Changing your Business Model-Monmouth Country Club

THE SPEAKER:  The Midwest Entrepreneurs speaker on Thursday April 14th was Professor Mike Connell.    His topic was approaches to keep a struggling small business open and his example was small town country clubs.  He has been the President of Board of the Monmouth Country Club (MCC) for six years.  He discussed the changing business model of country clubs.   Like many country clubs, MCC is a non-profit organization owned by the members. 

THE OLD BUSINESS MODEL:  Professor Connell started by reviewing the business model of the standard American country club that was developed in the 1930′s, 40′s and 50′s.  Membership was limited and there were often waitlists to join.  Would-be members had to be sponsored by existing members and there was membership committee that investigated and voted on new members – membership votes were not always positive (the black pea).  The new member paid an initiation fee for the privilege of joining the elite and elitist organization.  In additional to the initiation fee, members paid annual or monthly membership dues.  Most country clubs included services such as: a private golf course, a swimming pool, upscale dining services, tennis courts and a sauna.  There were regular social functions including card groups, dances and other parties.  Members were expected to eat at the club several times a month (minimum monthly food purchases); at many clubs members were sent bills if they did not patronize the restaurant frequently enough (charging people money for food that they did not eat is not an attractive business feature).  If the club had an operating loss for the year (which they frequently did), each member was sent an additional “year end assessment” to cover the operating losses — unexpected large year-end fees are another unattractive feature of this business model.  Club membership was often expensive and beyond the reach of most American households.  But many country clubs flourished because they were the best golf course in town, the best dining, and an essential place to make business contacts.  Small town social life and business deals often revolved around the local country club. 

A CHANGING ENVIRONMENT:  Over the years, American culture and the business environment of country clubs changed – especially in small towns.  Nice public golf courses were built.  Good restaurants opened.  Television and other entertainment options evolved to compete for limited entertainment dollars.  Local businesses were driven out of the market by malls and big-box stores — local business owners were usually country club members.  The population became more mobile and small town ways died.  Many country clubs including Monmouth Country Club struggled financially and some went bankrupt.  Most responded by raising dues and prices.  These price increases further reduced membership and revenues hastening the downward spiral. 

A NEW BUSINESS MODEL IS DEVELOPED:  Around 1998, MCC faced a financial crisis.  The operating loan was so large that the local banks could not allow the debt to increase further.  Foreclosing on a golf course is not a pleasant option for a local bank – the market of potential buyers is small.  Given the financial crisis, the MCC board concluded that the old full service, high dues, elitist model was outdated and doomed to failure in Monmouth, IL.  The MCC board decided to pursue a different market niche.  MCC concluded that it could not compete with local public course as the for the competitive golf dollar.  The board also realized that it did not have the power to force people to patronize the dining room and that the entertainment market was crowded.  First the MCC board lowered the dues and began to sell a new product service mix.  MCC began to focus on “family golf” — an uncrowded place where women golfers and children were welcome.  Pleasant evenings of family golf were the rule.  Many couples golfed at a leisurely pace.  Parents and children golfed together as a group.  Unaccompanied children were welcome during the day.  Membership at modest prices increased.  Expensive labor was eliminated in the pro shop and the dining room.  All food minimums and assessments were eliminated.  The restaurant was leased to private operators and the dining room was opened to the public.  At first, the pro shop was staffed with volunteer labor and later operated on the “honor system” with members voluntarily paying for the items they purchased or writing up tickets to be billed later.  A retired member acted as the business manager for a salary of $1.00 a year and another member kept the books without compensation.  While the new system did not earn high profits, it did allow MCC to maintain a private golf course, a private pool, and an on-site dining option.  Under this system, the operating loan was paid down but not eliminated. 

REFINING THE BUSINESS MODEL:  A year ago and additional tweak was made to the business model.  A local caterer began to operate out of the MCC kitchen facilities with food sales to members on three nights a week only.  MCC began to advertise that the clubhouse as available for rent to both members and the general public.  The clubhouse was open for weddings, class reunions, birthday parties, wedding anniversaries and private parties.  The board realized that the MCC atmosphere and convenience are its most marketable assets.  It has a pleasant atmosphere with a scenic view and a private bar and convenient handicap-accessible parking.  MCC invested in capital improvements to make MCC more attractive as a rental facility – new tables, additional chairs, dishes, linens, new restrooms, and a private dining room.  The business model is still evolving but early results are promising.  MCC has an affordable private, family friendly golf course and pool, and a limited social calendar of adult parties.  For the first time in fifty years, it appears that the dining room, clubhouse and bar could generate positive net revenue for golf course operations.  While some country clubs still flourish with an exclusive, high priced model, other small town country clubs have gone bankrupt and closed.  MCC has found a middle road.  While it is not flourishing as high-end golf and dining experience, it is open and viable in a different market niche – private family golf, private swimming pool and clubhouse rentals including bar sales.  

BUSINESS LESSONS FOR CLASS:  The world is a dynamic place.  Businesses must constantly adapt to remain viable.  New products and new strategies are often essential. Darwin said that his theory was misstated. It is not “the survival of the fittest” — it is “the survival of the quickest to adapt.”  Small town country clubs are not viable in a modern world of competitive entertainment choices.  The primary function of every business manager is to keep the door open by providing a service at a price that customers are willing to pay for — change is the only constant.

Randy Winegard-Southeast Iowa’s Premier Entrepreneur

Midwest Entrepreneurs traveled to Burlington, Iowa  to the headquarters of Winegard Industries. Randy Winegard is widely regarded as the premier entrepreneur is Southeast Iowa. He successfully grew a television antenna company his father started into a leader in satellite technology/receiving equipment, launched a successful golf course, numerous real estate developments, restaurants, hotels, entertainment venues such as Fun City, Catfish Bend Casino and many other companies. He believes a leader is someone who is humble, teachable, a good listener, and fair. He believes in rewarding his best people and trusting in good management. “I do not pretend to do all of our major deals or reinvent our manufacturing processes, but I believe in making steady improvement and rewarding those who do”.

Randy took great interest in the entrepreneurs in our class including Will Zimmerman. He asked Will to provide him with his contact information because he wanted to visit his new Grain Bin operation in Avon, Illinois.

Randy has been the President and CEO of Winegard Inc. for over 30 years, after taking the riens from his father when he was 29 years old. “I was given authority over the hotel complex next door after graduating from University of Iowa. I made a lot of mistakes. I did not know a lot but I listen to good people and I learned a lot. I continued that listening and learning into my ventures in other industries. I do not think I have had to go to work a single day in my life. I am passionate about what I do and showing up was never a chore.”

Randy provide a copy of Out of the Crisis to each student. Mr. Winegard believed Deming was brillant and inspirational to him in how to run his company. It changed the course of his life. He went to a seminar in 1984 with W. Edwards Deming. “I became passionate about the process and innovation connected with manufacturing. I do not believe America cannot compete with lower wage nations.  It is our job to find a way to reduce the cost or improve the process or product in order to compete.”

Check out the link for more information on Winegard Industries:

http://www.winegard.com/about/index.php

Kevin Goodwin-Life Sciences CEO attributes much of his success to his Monmouth Professors

Kevin Goodwin-Life Sciences CEO shared his story in Midwest Entrepreneurs class in the Library’s Barnes Electronic Classroom.  He also spoke in Dahl Chapel. Below is the review of his speech by Barry McNamara:

After hearing the Whiteman Lecture delivered by 1980 graduate Kevin Goodwin, perhaps Monmouth College marketing officials should borrow heavily from Motel 6 and use a “We’ll turn the light on for you” advertising campaign.

Goodwin, the president and CEO of SonoSite, Inc., a medical technology company in Washington, said a light came on for him during his sophomore year on campus, and he could even pinpoint the place.

“It’s been a long-held dream of mine to come back to Monmouth College to explain what happened to me here,” he told a large crowd in the Dahl Chapel and Auditorium. “Years ago, I had a CEO mentor tell me that what separated me from others was my curiosity. Sitting in that office, I thought, ‘Now where did that start?’”

The title of one his slides – “It all began at Monmouth” – answered that question. Come to think of it, that might be an even better idea for the college’s slogan.

“I was in ‘Intermediate Price Theory’ with Professor (Rod) Lemon,” Goodwin said. “We were learning how to manage a company. Up to that point, I’d been a pretty mediocre student. It occurred to me in that class that I didn’t want to be mediocre.”

Goodwin’s metamorphosis was immediate, and the effects ongoing.

“I got an A in that class, which started a run of 18 As and one B for the rest of my classes at Monmouth,” he said. “And since that time, I’ve never stopped looking to learn.”

Not only has Goodwin enhanced his business administration degree by learning even more about mathematics and economics, he has even studied Brazilian Portuguese because of the vast possibilities he sees in the South American country.

“My curiosity has continued to open doors for me,” he said. “I’ve had epiphany after epiphany.”

One of those epiphanies came while he was still at Monmouth, during his senior year. A member of the Fighting Scots baseball team, Goodwin had the opportunity to attend a lecture at Knox College with Professor Lemon, or to take batting practice with coach Terry Glasgow.

“I told Dr. Glasgow that I was going to attend the lecture, and he was very supportive of my decision,” said Goodwin.

Many good decisions have followed, including a conscious effort by Goodwin’s company “to specialize, to take care of its customers and to keep it simple.” The specialization, Goodwin explained, is in “point of care” ultrasound.

“We ‘democratized’ ultrasound and brought it to everyone,” he said.

The ultrasound industry experienced a positive shift in the 1980s, with the technology increasing to a high level. But there were still problems. Ultrasound machines were large (300 pounds), expensive ($200,000) and slow, requiring two to 10 minutes to boot up. When used in conjunction with emergency medicine, every second counts, and SonoSite’s seven-pound portable ultrasound machines boot up in just 13 seconds, at only one-fourth the cost.

