Entrepreneurs and Economic Growth and Value in Education

This hopefully not-too-rambling blog entry is the result of the recently realized convergence of several important issues related to entrepreneurship and our efforts to support entrepreneurial activity here at Monmouth College.

This entry is also partly the product of the convergence of a couple of recent news articles published on the Monmouth College webpage. More on the specific issues and articles shortly…

At the heart of the matter here is the role of entrepreneurs—particularly in the context of their running of small businesses—in “economic growth” and the general welfare of economies and communities (considered at whatever level one desires [i.e., local, regional, national, global, etc.]). In this regard, over the course of just the last couple of months, I have heard pieces of numerous national and regional news stories which all contend or conclude that small—usually entrepreneurial—business is The Key to economic growth and welfare.

Although I never question the importance of entrepreneurship and small businesses in the context of economic growth and welfare, I—as someone extensively trained in many forms of social science research methodology—do frequently question the accuracy of data, the means of data collection, and conclusions featured in these stories.

I am far more swayed toward believing that small—usually entrepreneurial—business is The Key to economic growth and welfare when I see hard evidence of it with my own eyes. Take, for example, the following (18 July 2014) Monmouth College news article.

http://www.monmouthcollege.edu/information/newsEvents/newsDetails.aspx?Channel=%2fChannels%2fCampus+Wide&WorkflowItemID=7f84fc10-9f8f-4041-9b16-2aa96de771c7

The article nicely chronicles how (1) a small, entrepreneurial business—co-founded by 1986 Monmouth College graduate Roger Well—is providing internships to three Monmouth College students this summer, and (2) this is the result of Mr. Well’s interactions with “several business classes throughout the spring semester.” This, in and of itself, is a wonderful example of the potential key role of small, entrepreneurial business in economic growth and welfare. However, this story barely scratches the surface in this regard.

Not featured in the article are the following issues.

1. The internships at ENFOS are extraordinarily good internships. These three positions are providing the students with invaluable exposure to the world of high-tech, big heavy industrial business activity and are paid positions; very well-paid. Many internships today have students doing relatively meaningless tasks that they are not paid to perform. These three internships at ENFOS provide the student interns with valuable experience, social networking, and substantial pay.

2. Mr. Well’s stated interactions with “several business classes throughout the spring semester” consisted primarily of working closely with me and students in two strategic business capstone courses I taught here at Monmouth College in the Spring semester (as well as Mr. Well’s enlightening guest speaker appearances in my Midwest Entrepreneurs and Principles of Marketing classes). In my facilitative capacity, I guided the nearly 40 students through the at first intimidating process of understanding what ENFOS actually is and does down a path toward being able to provide hopefully useful strategic recommendations to ENFOS (addressing key strategic issues faced by the Silicon Valley firm as provided to us by Roger Well). My presence in the picture in the article is due to the fact that I was at the ENFOS office in Naperville, IL to present a summary of the classes’ strategic recommendations to Mr. Well, the interns, and other ENFOS personnel. The semester-long interactions between Well and I and the students in the two capstone classes were the subject of an earlier Monmouth College webpage article.

http://www.monmouthcollege.edu/information/newsEvents/newsDetails.aspx?Channel=%2fChannels%2fCampus+Wide&WorkflowItemID=1fe3340e-8d08-455b-8206-2f73e0f4f68e

3. Most exemplary of the notion that small, entrepreneurial business can play a significant role in economic growth and welfare is the fact that ENFOS not only employs three Monmouth College students as well-paid summer interns but also hired a 2014 Monmouth College graduate to fill one of the best full-time, entry level positions I have ever witnessed in my 20 years of teaching business classes at universities and colleges across the country and continent. If you click on the second of the two links provided above, you will see an attentive young man with his hand on a notebook computer sitting in the front row. That young man is George Burnette, a 2014 graduate of Monmouth College. He is now employed at ENFOS as a Software Business Consultant/Analyst. His starting salary is one of the highest I have ever seen an undergraduate business student land (and I believe he is also eligible for bonuses based on his involvement in business development/sales-related activities). This position also provides George with extraordinary potential to gain invaluable, cutting edge experience with a firm growing at a rate of around 30-35 percent per year providing valuable services to some of the largest companies in the world. George was not at the ENFOS office in Naperville—and thus not in the picture in the article accessed via the first link above—due to the fact that he was out on his first client visit—with a major energy firm on the East Coast—the day I was there.

I have so far tried to address the importance of entrepreneurship and small business and our efforts to support entrepreneurial activity here at Monmouth College via the examples and links above. That leaves me with one—related—key issue to cover: Value in Education.

Value is a big topic in the classes I teach here at Monmouth College; and was featured heavily in the two strategy capstone classes mentioned above as well as in the Midwest Entrepreneurs class.

Value is what a customer/client perceives to be receiving from a good or service provider considered in relation to what they have paid; i.e., “what you get for what you pay.” All too often, people erroneously confuse “value” with price and assume that low price correlates with “high value” (and that higher priced goods or services are necessarily of “lesser value”).

A recent Monmouth College webpage article—citing recent Money magazine data—strongly suggests that we here are providing students a “high value” education.

http://www.monmouthcollege.edu/information/newsEvents/newsDetails.aspx?Channel=%2fChannels%2fCampus+Wide&WorkflowItemID=b14718fa-73f7-4e4d-b622-f622dd143202

Quoting from the article:

“Monmouth College appears in the top 15 of two listings on Money magazine’s new college rankings, released earlier this week. The magazine named 665 ‘Best Colleges,’ with Monmouth ranking No. 14 in the Most Affordable Private Colleges category and No. 15 in Colleges That Add the Most Value.

‘Receiving a high ranking in these two categories reflects positively on what we consider two of our areas of strength,’ said Monmouth College president Clarence Wyatt. ‘Through a strong experience in the liberal arts and sciences, we give young people the opportunity to become lifelong learners who are flexible and employable, while also making it possible for students from all economic backgrounds to attain a top-notch private liberal arts education. These rankings, which are based on public data, serve as evidence that we are consistently providing opportunity and accessibility better than almost all other colleges in the nation’.”

