Roger Kronstedt has been passionate about music his whole life, spending years playing guitar and teaching music. Twenty-five years ago, he turned his passion into his livelihood by opening Alexandria Music Company in Alexandria, VA.
His connections from teaching guitar helped him build out a network of music teachers who teach lessons out of his shop – as the store has grown, he has also found alternate streams of income to help bring in revenue during the slow seasons.
Learn more about how Roger has strategically grown Alexandria Music Company over the years and used financing to fuel some of that growth.
On Diversifying the Business
As you might guess with an instrument store, sales can be somewhat uneven – as Roger says, “Some days it’s a French horn and a clarinet and string instruments, so it can be a crapshoot.” This can make it difficult for them to manage inventory and count on steady revenue.
To smooth out their cash flow a bit, Roger built in lessons as a key part of the business from the beginning. As a former guitar teacher himself, Roger was able to tap into a network of other music teachers that he knew and built a robust lesson program out of his store. The lessons gave the business a regular, steady source of income to depend on, and often helped spur instrument sales.
As the business continued to grow, he also discovered that it was surprisingly seasonal. The start of each school year tends to be very busy, as school-age children come in for instrument rentals, while each summer tends to be very quiet as people skip lessons for vacations.
To account for this seasonality, Roger started offering weeklong “summer music camps.” While the camp itself provides much-needed revenue during the slower summer months, Roger also found that the camp helped sell more instruments and ongoing lessons to the camp attendees.
For example, they’ll offer the drum sets used at the camp for sale at a 30% discount to camp attendees, with the thought that purchase of the drums will spur purchase of more lessons as well. As Roger says, “So they pay for the camp, and the camp helps pay for the discounts, and hopefully, that bleeds over – ‘Hey, I want to take more lessons.’ So, it all connects.”
On Part-Time Help
One of the issues Roger faces every summer is staffing his store appropriately as his business fluctuates. He tends to depend upon college students working part-time during the summer to keep the store staffed, and often struggles when they go back to school in the fall – just as his business picks up with the back to school rush.
Fortunately, he’s been able to hire a few graduating college students who have stuck around through the fall to work full-time. It’s taken planning on his end to get staff (such as graduating college students) in place who can stay longer than just for the summer.
On Ownership Changes and Working with Family
Alexandria Music Company was initially co-owned by Roger. After growing the business for many years, Roger eventually decided to buy out his other partners, and sought financing to do so.
He initially applied for financing from more traditional sources, but found the application process cumbersome, and had to wait over a month to hear back on his application. Working with OnDeck got him his financing fast and gave him the flexibility to buy out his other business partners, while also having capital on hand for ongoing business needs.
When Roger bought out his other business partners, he simultaneously brought his daughter into the business as a part owner. According to Roger, his daughter got involved with the store slowly over the years. Initially, he says, “she took lessons from one of our guitar teachers here, and I didn’t want to be hovering over all the time. She would ask me questions every now and then.”
Eventually, she became a guitar teacher at the store herself and began selling her art out of the store. It made sense to them both to have her buy into the business when Roger bought out the other partners.
Watch the video below for the full interview between Roger Kronstedt and OnDeck CEO Noah Breslow: