McKeough Enjoys Land Rush
So instead of continuing as the local sales manager for a Vermont company, Mike McKeough decided to strike out on his own and went into business for himself.
Fourteen years later, the development company he runs is now one of the fastest growing privately-owned businesses in America.
The firm, which specializes in developing residential housing lots along inland lakes in rural communities, mostly for second homes and vacation and retirement uses, recently made Inc. magazine’s list of America’s 500 Fastest-Growing Private Companies.
“We’ve had some terrific growth the last couple of years,” said McKeough, the founder and president of McKeough Land Co. in Grand Haven.
He credits the showing to “just some terrific projects” the company has done of late in Wisconsin and Traverse City, plus “a lot of hard work” by his staff of 16 employees.
McKeough Land Co. ranked 388th on Inc.’s 2003 list with a five-year growth rate of 461 percent, which has pushed annual revenues from $1.3 million in 1998 to $7.3 million in 2002. The company, McKeough said, is on track to record revenues of $13.5 million to $14 million for 2003.
And to think that real estate and development wasn’t even a career consideration for the 41-year-old McKeough coming out of college.
McKeough, with a degree he earned in 1986 in finance and economics from Lake Forest College in his native Illinois, initially weighed a career in banking or commodities trading. Then a friend who was working for the former Patten Corp., a Stamford, Vt., national developer of recreational and residential properties, looked him up.
He interviewed with the company and “we hit it off right away,” he said. McKeough was offered and accepted a job as a sales representative at Patten’s new South Haven office — and a career in real estate and land development was born.
“It just sounded fascinating to me,” McKeough said. “It was a good opportunity that led to a great opportunity.”
Part of the allure for McKeough was, and still remains, the variety of challenges the business offers and the skills it requires, from planning and putting together a large project to working directly with clients buying their dream property. One day, for example, McKeough is working with bankers to finance a deal, and the next he’s driving to another state wearing boots and blue jeans to walk and inspect a potential project site.
“It’s not the same day in and day out. Every project is different and they all have their unique challenges,” he said.
Soon after joining Patten Corp. in 1987, McKeough was promoted to sales manager in South Haven and a year later enrolled in Patten’s fast-track executive training program in Vermont. After completing the program he was transferred to Freeport, Ill., west of Chicago, where he worked as a regional manager.
But by 1989, Patten Corp. was struggling because of a large inventory and the recession in the northeastern United States that made it increasingly difficult for him to secure the capital he needed from the corporate office to run his region.
At about the same time, McKeough was asked by a bond investor in Chicago to draft for him a business plan for running a land development company. The investor’s venture never got off the ground, but the exercise helped to nudge McKeough toward his decision to go into business for himself.
“It got me started to thinking about, ‘Hey, perhaps I could do this on my own,’” McKeough said. “I thought I could parlay that into my own business and I knew we could grow a pretty strong business here.”
Since he founded the company in 1989 and settled in Grand Haven, McKeough Land Co. has developed some 90 projects consisting of an estimated 2,500 housing lots, working primarily in Michigan and Wisconsin. McKeough typically is managing 20 to 25 projects in various stages of development at any given time.
Helping the business grow in recent years has been the economy and a bear market on Wall Street. At a time when the market was down, many people were putting their money into real estate.
“People are looking for alternative places for their money. It’s ‘if we’re not going to make 10 percent in the market, we may as well buy this land,’” McKeough said.
In running a rapidly growing business, McKeough follows an “open-book” management style that has staff directly involved in setting the company’s goals and direction and he has learned to become more of a delegator. He said he offers high rewards to employees, while holding high expectations, and a high level of autonomy to managers of the company’s satellite offices in Traverse City, Poynette, Wis., and Albany, Tenn. McKeough recently ventured into the Tennessee market and plans to move into Kentucky soon.
In looking at the future, McKeough sees the business growing at upwards of 50 percent a year, as it has so far in 2003. “Continued, sustained, controllable growth,” he said, “is really what we’re aiming toward.”