 

I see the case of George Burnette as the perfect example of the high value of a Monmouth College liberal arts education; and I say this based on 18 years of experience teaching within business schools at non-liberal arts institutions prior to arriving here in 2012. George, like other highly motivated Monmouth College students, graduated as an extraordinarily well-rounded person capable of performing important strategic tasks for potential employers.

Being well-rounded—as the liberal arts experience here allows one to be—provides the student not only with the background and perspective needed to land positions like the one he did at ENFOS but also the diverse background and perspective needed to be successful long-term; in both one’s career and in life. Much the same can be said of Roger Well ’86; who majored not in business but in Geology (then later earned an MBA).

In closing, let me try to “bring this back around” to entrepreneurship and our efforts to support entrepreneurial activity here at Monmouth College.

The company that hired George Burnette ‘14—and the three summer interns—is an entrepreneurial firm co-founded by a Monmouth College graduate (Roger Well ’86). In my 20 years of teaching business classes at the undergraduate level (in California, Tennessee, Missouri, Arkansas, and Mexico), I have personally seen but one other company—Arkansas Best Freight/U-Pack—provide students and graduates with a higher volume of meaningful employment and experience than ENFOS. Arkansas Best Freight/U-Pack hired roughly two dozen of my students for full-time positions and internships over the course of a seven year period. ENFOS hired four students—one full-time and three interns—after but one semester of interaction. I am personally aware of no other company of any size matching what ENFOS has done in this regard over any period of time.

Lastly, endless thanks to Roger Well and the others involved at ENFOS for working with me and the students here last semester. Thanks also to Monmouth College’s Steve Bloomer and Marnie Dugan for bringing Roger Well and I together in the first place (as part of the College’s Alumni Distinguished Visitors Program); this would not have happened without you.

I hope to be doing much more of this “win-win” sort of thing—class projects meaningfully benefitting students, alums, and employers—in the near future. I am always open to ideas for entrepreneurial and other firms looking to be involved.

Regards,

Prof. Gabel

 

 

An Extraordinary Entrepreneurial Opportunity: The Shops of Monmouth Retail Business Competition

Last night I attended a preliminary informational meeting for sponsors of The Shops of Monmouth Retail Business Competition at Market Alley Wines (http://marketalleywines.com/) here in Monmouth.

I went as a result of recently hearing of a few details of this Competition. I was interested in finding out more (and thought that as a professor who teaches an entrepreneurship class here, I might be able to steer a few prospective entrepreneurs toward the Competition).

I was blown away!

I knew the gist of the nature and objectives of the Competition going in… This is a program designed by the City of Monmouth to provide incentives to entrepreneurs to locate—or relocate—their retail businesses to Monmouth, IL.

What blew me away was the level of organization and, most notably, the incentives being offered. Quoting from the Competition’s webpage (http://shopsofmonmouth.com/index.php/retail-awards).

“There will be three competition winners. Each will receive:

- Up to $5,000 in free commercial rent

- $2,000 cash to go toward build out/improvements

- Local broadcast advertising with Prairie communications (value: $500)

- Local print advertising with the Daily Review Atlas (value: $500)

- 1 year free URL, website hosting and Joomla CMS install (value: $250)

- Professional Joomla template and basic site set up (value: $400)

- Professional logo development through DesignCrowd (value: $300)

- Facebook business page setup

- Monmouth Business Council after-hours event at your new business

- Spring ’15 intern from Monmouth College for 10 hours per week

- Frontier will offer free Install on standard Business DSL and up to 2 phone lines, a 50% discount on the 1st 3 months of local phone service & DSL service and a 15% discount on a Mitel or Avaya phones or phone system (value: up to $500).”

WOW!!… That first point is a big one… $5,000 in rent goes farther than you might think here in Monmouth; possibly up to six full months.

And there is even more… Competition participants will attend a Retail Innovation Workshop wherein they will be guided through “the ten important steps to turn that great idea into a business reality.” Further: ”This proven program will help you realize your true potential as a retail entrepreneur and help you get the results you want. The Retail Innovation Workshop provides tools to help you define the value proposition, set revenue goals, analyze the market, and identify the competition.” See http://shopsofmonmouth.com/index.php/retail-seminars for further details.

As I said to Paul Schuytema—the Competition’s primary organizer—and several of the sponsors last night: “This a great opportunity for someone ready to start a new business or wondering if they are ready to start a new business.” With the incentives being offered, anyone with any fears of starting a retail business up in Monmouth might just have had their risk significantly reduced.  Of course, as I always stress in Midwest Entrepreneurs (and other classes), entrepreneurial success is predicated first and foremost on (1) having a product that there is sufficient demand for, and (2) focusing on continual customer satisfaction. The incentives do not ensure success; they reduce inevitable start-up risk and enhance the probability of both short- and long-term success.

So… If you are thinking of starting up a retail business or know of someone who is, this Competition may be just the thing you or they need to get up and running and on the path toward entrepreneurial success!!

Further details on the Competition as a whole can be found at its main webpage: http://shopsofmonmouth.com/index.php/retail-business-competition-main.

Finally, thanks to Paul Schuytema and his wife Susan—proprietor of host Market Alley Wines—for a very informational and enjoyable evening!

Regards,

Prof. Gabel

PS: Although school is out for summer here and the Midwest Entrepreneurs class is not offered in the Fall semester, I plan to provide periodic updates to the blog as entrepreneurial events and other happenings come to my attention.

3D-Printed Entrepreneurial Passion: The Early-Stage Story of Mike Acerra and His Toys

Our 22nd and final guest speaker of the soon-to-end semester brought many things to the Midwest Entreprenurs class that students had not seen or expereinced throughout the semester. These “new things” included an operational 3D-printer, prototypes of innovative new toys, a fascinating and at times chaotic early-stage (i.e., still in fluid development) entrepreneurial story, and fervent, unbridled entrepreneurial passion.

Five to ten years from now, we may be looking back on this as a brief glimpse into the early thoughts of a very wealthy and influential toy magnate. It would not surprise me if the students in the class will be buying the toys we saw in prototype form for their own children!

I turn the blog over to class member Chase Bair to tell this captivating early-stage entrepreneurial tale.

Prof. Gabel

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Mike Acerra (of Acerra Studios), a graduate of Knox College with a BA in Studio Art, is in the process of starting up a new business in nearby Galesburg, Illinois. Acerra Studios will be printing 3D toys with the launch of his business in the summer of 2015.

Growing up every kid plays with Legos and other “building block” toys. But these toys can’t be manipulated into spheres and other shapes. As a child, this upset Mike Acerra.

In college Mike taught himself what he enjoyed to do. He started out as an engineering student. Although pursuit of the engineering degree was eventually abandoned, we saw in class how this strong techniccal background today plays an important role in Mike’s ongoing entrepreneurial story. He designs his toys on the computer and prints them on a 3D-printer, which he brought to class and actually used to produce a small part for one of his toys.

The current business idea got formally started around 30 years ago while at Knox College when Mike got into studio and performance art. And since that day this idea has been building into what it is soon to become; a line of science-based toys that can be moved into shapes and do many things that no other toys on the market today can.

Mike spoke extensively about his inspirations. While in college Mike became fascinated with R. Buckminster Fuller. Fuller was an American architect, systems theorist, author, designer, inventor, and futurist. Mike was especially interested in the numerous inventions, mainly architectural designs, and the widely known geodesic dome that Fuller produced. These shapes and designs are what lead Mr. Acerra to make this new and improved toys.

Currently Mike has one employee and is hoping to get an intern from Monmouth College. In the future Mike wants to expand his business and grow into the northern cities. He also wants to eventually make his toys motorized.

Coming to Galesburg in the summer of 2015! Acerra Studios producing 3D toys; something that Mike Acerra hopes that every kid comes to need!

Chase Bair

 

Cutting Edge Industrial Fabrication (and All That Goes With It): Dan Bentz of Fusion Tech

A fast-growing, family-owned high-tech metal and stainless steel fabrication operation was the focus of our last Midwest Entrepreneurs class.

Another amazing example of amazing entrepreneurial activities right here in our own backyard (in the middle of a corn field off an asphalt road)!!

Today’s class blogger is Nikki Hurt. Below, she recounts the ongoing entrepreneurial success story of Roseville, IL-based Fusion Tech (as told to the class last Thursday by company General Manager Dan Bentz).

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Dan Bentz, the general manager of Fusion Tech, was our guest speaker on 4/24/2014.

Fusion Tech provides metal and stainless steel fabrication services in every step from design to installation. Their clients include: food, food processing, transportation, renewable fuels, and agricultural industries. They also do small individual projects like signs, handrails, counter tops etc.. They handle materials like carbon, aluminum, stainless steel, rubber and more.

Dan’s father had a blacksmith shop in their local hometown in Iowa. Dan and his brother worked at the shop learning about fabrication early in life. He moved to Kansas City, Missouri and went to college earning a degree in Business and Industrial Technology.

In 1997, Dan’s brother and his father started Modern Engineering and Piping in Roseville, IL. His brother inherited a two car garage and 88 acres of land when he married. The business only had three employees at the time. They tore out equipment and put in new for their clients. They wanted to start making their own products because they were having too many problems with the current ones they were installing.

In 2001, Modern Engineering and Piping put in their first shop. They hired more people, serviced more, worked seven days a week. Dan’s brother wanted him to come work at the family business.

In 2003, they got their first abrasive water jet to do their own cutting. Dan came around and joined his brother and father in 2004.

In 2007, The Company introduced another side to the business, Fusion Tech. Fusion Tech dealt with designing projects for customers, while Modern Engineering and Piping handled the servicing side. By this time they had 30 employees. They eventually bought out Modern Engineering and Piping and all became known as Fusion Tech “The One Stop Shop”.

In 2013, the family-run firm gained a 1.3 million dollar contract with a company they had previously lost due to lack of having a laser jet. At this time they now have three laser jets and two water jets. There are 85 employees.

Dan expressed that they work on big projects, but still do small ones as well. The big projects that earn large sums they do not get right away. He said it usually is paid “40-40-20”: 40% down immediately, 40% at time of completion, and 20% during the installation process. They have to do small jobs to keep the lights on and function (because the large ones require such time and effort to complete). Around 10 employees work on the large projects, and the other 75 handle the small ones.

Fusion Tech, unlike some of our other guest companies, do indeed believe in using banks. A small business needs capital. They used the local Raritan bank for 5-6 years before outgrowing it. They search different banks when looking to purchase equipment for the best interest rates.

Mr. Bentz led us through a summary of the many services Fusion Tech provides to its clients.

Drafting is there #1 thing they are known for and is a great sales tool. It shows a 3D model of the product Fusion Tech is going to produce. This takes a specific person to have the skill to perform drafting and it is time consuming.

Milling- This entered Fusion Tech into the machining world. The return on investment purchasing a milling machine was better than outsourcing. This also created convenience for their customers.

Drafting and milling are main two services provided. However, many others are performed as well. These include: CNOC and Lathe, Brakes, Roller and Bender, Saw Cutting, Spot Welding, Mig Welding, Tig Welding, and Trucking (transporation of finished goods to client operations).

Fusion Tech also uses an Industrial Laser Marking System for all the equipment they produce so they can use it to find products later on (as well as tools, equipment, materials etc.). They also use access databases and excel to organize jobs.

One of the most important issues for the company in recent years has been to attain ISO (International Standards Organization) Certification. In the eyes of clients (and prospective new clients, particiularly big ones), this certification means that Fusion Tech follows precise standards and performs high quality work. This ensures they hold safety rules and regulations high. It allows them to get into big name food companies that they otherwise wouldn’t be able to without the certification.

Recently, the company branched out and created Stainless Reflections, a company that specialized in monuments, head stones, statues, and memorials. This wasn’t as successful as Mr. Bentz thought it would be but has been a good opportunity for the company to learn from its mistakes. “If you’re not making any mistakes, you’re not doing anything different,” he told the class. “Don’t do the same thing twice.” You must try something or you won’t know the outcome.

When asked by a member of the class what the firm’s biggest competitive advantage is, Dan replied ”our people.” They are talented individuals. They do what they have to do to get things done for clients and to respond to the changing marketplace.

A lot of quick decisions and being able to think on their feet led to many new customers, opportunities, and overall company growth. Working with the customer is important to build lasting relationships and customer loyalty. Don’t argue, just get it done and make it right if you mess up. Making the customer happy is your job and is important for the company image.

Nikki Hurt

Like a Good Neighbor, Jon Ferguson Was Here

Our guest Tuesday in Midwest Entrepreneurs class was local State Farm Insurance Agent Jon Ferguson (http://www.jonferguson.com/).

While one may not think of an insurance agent as an entrepreneur, it was clear by the time that Jon was finished with us that what he does to best serve his clients and otherwise run his business as effectively as possible has much in common with how more traditional entrepreneurs go about achieving these same core goals.

I now turn things over to class member Zariah Gaston to tell the entrepreneurial-like (and family-business-laden) story of Jon Ferguson.

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Jon Ferguson, a State Farm agent located in Monmouth, who is an alum of Cornell College (Iowa), was our guest speaker on April 22, 2014.

Mr. Ferguson’s father was an insurance agent as well. In fact, he has been surrounded by them throughout his life. Moreover, his wife was an agent, and his two brothers are agents.

In college, Jon majored in Economics. After college, he started with State Farm in Lincoln, Nebraska. Later he moved to Minneapolis, Minnesota, continuing his work with the firm.

Due to the limited bonus advantages, he decided he wanted a franchise of his own. When deciding on a location, Ferguson chose Monmouth, Illinois. Here in Monmouth he is the only agent in throughout much of the region. He is able to work in both Warren County, Henderson County, all of Illinois, and Iowa.

John Ferguson inherited a “book of business” when he started here in Monmouth over a decade ago. He also inherited two staff members. He later fired one and hired someone else. He stuck with consistency and his other original staff members still work there today. He makes sure his employees are comfortable at work and in their lives outside of work. He gives them daily tasks in order to meet quota. Like we have heard from other speakers this semester, it seems that for Jon, one of the keys to success is treating employees well.

Most of his business comes for auto insurance. Moreover, it is 85 percent of his commission and 65 percent of his business. Although he loses 15 percent of business in auto, it is mostly because of the fact that people are moving or downsizing. The fact that he is the only agent in Monmouth gives him an advantage. He states he is “driven by sales and money.”

Zariah Gaston

In the Right Place at the Right Time (and More): R.W. Young & Associates, Inc.

Our guest speaker on “tax day” 2014–Tuesday 15 April–had at least something indirectly to do with taxes; local real estate appraisal entrepreneur Robert W. Young (accompanied by his son and business partner Durkin Young).

Prior to class, few students realized the nature or need for land appraisal; a critical service called for any time there is a transfer in the ownership of land. By the time the class had ended, much had changed; although the complexity of what a land appraiser does–and how they have to be certified and trained–led to what was learned being a bit overwhelming to fully comprehend given the short time frame.

One general theme that has been heard more than once this semester is “being in the right place at the right time.” In the case of Robert Young, this meant a surprise promotion in his first post-college job which provided him a crash course in the highly valued yet rare skills that he today uses to run his own highly successful entrepreneurial business.

But there is much, much more than ”blind luck” to this ongoing success story…  A story told nicely below by today’s student blogger Matt Homscheid.

Prof. Gabel

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Robert Young, born in a small town just outside of Roseville, is the owner of his real estate appraisal company, R.W. Young & Associates, Inc.  Robert, his son, his wife, a secretary, and a student here at Monmouth College work for this small company appraises land within the 10 neighboring counties of Warren County.  His company appraises anything from housing to farm land to land for the Illinois Department of Transportation.

Growing up on a farm, Robert worked vigorously and constantly.  However, because he was challenged mechanically, he couldn’t stay in the farming business no matter how much he loved it.  So he made sure to take away one thing from farming, “hard work pays off.”  This being said he worked constantly from elementary school all the way up to the end of college.  Into his senior year in college he had a summer internship working with the Federal Land Bank (FLB).  Here he picked up skills working with people and appraising land for farmers that were looking to sell or buy the land.  Before graduating college he was offered a job to work for this company.  Robert was set upon graduating because he had a job right away.  Upon starting his job at the FLB, he noted that the price per acre of land was around $2000 and within a few year after that the price doubled.  But, due to the economic downturn, the government raised interest rates on the farm land, driving the price per acre back down to $2000.  This dramatic fluctuation in land values had takne place in a matter of a few short years; something Mr. Young learned early that is always possible in his business.

With the stress of inflation, pricing changes, and customers getting rather enraged by the appraising (a constant in the business), Robert’s boss at the FLB became extremely stressed causing him a heart attack.  Needless to say his boss stepped down, which put Robert in the number one spot. In this new position, with the economy as it was, Robert quickly became what he called “the collector of loans instead of the loan maker” (due to a large number of foreclosures and bankruptcies).  Fresh out of college, still young, this was a very hard position for him to fill.

After several months of going to court and dealing with enraged customers, his employer offered to pay him seven months’ severance.  He accepted the offer and decided to start his own business, R.W. Young & Associates, Inc (utilizing the skills he learned quickly and by surprise as a result of being thrust into this high position at the FLB). 

When starting his business, Mr. Young asked his former boss to join him in his company, but in this case, his boss would have a very low stress level position.  Robert had heard that the Illinois Department of Transportation (IDOT) was looking to get the land between Monmouth and Burlington, Iowa appraised to continue building Route 34.  He took the initiative to send a letter to Peoria informing them he could be of great assistance.  Within only a couple days, someone was knocking at his door asking for an appraisal of the land on which they’d be building.  This started him off on a good foot because it lead to him working consistently with the Illinois Department of Transportation, a huge consumer of appraisal services, in the neighboring counties.

