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Spotlight: Chuck Surack of Sweetwater Sound Launched an $800M Retail Operation From His Home Studio

Chuck Surack sweetwater sound
Courtesy of Sweetwater Sound

Sweetwater Sound founder and CEO Chuck Surack

"We develop relationships with our end users."

Chuck Surack’s life was forever changed by the Kurzweil 250 synthesizer.

Before the groundbreaking instrument was introduced in 1984, the founder and CEO of Sweetwater Sound -- currently the largest online retailer of musical instruments and pro audio in the U.S. -- had been running a recording studio out of the garage of his 1,000-square-feet house in Fort Wayne, Indiana. (It was an upgrade from the 1966 Volkswagen Bus he worked out of previously.) But a fateful trip to a friend’s music store in Chicago started him on a new path.

There, Surack was introduced to a prototype of the Kurzweil 250 -- the first synthesizer that was capable of playing digital recordings of other instruments.

“I thought, ‘How cool would that be if I had one of those in my own studio?’” Surack says. So, he bought one.

At his home studio, the tech-minded Surack became intensely focused on the synthesizer, designing more sounds and writing computer software for the instrument. Before long, he had earned a reputation as one of the world’s foremost Kurzweil 250 experts, a distinction that earned him famous friends including Stevie Wonder, Bob James, Lyle Mays and Kenny Rogers -- all Kurzweil 250 owners who reached out to get the latest sounds he had developed.

Surack eventually became a Kurzweil 250 dealer and expanded his business over the 1980s to other product categories, including music software and recording equipment. By 1990, the business had grown so much that he moved it out of his home and into a 5,000-square-feet commercial building with five employees. The following year, he relocated to a building that was twice the size, with quadruple the number of personnel.

Today, Sweetwater Sound employs 1,800 workers and operates out of a nearly 1 million-square-feet complex in Fort Wayne, selling products ranging from musical instruments (guitars are Sweetwater’s best-selling category, comprising roughly 30% of its sales) to microphones to DJ mixers to DAW software. Surack has also purchased a variety of other local businesses – Longe Optical eyeglass stores, charter services Sweet Aviation and Sweet Helicopters, and car dealership Sweet Cars, among others – that employ an additional 400 people, making Sweetwater one of the largest private employers in Fort Wayne.

So far, at least, Surack hasn’t had to lay off any workers during the coronavirus pandemic, though the business is dealing with backlogged orders after initially sending home most of the staff at the its distribution center, with pay. With increased safety measures in place, Sweetwater is now operating with a nearly-full staff at the center, and has hired temporary workers to help cut into the backlog.

In 2019, the company earned $805 million in sales, and this year -- prior to the coronavirus pandemic -- it was anticipating more than 12% growth, topping $900 million. In 2021, Surack still hopes to surpass $1 billion. But, he says, it’s still too early to tell what impact COVID-19 will have on sales.

“We started off January and February just blowing through both of those months, far exceeding our goals and expectations,” he says. While March sales were “off a little bit, but not a lot,” like every other business owner in the U.S., he’s still waiting to see just how much the crisis affects his business.

“Based on sales right now, we're still gonna have a pretty darn good year,” he says. “Now, will it change when people are filing for unemployment and getting desperate here in a few weeks? I don't know, we'll see.” Facing a potential recession, Surack at least takes some comfort knowing that his company has built up a loyal customer base, cultivated over four decades of focusing acutely on their wants and needs.

As a manager, Surack is almost singularly focused on providing top-of-class expertise and customer service. Once they’re hired, Sweetwater Sound’s staff of roughly 500 “sales engineers” all undergo 13-week training programs -- what Surack calls “Sweetwater University” -- to ensure the highest level of customer service and satisfaction. During the training, which takes place at Sweetwater Sound headquarters, sales engineers embark on a series of 300 classes taught by 80 instructors on subjects including recording technology, instruments, live sound, sales training and professional improvement.

“We develop relationships with our end users,” Surack says. “Eighty two percent of our calls are outgoing calls. We're calling a customer and telling them about a new microphone or a new guitar or a new keyboard. Amazon's never going to do that.” (Surack estimates that half of the company’s business comes from direct sales.)

Even after that intensive initial training, all sales team members are required to attend two training sessions every week for the rest of their careers at Sweetwater.

“I believe in the Japanese term ‘kaizen,’ [which means] continual improvement,” Surack explains. “I don't believe you can stand still. You're either going forward or you're going backward. And, of course, I want to go forward, so we're always working on getting better.”

Once his sales engineers are in the field, they are given wide latitude in doing whatever they can to meet customers’ needs, whether that means “paying for an Uber ride” or replacing a keyboard or a guitar. “You'll never get in trouble for doing too much for the customer,” says Surack.

A resident of Fort Wayne since the age of 13, Surack is committed to giving back to the local community. Each year, Sweetwater Sound supports hundreds of local nonprofit organizations and doles out millions of dollars in charitable donations. After the coronavirus pandemic shut down the local Boys & Girls Club, Surack wrote a $100,000 check from the company so the club could continue paying its employees.

At the company’s sprawling 163-acre campus, they offer free meeting space for Fort Wayne residents, and in 2013 Surack established the Sweetwater Academy of Music and Technology, a 35-room music school that offers private lessons in everything from guitar to music production to roughly 1,100 people each week. Employee amenities there include a dedicated doctor and nurse providing free medical services to staff and their families; an on-site gym, hair and nail salon and gaming area; cafeteria with subsidized meals; and even a full-time concierge who assists employees with everything from car maintenance to concert tickets. As an added bonus, the complex includes a giant steel slide that offers a quicker and more exciting way to travel between floors.

At least for the time being, Surack plans on continued growth. Though the project was recently pushed back from a July start date, the company previously greenlit construction of a new 70,000 square foot, $31 million conference center that will provide meeting space for up to 1,300 additional people. In the first quarter of next year it’s also planning to open a new retail superstore at its Fort Wayne campus that will double the size of the current one, which did about $16 million in sales in 2019 alone.

“I just really believe in doing everything we can for our employees,” Surack says. “They work hard here and put a lot of hours in here. I want to show them that I respect them and love them. And if you do that, then they're really good at showing that to our customers.”

SPOTLIGHT:

I’ve learned that failure is not an option. It sounds cliché, but where there’s a will, there’s a way.

Successful business owners hire smart, creative, talented people and then give them the tools and the autonomy to do their jobs well.

What hasn’t changed in my 41+ years of business is our commitment to the customer. It started as a way for me to help my friends make music. That’s still the case - now we just happen to have millions of friends.

Something many people don’t understand is that success doesn’t happen overnight. It takes years and years of hard work and dedication.

It was always obvious to me that by doing the right thing, the business would grow. It’s not about making an “easy sale.” It’s about integrity. Earning a customer’s trust is what’s most important in the long run.

The best advice I could give someone thinking about starting his or her own business is to not to listen to naysayers who don’t understand what you’re trying to do. It’s YOUR dream.

I believe it’s wise to follow the Boy Scout Law, which says a Scout is trustworthy, loyal, helpful, friendly, courteous, kind, obedient, cheerful, thrifty, brave, clean and reverent. Those are good principles by which to live and also by which to run a business.

The great thing about having a successful business is the ability to give back. My wife and I feel blessed to be able to support our community in various ways and feel it’s our responsibility to share what we have.

Spotlight is a Billboard Business series that aims to highlight those in the music business making innovative or creative moves, or who are succeeding in behind-the-scenes or under-the-radar roles. For submissions for the series, please contact spotlight@billboard.com.

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