SPEARFISH | While challenges await entrepreneurs in the booming Bakken oil fields of North Dakota, those with capital and a plan may reach their goals, speakers at the Black Hills Bakken and Investor Conference told more than 100 attendees Wednesday.
“It’s a challenging environment,” said Jeff Zarling, president of DAWA Solutions Group, which has assisted more than 100 business owners and leaders in western North Dakota in recent years. “But we’ve seen unbelievable successes over the past seven or eight years. The needs are seemingly endless.”
Zarling recounted startling statistics. Some small North Dakota communities have tripled their populations in a handful of years. Sales tax revenues have skyrocketed. In Williston, at the center of the boom, building permits topped $1 billion in just three years. Since 2012, 1,800 new producing wells have come on line.
And North Dakota’s gross domestic product has swelled to $56 billion in eight years.
“This is a multi-generational play,” Zarling said, dismissing those who say the Bakken is just another in a series of boom-and-bust cycles. He said he believed the boom would last 30 to 40 years.
Among the greatest challenges faced by those who would venture to western North Dakota is a serious lack of available capital, though that has eased somewhat in the last year, Zarling said.
“There is a tremendous lack of capital,” he said. “We have hundreds of people looking for capital to exercise their business plans. The need is tremendous.”
Other challenges have included a lack of housing, workforce recruitment and retention, logistical concerns, and the increased costs of operation, often termed the “Bakken bump,” he said. Service industries were having the most difficult time attracting workers, and Walmart was paying $17 to $18 per hour over the past year, Zarling noted.
He encouraged those wanting to enter the Bakken market to do their homework, studying a half-dozen research resources, building networks by attending conferences, and “stick(ing) to your knitting” by knowing their area of expertise.
On a lighter note, entrepreneur, author and Inc. Magazine senior contributing editor Norm Brodsky, who built up a New York storage business and sold it for $110 million, brought his experience to the stage with a quick-witted, hypercritical rendition of the way many conduct business.
The experienced businessman said his father often told him, “There is a million dollars under your shoe. What he meant was there was opportunity all around us. Opportunities. They’re there. You just have to find them.”
Brodsky, who has invested millions of dollars in startups, most recently in North Dakota hotels, encouraged conference participants to know their customers, educate and empower their employees, and build a life plan that complements their business plan.
“Treat your clients as if they are prospects” he advised. “We all would do anything for a prospect. So treat clients like a prospect. Turnover rates will be far less. Educate your people. Everybody can be educated, everybody is trainable. They are the most important asset of your company. They are the ones who take care of the customers.”
Brodsky told the dreamers in the room that their penchant for planning for tomorrow must necessarily extend beyond their business plans to encompass a “life plan” that would inevitably lead to fulfillment, success and happiness.
“Why? Why are you doing all of this?” he asked. “Why are you building your business? We all have dreams and think about the future. We think about it all the time. Build a life plan. Make sure they mesh. If you want to get a great life, make plans to do it.”
Sponsored by the South Dakota Oil & Gas Association, the two-day conference, with dozens of panels and featured speakers, was intended to position South Dakota businesses for a role in the energy boom, said association Executive Director Adam Martin of Sturgis.
“The theme is helping companies develop their relationships in the Bakken with priceless business advice,” Martin said. “South Dakota is becoming the central hub to the oil and gas industry in surrounding states. We are seeing the service industries taking advantage of what South Dakota has to offer.”
The conference continues at 8 a.m. today at the Spearfish Holiday Inn Convention Center with a keynote address by South Dakota School of Mines & Technology President Heather Wilson, an appearance by former South Dakota Gov. Mike Rounds, and numerous talks by oil and natural gas industry experts, as well as investment advisers.