Entrepreneur Stories: Jim VanNatta, Hockinson Market

Meet Jim VanNatta, Owner-Operator of Hockinson Market and Amazon Business small business customer. 26 years ago, Jim VanNatta bought Hockinson Market, a country store near his hometown in Clark County, Washington that sold groceries, gas, and video rentals. After years of booming development in the area, Jim’s bustling business was brought to a halt in 2008 due to the economic recession. Learn how he pivoted his business with help from his son and Hockinson Market General Manager, Justin VanNatta.

Q&A with Jim VanNatta, Owner-Operator, Hockinson Market

Want to learn more about Jim’s entrepreneurial journey? Read the Q&A below to learn about how Jim got into the grocery store business, why he chose to pivot away from groceries, and how he transitioned his business into a pizza shop and tap room.

Q: As a small business owner, what roles do you play in your company?

A. I jokingly tell people I’m both the president and janitor of the company, and that’s pretty much true, and I still do everything in between. I stock shelves, pour beer, and make pizza. I kind of do all of it. I would not be able to do any of it without my employees, however, who do the vast majority of those things, but I do a little bit of everything. It’s kind of necessary.

Q: How did you get into the grocery business?

A:  I got out of college during the recession in the 1980s. I took the only job I could get and I did it for six and a half years while looking for a new job that entire time. But my wife and I kept having babies, so I couldn’t leave my job because we needed the insurance. Just by chance, after six and a half years, a business owner said, “Hey, I’ve got this little store. I’ll give it to you for no blue sky, just buy the inventory, and it’s yours.”

I’d been thinking about buying a business, and when this guy offered me this business, I took my pregnant wife out to look at it. The business was 90 miles away from where we were living. It was in a tiny little town - a mill town - and I dragged my whole family up there. We lived there for five years in the original mill owner’s house.

The search for grocery store number two

I looked at 28 stores all over Oregon and Washington, and was lucky I found [Hockinson Market]. My wife and I are both from Clark County, which brought us back home. We also own the property – which was what we wanted - so we could control our own destiny. We never looked back, it was just a great decision.

A community hub for almost a century

This building was a dairy co-op and built in 1928.  It was a one-stop shopping center with gas, groceries, a hardware store, a feed store, and a giant cooler in the basement for milk to go into. The building has remained the center of the community for its existence. So, I like to think that I’ve continued that tradition.

Q. What is Hockinson Market now?

A. My business is hard to explain. We were once a country store, but have since pivoted towards a tap room and pizza. I consider what’s left of the grocery just to be window dressing, making it attractive for customers to come in and get that hometown feeling they’re looking for.

Q. What happened that made you pivot the business?

A:  The recession in 2008 to 2012. If you look at my social security, I have four years of zero income. It was rough. My accountant called me one time.  He says, “Jim, you’re aware you’re not making any money, right?” and I said, “Yeah, I’m here every day. I know.”  He goes, “Well, you can sell it.”  I’m like, “No, no, I’m going to stick it out.”

Prior to the recession of 2008, we made sandwiches and we had a taco station. This area was growing very rapidly, so many customers were construction workers in the area, and we did quite well.  We also had video rental, which was a big part of our business back then too. However, simultaneously with the recession came the advent of online video rental and the DVD, which just killed off video rental. When the recession started, all the [construction] workers were gone. The housing industry collapsed. And then we went from making a lot of food to almost none, to the point where I couldn’t afford to have an employee standing around all day long for the amount of food we were making, and so I shut it all down.

From groceries to pizza

After about six months, I said to myself, “Okay, I’ve got this table sitting here. I’ve got this counter that I built specifically for food. I got to do something.” That’s when I came up with the idea to make take-and-bake pizzas - a pizza that somebody could pick up, take home, and bake in their oven. That did fairly well, and there was virtually no waste. As that progressed, I thought, “Every once in a while, I’d have a pizza that I didn’t sell in a timely fashion.” I decided buy a little oven, so before one of these unsold pizzas goes bad, I’ll bake it and sell it. One thing led to another, and next thing I know I’m remodeling the whole kitchen and putting in a much bigger oven.

Growth brings national chains

Things were progressing, and we were selling more and more pizza and less and less groceries. The growth in the area also brought national chains a few miles away, and that took away a whole group of people that used to come here for their food, cleaning supplies, dog food and that kind of stuff. It was just a natural transition.

Q. How did you come up with the take-and-bake idea?

A. I was just struggling to come up with anything to draw people in, and every Friday we went down to the pizza place to get our own take-and-bake pizza. In fairness, it’s not like it took off. I wasn’t making very many, hence the need for the oven to bake off the ones that didn’t sell.  So over time, that contributed to the end of my last zero income year.

Beer = sales

I went to visit my son while he was going to school in Bellingham, Washington, at Western Washington University, and he goes, “Dad, let’s go down and get some beer”. I think he’s taking me to a tavern or something, and we walked down the street to a gas station. I question, “I thought we were going to go get a growler?”  To which he responded, “We are.”  We walk inside this gas station, a regular old gas station, and it has a tap room in it.  It just had a tap set where you could fill up beer. Of course, this is a college town, so it made sense.  But I just thought, “If a gas station could have taps, then I could have a tap room.”

I took my office (that’s why I’m in the janitorial closet now), and turned it into the tap room. I always tell people, that made my pizza sales go up about 35%.  Within a number of weeks, I told myself, “I’m going to need a bigger space, because it really was just a tap room. You could have 12-15 people in the room. That’s it. Now, you could go sit in the rest of the store with your beer, but everybody wanted to come into the tap room, because it was like a speakeasy. It was in the back of the store and you had to go find it.”  And so, I built what we call the annex – which is part of my old storage space, which took about a third of the building. I also added a 10 by 80-foot deck on the back of the store. And our sales went up another 35%.

More renovation

I still had the old linoleum floor and linear shelving in the store, so it still looked like a convenience store and I didn’t like that. I also didn’t like the lighting, which was fluorescent strip lighting, so I redid all the lighting, took the floor out, and I took the linear shelves out and replaced those. Doing that opened up more space for seating upfront. Sales went up like 35% again.

Something about doing that changed the image of the business as a place for people to go and sit.  Now people don’t mind go and sitting out front. They sit out front all the time. The whole store is attractive. The whole back room thing, to me, was always kind of strange. I was like, “Why won’t people just go and sit out there?”

Q. How did you manage and fund your renovation budget?

A.  I have to admit, it was totally fly by the seat of my pants. I did not take out a loan. I had a very flexible contractor that I worked with, who was able to do things in a relatively short period of time. My sales were going up very rapidly, and I found myself bizarrely flush with money to do these [renovations]. It was kind of shocking that I was able to just do it using my cash flow, but that’s exactly what I did.

Cash flow and multiple income streams

I got lucky. I told you before, I did all that renovation out of cash flow. The economy changed, there was a lot of construction around here that had just ramped up again, and a lot of people were coming in. You definitely don’t want to go in underfunded. I’ve talked to so many business owners that went in underfunded and had problems. We were lucky that we didn’t—you know, my wife had a good job, so we were able to get through the struggles, and I had rental income coming in from other businesses on the property. After the recession, I also built an office suite and now that’s a substantial part of my income.

Q. Did you have any help from family or friends?

A.  Yes! It’s definitely a family business. My wife Teresa, who is a third-grade teacher, was my interior and exterior decorator and came up with color schemes and decorating ideas, including donating our living room hutch for the taproom. My daughter has also worked for us, and her husband is a brewer who has worked for us before too. My son, Justin, had graduated and had a job for three years in Bellingham, but his job ended unexpectedly while his wife was six months pregnant. They had just shut down his business, so he was released and had nothing to do. At the time, I had just started remodeling for the annex that I spoke of earlier, so I told my son, “Justin, I’m over my head. If you come down here, I’ll make you my assistant manager.” I could see that I wasn’t going to be able to do this all myself. We are co-managers now, and I’m getting to the end of my career. Justin’s going to take it over. He is at least in spirit partially responsible for our success as well. I’m the old generation and he’s the new generation

Q. What are your business goals now?

A.  I’m coming to the end of the road, if you know what I mean.  And I just want to pass on a healthy business to my son, who’s indicated that he’d like to continue with the business. My goal in the next couple of years is to make sure that we’re still doing the right things to make him successful moving forward.

Q. Any tips to the aspiring small business owner or pitfalls to avoid?

A. Make sure you’ve got your Xs and Os in place on what your local jurisdiction requires you to be doing before you start dipping your foot into the water and finding out you’ve got to take a hard left-turn to make that happen.

Other than that, I think that if you’re doing something with passion, that’s always best for business. I went with something I was passionate about. To be honest, I wasn’t passionate about grocery. It was an ends to a means. And my wife would tell you the same thing. I became much happier after we pivoted.

I was just working before. I was coming out of the recession, so I was probably a little bit depressed. Doing something that you feel strongly about I think is very important.

We would like to thank Jim VanNatta for meeting with us and sharing his stories as an entrepreneur in the Pacific Northwest and to Justin for participating in the filming.  Read how Jim uses Amazon Business to help his business. 

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