After a few years of working, Robert’s former boss had to retire due to the circumstances of his heart attack earlier in life.  This led Robert into contacting someone in Galesburg, a small competitor, and bringing him into his business.  This is what expanded his business into the ten neighboring counties instead of the original three he had started with.  With business being so vast, he decided to ask college students to come assist him in his business.  The students worked on computers and with spreadsheets creating a list of numbers for the appraisals he was doing.  He’s had roughly a dozen or so students come in and help him with his business.  One of the biggest things he covers with his business is inheritance taxes on properties when someone in the family passes away.  Because there is a loan involved in most inheritance properties, it requires an appraisal and Robert is always the one to be there if he isn’t too busy at the time.

To become someone of his stature, one needs to get a college degree, get certified by the state of Illinois, and have over 3,000 hours of experience in order to gain the title of “Certified General” like Robert Young.  Robert is known very well for his appraising abilities in the 10 counties around Monmouth.  He will take on mostly farm and income land appraisals because that’s what he knows best.  Due to the nature of his business, he isn’t able to charge customers by the value of the land, so he instead charges people by the acre.  He does give discounts to customers so that they are able to save large amounts of money on taxes for their purchase.  It will take Robert anywhere between 60 and 180 days to come out for an appraisal.  This is dependent on whether the customer is a residential or farm land customer or the state.  The residential or farm land customer will take around 60 days to come out with a full appraisal.  State jobs, because they are bigger, take around 180 days.  The land or property that needs appraising must be done by someone that is certified by the state or it isn’t a good appraisal.  Robert rates the land based on the soil productivity and puts it into different classes ranging from “A” to “D.”  “A Class” is the top notch soil for farmers, while “D Class” isn’t worth as much, somewhat less than half of “A Class” per acre.

R.W. Young & Associates, Inc. is a business that is promoted almost exclusively by word of mouth.  The only formal advertising that Robert does for his business consists of putting his business contact information in a plat book that local farmers look through to either buy or sell land.  The bankers and farmers are the ones that will see his information and contact him for an appraisal.

To finish strong, Robert said that he was “in the right place at the right time or [had] just dumb luck” to get his job and business going and started on the right foot.  Obviously, there is much more to his success than this. To make sure we took one thing away from this, he made sure we knew and understood that “hard work pays off.”

Matt Homscheid

Bar Rescue to the Rescue: A Horse Walks Into a Bar in Midwest Entrepreneurs

Yesterday the eventually inevitable occurred…

With a class structured around guest speaker presentations by practicing entrepreneurs, it is inevitable that you will–for any of hundreds of plausible reasons–have a day or two with no speaker. This is what happened with yesterday’s class.

But I had a backup–sometimes called in classes a “contingency” or “recovery”–plan…

I had been thinking for some time that showing and discussing a carefully selected episode of the Spike TV program Bar Rescue (http://www.spike.com/shows/bar-rescue) would make for a highly relevant and entertaining class meeting.

If you are not familiar with Bar Rescue, the series stars consultant Jon Taffer, a no-nonsense former bar and nightclub owner who has owned, flipped, or somehow “rescued” over 800 such businesses in his career. Taffer and his crew of expert bartenders, chefs, and designers is brought in by bar owners–entrepreneurs–to save their declining and often severly neglected and dysfunctionally run businesses. After a period of surveillance and consultation and training meetings, Taffer brings in local contractors and other service providers to renovate and update the facility (based on his extensive bar/restaurant marketing and management expertise).

I had for some time had one particular episode of Bar Rescue in mind for the class. Entitled “A Horse Walks Into a Bar,” it dramatically features the best and worst of entrepreneurship as portrayed on the show; a family business, drunken owners who seem to have given up, a young bartender daughter who seems to be the only person able and willing to save the business, pending foreclosure, over-pouring of alcohol and other rampant waste of resources, incompetent employees, poor customer service, lacking quality control in the kitchen, and a motorcycle and a horse–and, yes, horse poop–in the bar. But there is more… Tapper steps firmly in and, after an initial meeting that one of the intoxicated owners openly admits she did not remember attending and the abrupt departure of a poor-performing bartender called “Yum Yum,” turns things around and gets the family and their employees to fight for and at least temporarily save the business; all in four days of frantic and emotional activity jammed into 45 or so minutes of captivating–and in our case educational–reality TV entertainment.

The full episode can be seen at:

http://www.spike.com/episodes/nfs61t/bar-rescue-a-horse-walks-into-a-bar-season-3-ep-309

I now turn things over to today’s class blogger Cody Whiteside. Below, Cody does a fine job of capturing what was learned when Bar Rescue came to the rescue of the Midwest Entrepreneurs class.

Prof. Gabel

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Rather than a traditional speaker, this class was centered on an episode from the Spike television show Bar Rescue, led by bar consultant John Taffer, mixologist Russell Davis, and chef J.B. Brown. Taffer took Arizona-based Kid Chilleen’s Badass BBQ and Steakhouse and turned the bar around in four days to help contain $180,000 in debt and avoid a bank foreclosure. By seeing a failing business, we get the other side of the story compared to our success stories from each of our speakers. This episode taught us what not to do and what to look for to turn a business around.

With the business being located off of a main interstate, most of the customers come from the highway traffic. What not to do was a theme of the failing business. No signs on the highway to attract customers, owner’s drunk while running the bar and giving away alcohol, poor outside lighting, and a glaring lack of control over both costs and employees was just a start to the long list of the ills of the failing business.

John Taffer came in and changed the atmosphere, layout, and attitude of the bar and the employees to save the family business. His first point of emphasis was that every successful bar owner doesn’t drink while on the job. He then led into what will attract the customer, keep them satisfied, and make them want to come back. He advertised on both sides of the interstate, changed the décor of the building to appeal to the customers eye, which included a lighted sign and parking lot, and engineered a new menu. The key to the menu is to box in the highest profit contributors, and shadow the second highest profit contributors. This draws the customer’s eyes to the best dishes in the restaurant, but also what will make the company the most money as well.

