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Pat’s Tire Serves a Custom Niche

Ag Tire Dealership’s Next Generation Plans for the Future

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There isn’t a surge of new farmers moving into rural Wisconsin, Illinois and Michigan, fueling the growth. The secret for Pat’s Tire to continue to grow? “Do a good job,” say the Koenigs.

Bigger tires with heavier farm equipment add up to more complex fitments. They require more precision and expertise. For Pat’s Tire Sales & Service Inc. in Chilton, Wis., the bigger the better. Those combines, large four-wheel-drive tractors and choppers drive this 42-year-old family business.

Pat and Karen Koenigs founded Pat’s Tire in 1978, and as their son, Brad Koenigs, says, “Pat did the work but Karen made the money.” 

His dad built the business working 80 hours a week — and expecting his employees to do the same. His mom managed the money, the insurance and how to invest in the business to make it profitable. “Pat’s the sledgehammer and she’s the one who made it work.”

Their teamwork has helped this single-location, farm-focused tire dealership grow. Pat’s Tire serves customers in three states and while it sells upwards of 6,000 passenger tires a year, this is a business built on ag tire sales and service. About 80% of the company’s units sold are for commercial applications on the farm.

And now the second-generation is in the process of taking over ownership. Brad Koenigs and his brother-in-law, Josh Lemke, are buying the business gradually, rather than in a one-time, lump sum deal. Pat Koenigs is “down to 60 hours a week. He’s starting to step back.”

So now it’s up to the next generation to determine how to continue the dealership’s success, while also making its own mark.

Critical to the success and growth in recent years has been the company’s connections and partnerships with farm implement dealers nearby. “Your John Deere salesman doesn’t know a lot about tire and rim combinations, so they call us and we’ll take care of it. We’ll set the wheel spacing and put duals on. Instead of having their technicians do it, they call us to set it up for them.”

And those phone calls are constant, says Koenigs. “When the customers call the (implement) dealer with questions about tires and rims, they tell them to call us.”

Much of that has come from the commitment by Pat’s Tire to stock a large inventory of both tires and wheels for all of the equipment on the farm. Two large warehouses on the dealership’s 10-acre site are stocked with about $2 million in inventory.

“We’ve always been very aggressive as far as that goes,” he says. “We’re willing to invest where a lot of smaller shops won’t.”

Pat’s Tire also has made a name for itself with creative solutions and fitments. “Pat doesn’t say no to any job — for good or for bad. We do a lot of creative stuff.”

One customer wanted his Kawasaki Mule to maneuver through 30-inch corn rows. Koenigs remembers this was his first meeting with this particular customer, and he couldn’t imagine what the farmer had in mind. But the customer’s grandchildren use the Mule to pick stones in the spring. He wanted to give them more wiggle room so they weren’t running over anything in the field. “It made sense.”

Another customer asked for duals on the back end of his John Deere Gator. Why? He hauls a sprayer to do spot treatments and didn’t want to leave ruts. “He’s worried about compaction.” Pat’s Tire made it work.

The dealership has put flotation tires on everything from a manlift to a telehandler.

Those projects appeal to the younger Koenigs, who never imagined he’d land in his hometown taking over the family business. He went to college, studied engineering and dreamed of building stadiums or bridges. During an internship, he got his first taste of office politics. He didn’t want any part of it.

“In a tire shop, especially my dad’s tire shop, you work together. You get stuff done.” 

He finished his degree and returned to Pat’s Tire. “The best part of college for me was moving away and finding out what really fit me and what didn't. It gave me an appreciation for the business and my parents and the small town.”

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COVID-19 came as Pat Koenigs, center, gradually has been transitioning ownership of his business to the next generation: Josh Lemke, left, and his son Brad Koenigs, right. Brad says they've weathered the storm so far, and they've found it's been important to take precautions and "respect everybody's take on it."

 

Today, his engineering skills still come in handy. “We build a lot of wheels from scratch. If it’s something goofy we’re going to try it.” 

He prefers those problem solving projects. “It’s not as mundane.”

The dealership’s farming customers often buy new equipment knowing it will need some adjustments before use. Making changes to wheel spacing and swapping single tires for duals are frequent requests. Koenigs says he’s seen the modifications Pat’s Tire has made on new models offered as an original equipment option a few years later.

He estimates about two-thirds of his customers can see the need for those changes when buying a piece of equipment. Pat’s Tire works up an estimate and tells the customer “it should cost this or less” to make the adjustment. That gives the farmer a dollar amount to use in his budget.

