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Pets, People and Small Business Growth Bring SBA Honor to Kahoots Partners

September 24, 2020 | SBA 504 Loans

You’ve heard the well-worn line about small businesses starting out of a garage. While that’s often true, entrepreneurs Mike Bittinger and Ethan Tunnell did the adage one better. They started their Kahoots Feed & Pet Stores business literally out the back of a pickup truck.

“My dad loaned me $1,000 for a truck and we drove door-to-door in the back country of Ventura County selling our one product – hay,” said Mike. “I waited tables at night to make ends meet.”

Bale by bale, year by year, Mike and Ethan’s feed business grew.  Twelve years into their small business venture, the back-breaking demands of hauling hay convinced them there had to be an easier way to make a living that still celebrated the love between people and animals. They elected to broaden their product offerings from feed to all varieties of pet food.

“Initially we sold many of the familiar food brands out of our store and then, after listening to our customers, became motivated to produce our own brand that reflected our values for quality ingredients,” Mike said.

Creating Their Own Branded Food Accelerates Growth

After months of research into manufacturers that could guarantee the good nutrition and consistency they sought, Mike and Ethan launched their first line of Kahoots-branded dog food. Dogs loved it and so did their owners, so the two partners soon branched out into their own brands of food for cats, birds, fish and other sundry critters. They’ve never looked back.

kahoots-storeThe subsequent, extraordinary success of Kahoots is not only measured in the happiness of hungry animals of all kinds, but in the number of Kahoots stores throughout Southern California. Mike and Ethan now have a litter of 22 stores and employ 230 people who share their passion for animals. They’ve expanded into dog training and vet services.

Kahoots’ steady expansion has been nurtured along the way with Small Business Administration (SBA) financing, including three 7a program loans through Wells Fargo Bank and earlier this year a $3.1 million SBA 504 loan via a partnership between Wells Fargo and CDC Small Business Finance. The loan was used to fund construction of a new, 22,000-square-foot store in Hesperia, California. Mike and Ethan worked with CDC Small Business Finance VP Senior Commercial Lender Mike Sarthou who said that because the SBA 504 loan only requires a 10% down-payment, the Kahoots partners were able to preserve their cash for inventory purchases and other operational expenses.

Mission and Success Brings Prominent SBA Award

The retail success of Kahoots and the company’s consistent support of local animal rescue shelters recently earned Mike and Ethan the prestigious SBA Small Businesspersons of the Year Award in San Diego for 2020.

Kahoots’ ability to prosper has been impressive, particularly in light of the crippling COVID-19 pandemic.

“It definitely took a toll the first two months,” said Mike. “But we’re now back up to our pre-pandemic sales level, growing at 15% a month.”

The rebound is in part because of the industry Kahoots operates in. In the throes of the pandemic, more people are working remotely from home and are paying more attention to their pets, which translates directly into pet food, supplies and vet services.

The other reason for Kahoots’ resurgence is their insistence on staying faithful to their employees. Mike and Ethan didn’t lay off a soul.

Kahoots is committed to its employees and giving back to the community

“We pay our people well and make them feel part of a family,” Mike said. “And investing in training for our staff is part of our uncompromising commitment to them and the company.

We care about pets, yes, but we also care about our employees because they’re the ones who create genuine connections with our customers and the pets they love.”

Are you a small business who needs financing either for recovery efforts or to expand your business?  Talk to one of our loan officers who can explain all your options in minutes and find financing that best meets the needs of you and your business. Let’s talk! Reach us at loaninfo@cdcloans.com or (619) 243-8667. You can also apply online.

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