Professional bartender, Russell Davis, trained owner, Scott, and daughter, Aleah to the tricks of the trade behind the bar, and offered new, themed drinks to introduce to customers. He introduced moonshine as an option for the bar, and even a non-alcoholic drink for owners Scott and Donna to drink while on the job and still socialize with the customers.

Professional chef and barbeque expert, J.B. Brown, took the kitchen by storm and introduced the staff to real smoked barbeque. Authentic barbeque will keep customers coming back for more, while according to Taffer, 90% of barbeque restaurants across the country simply cover their baked food in sauce, rather than do what is necessary to produce real smoked barbeque dishes.

By seeing the hardships of a businessas we did in this episode of Bar Rescue, we can get a better understanding of what it takes to be able to be a well-rounded entrepreneur.

Many entrepreneurs face many obstacles and headaches of a business, but usually the biggest problem isn’t the owners themselves. In the case of Chilleen’s, the owner’s had to get themselves out of drinking problems to save their family business. If they can stay sober while running the bar and restaurant and otherwise stick to Taffer’s turnaround/rescue plan, they have a very good chance to get out of debt and turn their business around.

Cody Whiteside

 

Mary Kellogg-Joslyn: A True Transformational Leader On the Path to the Perfect Titanic Experience

Our guest last Thursday in Midwest Entrepreneurs class was Mary Kellogg-Joslyn, the 2014 Wendell Whiteman Memorial Lecturer.

See the stories at the two links below for details on both this annual event and Ms. Kellogg-Joslyn’s amazing career.

http://www.monmouthcollege.edu/information/newsEvents/newsDetails.aspx?Channel=%2fChannels%2fCampus+Wide&WorkflowItemID=0d747077-49fc-4bc7-99fc-4bdbd944052d

http://www.monmouthcollege.edu/information/newsEvents/newsDetails.aspx?Channel=%2fChannels%2fCampus+Wide&WorkflowItemID=8295f110-6bdd-4c33-8897-c03cd348e9a4

 

As Claire McGuire, the class blogger for this special event discusses below, Ms. Kellogg-Joslyn has both ”made it big time” (in a variety of ways) and led by example all along the way.

After Claire’s blog entry, I offer some additional insights on (1) the marketing of experiences, and (2) Transformational Leadership (and the importance of “leading by example” to build and inspire trust).

Prof. Gabel

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Mary Kellogg, born and raised in Monmouth, had made it to the big time; first in the corporate world and now as an entrepreneur. Today, when she gets asked ‘What do you do?,’ she always thinks it is a bit odd to say “I own the Titanic” but that is indeed what she does.

After graduating from Monmouth High School and attending Colombia College in Chicago, Mary worked at CBS where she was the executive director of marketing and programming for 10 years before moving to The Walt Disney Company.  She became the executive Vice President of television for Disney and held this position for 20 years.  It was at Disney where she found out that advertising price does not work as well as advertising the experience. She took this lesson, and many more, from Disney and brought it into her own business.

After the 20 years with Disney, Mary joined her husband John for their present entrepreneurial venture. John personally worked on recovering artifacts from the real Titanic and now owns many of them, which are displayed in the two Titanic Museums.

With their facility in Branson, MO being on “the strip” of tourism—with about five to six million people passing through a year—Mary and her husband thought this would turn out to be a big hit (the good kind of hit).  She didn’t want this to be just a regular museum; she wanted it to come to life.  They agreed to build the ship half scale to the original and “back to the second stack.”  When making this place come to life, they hired a cast of 110 employees to make the experience as real as possible. They take stories from real people and families and recreate them.  Before the actors go out of the doors to start the day, they see a sign that reads “You are now entering 1912.”

“What keeps people coming back is the quality of experience they receive.” To get the complete experience, it takes a lot of work.  Mary said that they value the education of their employees and the education within the company.  There is learning happening all day every day.  The company offers a Titanic University program, which is ten days long and at the end, the employees are given a test. Etiquette lessons are also given to make sure that the employees are acting as they would back in 1912; all to make it a complete and authentic experience for visitors. When talking about education, Mary stated; “We consider the managers as coaches because they are always educating the crew.”

Instead of thinking about only guests/customers “first,” Mary said that it is also important to think about her employees “first.”  “If we give our employees respect, an education, teaching, and care for their families, then we can trust them to treat our guests well and give them a desired experience.”  It is also very important to listen to what the crew has to say.  This builds trust and, according to Mary, without trust, it will be very hard to move forward.

Since the museum in Branson turned out to be such a big hit, they went to Pigeon Forge, TN and opened another attraction.  Mary is in charge of developing and coordinating marketing, advertising, sales, public relations and merchandising strategies of both Titanic locations. In being a leader of both of these operations, she says “Anybody can do a task, but it is important for our crew to understand why we are doing it this way.” A leader’s job is not to chew people out for doing things wrong, but to call them in and tell them that they did not get trained the right way. She puts the blame on herself rather than the employee and seeks to help them continuously better themselves (so that, ultimately, the experience of the end customer is as perfect as possible).

In the future, Mary and her husband are thinking about finding another business, perhaps entertainment, because they need to do something in the tourism off season and would like a cash flow. They have had many requests to build additional Titanic museums in other locations in both the United States and abroad. They are currently giving serious consideration to at least one of these requests.

In the last few seconds of class, Mary said one thing that really stuck out to me: “In everything you do, you do with passion.” Mary Kellogg-Joslyn here, as it seems she always does, leads by example!

Claire McGuire

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Nicely done Claire…

I cannot pass up this opportunity to expand upon two issues touched on above; two matters not prominently featured in previous guest speaker presentations in the Midwest Entrepreneur class so far this semester. I discuss these issues below in the form of “two lessons learned” last Thursday.

Lesson Learned #1: The main thing being consumed with many service products is an EXPERIENCE. So… Strive to manage and perfect the experience and look for entrepreneurial opportunities to create better experiences for consumers.  

Although previous class speakers have seldom if ever come out and said “I market an experience,” many of them of course do. Creating and delivering memorable and interesting and otherwise satisfying experiences is something that service marketers behind tourist attractions–think Disney World–and themed restaurants–think Rainforest Cafe or Hard Rock Cafe or Jimmy Buffett’s Margaritaville–strive to do on a regular basis.

