40 years ago, he built a recording studio in a VW bus. Today, he runs a $725 million music empire

May 22nd, 2019

By Parija Kavilanz | CNN Business

In 1979, when Chuck Surack was 22, he created a makeshift recording studio in the back of a beat up Volkswagen bus and drove around Fort Wayne, Indiana, recording local bands, choirs and singers.

Surack, who had toured for five years playing the saxophone and keyboards after he graduated from high school, had outfitted the van with equipment he had gathered while on the road.

"I knew from my band experience that paying for studio space was very expensive," said Surack.

He equipped his mobile studio with a reel-to-reel tape recorder that could record from four microphones at a time. He'd then mix the audio into a final recording.

"I'd drive to local schools, churches and clubs, mic up the bands and choirs and sit in the bus with 200 feet of microphone cable and my headphones on and record them," he said. He'd convert the recordings into albums and cassettes for his clients at a discount to traditional recording studios.

That Volkswagen bus was the starting point of Surack's company, Sweetwater Sound. Today, Sweetwater Sound is one of the largest online retailers of musicalinstruments and audio equipment in the United States.

"Basically, we sell anything that is used to create and record music," said John Hopkins, the company's chief operating officer.

According to Hopkins, the company ships 3,300 guitars, 37,000 guitar picks, 830 keyboards, 460 drum kits and 5,300 microphones every week.

But Surack has expanded his empire well beyond music. He now owns a dozen other businesses in Fort Wayne under the Sweetwater brand. There's SweetCars, a luxury car dealership, private charter businesses Sweet Aviation and Sweet Helicopters, and a local optical retailer called Longe Optical.

But the bread and butter of his business is the music.

Surack said his company is profitable and growing sales by 20% to 25% a year. With annual sales now of $725 million for the music business alone, he's confident that the $1 billion revenue mark is within reach.

"I never dreamed I would have a business in this position," said Surack. "I'm not driven by greed or desire to make money. I'm driven by doing the right thing."

'Mr. Surack' was my dad.

Surack credits much of his success to a synthesizer he came across in the 1980s.

In 1984, he saw a new instrument called the Kurzweil K250 at a trade show. "It was the first synthesizer that played back digital recordings of musical instruments," he said.

"It cost $20,000, but it was a game changer," he said. Surack bought one and eventually became a dealer for the product.

By the early 1990s, Sweetwater Sound had evolved from a recording studio to a dealer of high-end musical instruments and audio equipment.

"Musicians, bands, just regular people from all over the country would hear about us through the grapevine and buy from us," he said.

The company set up a website in 1994. "This was very early in the Internet world, so we used it primarily to educate people about our instruments. We were dealers for 100 brands by then," he said.

About 60% of sales now come from the company's web site, while the rest come through direct orders from the company's sales people. A fraction of sales -- $13 million a year -- comes from the Sweetwater Sound's retail store located on the company's 400,000-square-foot campus in Fort Wayne.

Sweetwater Sound employs some 500 salespeople, all of whom are either musicians or have technical experience in creating music such as in audio engineering. Also on the campus are recording studios and a 250-seat theater and, for employees, a cafeteria with subsidized food, a salon and spa and a clinic offering free medical care.

There's also a steel slide on the second floor. "Music is a fun business. I want to bring the fun to work," he said.

For Surack, who's now 62, taking care of his employees goes well beyond just signing their paychecks.

"I want to be Chuck to everyone. 'Mr. Surack' was my dad," he said. "I treat everyone with respect and I want to empower our employees ."

Over 40 years, Sweetwater Sound has grown to employ 1,700 workers, not including Surack's other businesses.

"I've never laid off a single employee in the company's history," said Surack. "My wife, Lisa, and I own the company 100%. Our employees are like family. We celebrate when they have babies, when they buy their house, even their first car."

Surack brings the same approach to customers. Every order contains a Thank You note with his signature and a bag of candy.

Surack believes it's this level of customer service that differentiates his business from Amazon(AMZN) and other musical instrument sellers.

"Amazon is doing a phenomenal job getting you your order in one day. But what Amazon isn't doing is offering personal attention to customers, answering any questions they have or educating them about the products."

Fueling Fort Wayne's economy

Longe Optical was on the brink of laying off its 40 employees and shutting down when Surack stepped in and bought the business in 2012.

"I didn't want those jobs to go away. I want to create more jobs in Fort Wayne," he said. The business has 70 employees today and has opened new locations.

"Unquestionably, Chuck has been a catalyst for a lot of entrepreneurial ventures in the city because of his own phenomenal success," said Fort Wayne Mayor Tom Henry.

"His real influence, however, has been in the community. Chuck and his wife are very involved in Fort Wayne's economic development, but they also support hundreds of organizations in the city through their philanthropic work," said Henry.

Among those organizations are the Fort Wayne Children's Zoo the Fort Wayne Philharmonic. Henry said Surack is also focused on expanding the city's commitment to arts and mental health awareness.

"I've been incredibly blessed. I could never have envisioned the success of my company," said Surack. "Now I want to help others."