Because the dealership does swap different-size tires on equipment often, Koenigs says it gives Pat’s Tire a plentiful inventory of good quality used tires. And those come in handy, especially when a farmer is strapped for cash or when there’s a piece of equipment broken down in the field during planting season.

“We don’t really have a slow season anymore.” 

When farmers start to put equipment away for the winter, they address maintenance needs. “February, March and April are our busiest months of the year, as far as setting up big jobs. That’s when you do four or five tractors for the same guy in a week because they don’t want to be messing around when it’s time to go.”

Growth

Koenigs says business has been growing, but there’s been nothing steady or predictable about it. “One year we went from selling 2,000 semi tires to 3,500 tires — and it never went back down.” 

Pat’s Tire has seen those kinds of anomalies in several categories in recent years, including medium truck tires, passenger tires and ATV tires. And when good weather meets favorable farm prices, it happens with farm tires, too. 

“We’d have two or three trucks at implement dealers setting up new equipment,” he says. “When the market went down and money wasn’t there for farming, we started putting tires on (equipment that) would have been traded in. So we’re very fortunate that the work’s been consistent

“What we’re selling changes, where we’re doing it changes, but the work has always been there.”

And though it depends on the application, the dealership’s top-selling and go-to farm tire brands are Michelin, BKT and Mitas. They sell lower tiers and imports, too, but Koenigs says he’s careful not to suggest that lower-priced tires can perform the same way premium brands do. 

But there are times when a farmer wants to keep the price down and if he doesn’t have a used tire option in stock, that’s a time to offer the lower tier product. 

He also suggests that the customer think about how often the piece of equipment is used and “maybe you should do something better if this is a tractor you use everyday.” 

Koenigs says the key is that the customer has input and makes the decision.

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Zach Yanke is among the 20-plus employees serving Pat's Tire customers in three states.

 

Investing in equipment

Pat’s Tire operates five service trucks. Koenigs says the trucks are all set up identically. “If one breaks down, you can start shuffling drivers. You want it to be as familiar as possible.”

They buy Kenworth chassis and leave the setup to Stellar Industries. Koenigs says they purchase the biggest trucks possible that don’t require a commercial driver’s license. 

“We’d like to have bigger trucks for more capacity, but trying to find someone who will change tires and has a CDL, you’re looking for a whole new guy. We’re very fortunate. We’ve got five of the best road guys in Wisconsin.”

The dealership buys one new truck a year, so the oldest is five years old. Koenigs says the plan is to invest in a sixth truck - “not necessarily that we have the work for a sixth truck all day, every day, but there are some days of the year it would be nice to have an extra truck in the yard.”

Planning for that kind of long-term investment is a sign of change for Pat’s Tire. Koenigs says he sees value in having more back-up equipment at the ready. It will reduce stress, but most importantly it will allow the business to continue to respond quickly to a customer “who needs service now.”

With every replacement, there seems to be an opportunity to buy a larger piece of equipment designed for the bigger and heavier tires in heavy-duty applications.

“You make a choice as a dealer: do you equip yourselves so your guys can do it safely and efficiently or do you not make the investment and take whatever business is left?”

The impact of COVID-19

This year has required plenty of adjustments, but Koenigs says, “the amount of work didn’t change. It just got harder to get everything done.”

Pat’s Tire has taken precautions to keep its workforce healthy and Koenigs admits they’ve probably even gone overboard. Early in the spring, one of the company’s road service employees had been inside the local auto parts store. It turns out one of the managers there tested positive for COVID-19. Even though the two never saw each other, Pat’s Tire sent its employee home for two weeks. 

Another employee learned he was potentially exposed and then developed a cough. He too, was sent home for two weeks. The company used its Paycheck Protection Program money to pay those workers, even while they were off the job.

“We were more careful than a lot of other places,” he says. 

The big concern was keeping Pat’s Tire open to serve customers. “If we had to close our doors for two weeks, that’s a lot of people we’re not taking care of. There were a lot of decisions where we (made) ourselves short-staffed to be on the safe side — to protect our business and our customers.”

Even with the disruptions, Koenigs says Pat’s Tire has had a good year. It won’t match 2019, but that’s because there was a two-month period where “the flotation market was just nuts” and tires with 50% tread had to be pulled off dump carts because they didn’t have enough traction. But absent that, profitability and tire sales are “right in the same ballpark” as a normal year.

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