In class last Thursday, Mary Kellogg-Joslyn spoke of her 20 years of experience with Disney as first and foremost 20 years of “expereince marketing training.” This training–from as she put it, “the best” in the field of experience marketing–is what inspired her and her husband to build the Titanic Museums. This training is also what she uses on a daily basis to make the “Titanic consumption experience” as perfect as possible for the thousands of customers who visit their two locations each year.

Lesson Learned #2: There is a HUGE difference between being a “manager” and being a “leader.” Sustained entrepreneurial success and growth is more a function of effective “leadership” than “management.” Key distinctions between the two terms/roles include (a) the leader leading in transformative fashion (by positive example), and (b) leaders viewing their role as being founded about creating a trust-based organizational culture and helping employees continuously improve themselves.    

In my over 25 years of diverse experience in both academic and corporate environments, I have heard many marketing and management buzzwords be both mis-used and overused; a bad combination. Probably the most mis-used and overused–and thus ABUSED–of these buzzwords are “leader” and “leadership.”

Many managers call themselves “leaders” but are not. Equally flawed is the common assumption that if a person is in what is called a “leadership position” then this person is necessarily a “leader.”

Leadership is NOT simply telling “those below you” what do do and then expecting or formally demanding that they “obey.” Leadership is NOT attacking employees every time they do something imperfectly. These are fine examples of what is often called “management by fear” but “management by fear” is a far, far cry from leadership.

Last Thursday in class–and in a luncheon event I attended as part of Mary Kellogg-Joslyn’s Whiteman Memorial Lecture–I heard about the practice of TRUE LEADERSHIP.

For example, in class, as mentioned above by Claire McGuire, Mary stated that when an employee does something wrong at the Titanic Museum, she views it not as a failure on the part of the individual employee but rather as a failure on her part to not properly train or motivate the employee to perform better. I cannot think of a better example of “administrative accountability.” Further, when someone in a leadership position actively and conspicuously takes responsibility in this manner, it serves as an example of leading by example that serves to inspire and transform the behaviors of employees in highly positive fashion.

In both class and the luncheon event, Mary Kellogg-Joslyn made it very clear that at the heart of effective leadership is the creation of TRUST; trust between leaders and followers that inspires trust between co-workers. She also made it very clear in both events last Thursday that, in organizational settings, the antithesis of Trust is POLITICS. From a services and experiences marketing perspective, not only does gossip and other forms of “office politics” undermine all-important trust, they lead to the dysfunctional wasting of monumental amounts of time and effort; time and effort that would be far better invested in creating better customer experiences.

In closing, it is obvious to me that among the most significant keys to the phenomenal success of Mary Kellogg-Joslyn–both in the “big corporate world” and as an entrepreneur–are that she fully understands the (interactive) importance of both (1) focusing on the creation of memorable, satisfying experiences for customers, and (2) leading by example in transformative, trust-inspiring fashion when dealing with employees. 

Thank you Mary Kellogg-Joslyn for a refreshing and shining example of TRUE LEADERSHIP!!

Prof. Gabel

 

 

The Highly Improbable Entrepreneurial Story of Rod Smith and a-1performancewarehouse

Our guest speaker in class yesterday told an entreprenurial story that must seem to anyone to hear it for the first time as “highly improbable” at best.

Half a million dollars in sales of used racing car parts over ebay each year? To buyers all over the world? Thirty-to-fifty percent profit margins?

NO WAY!

Yes… I am here to tell you that it is all true… And essentially done out of a garage–and storage building–right here in Monmouth, IL.

It is the story of Rod Smith (ebay username: a-1performancewarehouse) and it is told below by class blogger James Wilson.

Prof. Gabel

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Rod Smith attended Monmouth College for two years before realizing that the school life wasn’t for him anymore.

After leaving, Rod went straight to work, living at home, and making a nice amount of money before deciding to work for Monmouth College as the grounds supervisor. While head of the “Green Army” here he also pursued his true passion; driving race cars four nights a week on dirt roads for fun.

After 22 years of service with Monmouth College and some work on the side buying and selling race car parts, he took the risk of leaving Monmouth College and turning his passion into an entrepreneurial business.

So in the summer of 2010, he began his business on ebay, selling used Nascar parts full-time.

Who would have thought that a man selling those parts out of a small garage in Monmouth could one day be one of the top sellers in the ebay market?

Working on this business with just his family (wife, sister, and his son), he occasionally hires a few interns from the college to help around and see the work he does. He stated that anyone can start a business on ebay, but it won’t be easy with ebay’s payment service taking a good amount out of their profit (and the fact that sellers now get taxed by the federal government if they have annual sales of over $20,000 on ebay).

For the last few years, Smith has had annual ebay-based sales of around $500,000 with profit margins on individual sales typically in the 30-50% range.

Smith now makes enough money selling used race car parts to buyers all over the world to choose his own vacation dates, which are usually each summer starting April 1st. . He also told the class that he basically spends the summers golfing; often with our very own Professor Connell.

In all, Rod Smith was able to make something out of what he loves. As quoted by Prof. Connell, “he made a living off his knowledge.” This goes to prove that if you know a lot about what you really love, and there is big demand for it, you can make a successful entrepreneurial business out of it.

So Rod Smith, former sprinter back in the day, and whose wife makes amazing steaks, is just a normal guy who went for his dream and has “hit it big”… out of a garage right here in Monmouth!!

James Wilson

The Evolution of the American Country Club and Managing in a Declining Market

Last Thursday’s Midwest Entrepreneurs class was different than most.

This is because our guest speaker focused more on “survival” than “growth” or “success.” While most entrepreneurs hope to not have to worry about merely surviving, far too many “close their doors for good” unnecessarily; that is, without first trying any of a variety of innovative means of staying in business.

This is just the sort of lesson learned in Midwest Entrepreneurs class last Thursday.

Today’s student blogger is Drake Decker. Below, he nicely captures the essence of the critical lesson learned via the captivating tale of ongoing struggle and survival shared with the class.

