years, Chemair invests in hosting a safety seminar for the utility companies who fly with them, bringing in a world-class speaker. Attendance has far outstripped original expectations. The events cement long-term relationships in their specialized aviation industry.
Kevin continues to consult with the McDermotts. “We’re working on succession planning, on a business dashboard, and on identifying markets ripe for growth that fit their core competencies,” he said. “What are profitable customers that fit well with you? How do you find more like them?”
Shellie said, “Kevin has given us sound advice for growth, for income, and for investment protection.” Jeff agreed: “We continue to use Kevin to discuss expansion, and plan to use him in the future for advice with marketing, human resources, small business certifications, and succession planning.”