Prof. Gabel

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Our ‘guest’ speaker last Thursday was Monmouth College’s Professor Mike Connell who spoke on behalf of the Monmouth Country Club. Professor Connell served as the club’s President of the Board for nine years. Before getting into the specifics of Monmouth’s golf position, he first discussed the three ways to “sell golf” and how the market for golf is changing. He then addressed how his business, Monmouth Country Club, is adapting–to keep its doors open and survive–in the face of a changing (and increasingly challenging) marketplace.

Dr. Connell informed the class that there are three main ways that golf courses traditionally operate.

  1. They can be run as government owned, public courses where anyone can pay a fee to play a round.
  2. High demand locations in states such as Florida, Arizona, and California can support resort courses as tourist destinations where golfers stay and play.
  3. Lastly, some courses are private country clubs.

The traditional Country Club offers exclusive, invitation only memberships to a select group of people. Often times, there is a waiting list for membership. Members are charged an initiation fee, monthly or yearly membership dues, and any other fees that need to be paid to cover the club’s costs. These courses usually offer higher quality golf, dining, tennis, swimming, health clubs, and social events.

Country clubs especially thrived in the 1940’s, 50’s, and 60’s because people had the time to support this kind of lifestyle. These clubs were “the place to be” for professionals and members of “high society.” Business transactions often took place on club grounds, and country clubs served as the primary networking location before modern connecting platforms such as Facebook. The traditional country club existed as the foundation of a lifestyle that many people desired to live.

In recent times, however, country clubs are struggling as golf is decreasing in popularity and lifestyles are changing. This is particularly true here in the Midwest.

Country clubs were popular when golf was most prominent. There was a time when people of all ages and abilities enjoyed spending a whole day at the course. Professor Connell also argued that the “Tiger affect” increased fondness toward the game while Tiger Woods was dominating the sport at the professional level. Since Tiger’s era of dominance has passed, golf’s popularity has taken a hit.

Country clubs took advantage of the fact that their facilities were often the only golf course, pool, and social arena in town. These assets, combined with the desire to have country club status, allowed managers to “exploit the market.” Assessments (customers are billed a portion of the club’s losses for the year) were passed on to members in increasing amounts, and people got tired of paying, which decreased membership.

Another key factor that led to the downfall of clubs was the opening of public alternatives to traditional country club exclusives. Governments and park districts began to build municipal golf courses and public pools that gave community members an alternative to joining a country club. Some people chose to use these facilities instead of paying to belong to a club.

Possibly the most crucial factor that has led to the downfall of the traditional, “small town American” country club is a shift in lifestyle amongst a large segment of the population. This major societal change consisted of most people becoming busier with employment, children’s’ activities, and other, less time consuming activities. Parents are always on the go, attending activities. Women no longer have time to sit around the club and play bridge because they have become part of the workforce.

Golf is an expensive proposition, and it is an extremely difficult and frustrating game to play. This makes for a very low retention rate of people who start golf. Professor Connell explained that a very low percentage of people who purchase new clubs are still playing the game in five years. Also, golf has become too slow, too expensive, and too difficult for enough people to support country clubs.

Many courses have felt these affects, including several in the Monmouth area. For example, the class was told about a golf club in Nauvoo, Illinois being sold off at auction just last weekend. Its buyers will likely use the course as farmland, hunting ground, or another activity that has surpassed the demand of golf. Professor Connell suggested that it could even become a pet cemetery. Such “other usage” of golf course land is becoming increasingly common in the Midwest.

Monmouth Country Club (MCC) is also struggling to adapt to changing circumstances, but it is staying alive thanks to innovative and at times counter-intuitive changes in business practice.

MCC’s business model when Professor Connell became President of Board eight years ago was closely modeled after the traditional country club model developed in the middle of the 20th century. The club was prospering, hitting its maximum of allowed members at 300.

After the societal and psychographic changes mentioned earlier took place, profits took a turn for the worst. MCC hit rock bottom when its line of credit with the bank reached its limit. Thankfully, legendary local businessman John Twomey stepped in and helped the club. John became a volunteer manager and helped the club pay its debts.

A combined entrepreneurial effort from Mr. Twomey and Professor Connell revamped Monmouth Country Club and returned it to stability. Many changes made the comeback possible. These changes involve cutting costs and increasing membership.

The first decision that was made entailed closing the dining room and leasing it to an outside vendor for a low price. Instead of losing $42,000 per year operating a restaurant, the club was now receiving a small rent revenue.

The next major change was putting the pro shop on an honor system. Members could still purchase items from the pro shop even though there was not an employee tending the desk. Connell admits that people will sometimes take advantage of the lack of supervision and not pay for what they take, but the amount that people ‘steal’ is less than the eight dollars (twelve including taxes) per hour that an attendant would cost.

Dues were reduced from $1300 per year to just $800, which makes membership more attractive to a wider demographic. MCC is sacrificing exclusivity for affordability in order to increase its bottom line. This is necessary to keep the doors of the facility open.

Members also stepped up to help their club. Several members followed John Twomey and Professor Connell’s lead and have volunteered their time. Members chip in with maintenance by cutting grass. This eliminates the need for a greeenskeeper, once again decreasing total expenses for the club.

Upon further review of the dining aspect of the club, MCC decided to close the dining room. They have instead chosen to enter the catering and banquet hosting market. Individuals can now rent the club’s facilities for their events. The public can rent the clubhouse, the bar, the dining room, and the outdoor facilities to host events such as weddings and class reunions.

A final change that MCC has made comes in the form of course improvement. New greens were put in last year, and Connell and the rest of the board hope that improving their facilities increases membership and current member satisfaction.

The drastic changes that have taken place at Monmouth Country Club in recent years have saved the business. A total of 143 members currently belong to the club, 30 of which are “social” members. While the club is still losing some money, financial improvements are clearly taking place because the club was able to pay the bills for the past three years.

Overall, Monmouth Country Club is a great example that markets are constantly evolving and that, as a result, businesses must adapt, sometimes in order just to survive.

Drake Decker