Count the doctors on “ER” among the impressed. Goodwin showed a clip from the popular TV show’s 2005-06 season of medical staff struggling to treat a patient. The doctor played by John Leguizamo “saves the day” with a diagnosis from a portable ultrasound machine, causing Parminder Nagra’s character to simply say, “That’s very cool.”

“Think about careers in the life sciences,” Goodwin told the students in attendance. “It’s an industry with growth promise that is unstoppable.”

He also told them that “this is a great time to be an undergraduate,” and offered the students several tips, including:

  • “Find out what you’re passionate about. That stems from curiosity.”
  • “The tendency to be ‘always connected’ can actually detach you from reality. Be careful how you let technology use you.”
  • “You have to understand data. … Data’s driving everything. You have to be able to take data, make meaning of it and be able to say, ‘Here’s what the facts say.’ You’ve got to be comfortable with statistics.”

Goodwin, who was cited in the introduction as proof that business and science go hand in hand, said that Monmouth College is definitely on the right track with its emphasis on bringing those large disciplines together.

“Integrated learning is where it is going,” he told the students. “Intersecting business and science in your education is a great idea.”

Jump-started by a class he took in 1978, Goodwin’s battery has not had to be recharged.

“I still get up in the morning very excited to go to work,” said Goodwin, whose April 7 lecture coincided with the first day of his company’s 15th year. “It started here. I was vulnerable; as a student, I could have gone either way. I can’t say enough about the Monmouth College experience.”

Audrey Kabla-From Monmouth to Paris

Image of Audrey Kabla talking with students.
Audrey Kabla talking with students.

We all enjoyed listening to entrepreneur Audrey Kabla on Tuesday discuss her new start-up Epykomène in Paris, France. It wasn’t just her french accent and knowledge of French culture that kept us intrigued. It was her courage to launch an agency in the middle of a economic downturn in France. She was given what equates to 1/2 her expected annual salary as start-up funding from what we might call the small business coalition in Paris.
Epykomène is a new agency that specializes in marketing services for luxury goods. http://www.epykomene.com

Audrey left Monmouth College in 2004 and worked for Hilton and other famous brands after graduating with an MBA in luxury marketing from the Paris School of Business. She talked in depth about the thrill and peril of launching her own service business which is only three months new.

Being at MC opened doors to the international, Showed Audrey another way to consider business & marketing (more quantatatively oriented than the Paris Business School, used intense business plan & rigor at MC). Her international orientation from her experience at Monmouth was critical in finding an internship and jobs afterwards

What she learned at Monmouth that was the most useful for her was the Entreprenerism Capstone Business 406, incorporating a Business Plan course & Marketing Communication (BUSI 367) which was one very practical course that Audrey already had in France  but Her Monmouth instructors taught in another way ; treated the subject differently.

“It was truly the first time I experienced to live with people from another new culture. I had to adapt myself still keeping my French background. In Rome you live like the Romans. That’s what I did and that’s what works worldwide.

I did several internships and then had several positions in International companies such as: Christian Dior Couture, Barclays Bank, Hilton, Euphorie, Tellus, Gc…

Main positions were in marketing and sales: Dior Couture – marketing survey

Hilton Paris & Chicago – sales & marketing assistant

Euphorie – Creation department manager/supervisor

Met & contracted with big partners such as Ritz Hotel in Paris, Lancome, Decleor & Carita and very famous French boutique hotel such as 3.14, Hi, Hotel de Sers, Pershing Hall

Tellus – International sales & marketing manager  – travelling

Gc : International marketing/brand manager – travelling

And then, I decided to leave all this… to start with a new challenge  and create my company.

First, I knew I always had the entrepreunor fiber within me and knew I would have my small boutique hotel concept in a few years…. however I had no idea of the project externalization concept…

Came to me thanks to an opportunity in hotel & real estate I chose to take – I worked on this project 6 months before leaving my company and slowly but surely —-Epykomène appeared as the natural next step. I am one of those persons that get involved to 150% into projects and bored easily… when it’s not their own company – 2 years is getting bored… lol and it came to me that I could probably be a marketing manager for several companies at the same time if I could do for one. Wanted/needed to take a new challenge now that I couldn’t put off until later. I choose this because I want to work/move wherever I need to. I needed autonomy/ was not totally in a good place in my previous job.”

How I got there?

To prepare the best for this new challenge :

“I thought a lot about the challenge, put the pros & cons together like a thousand times

Bought and read around 20 books about entrepreneurship, consultancy & so on

Completed a market survey on advantages & disadvantages of entreuprenorship on Internet, inquired as to the best legal status to take in France compared to what I wanted to do and how I planned to grow.

Talked to people a lot, took appointments with friends that were entrepreneurs

Completed an analysis of the market and my potential competitors.

I announced my departure to Gc almost 7 months before going actually. I saved money away & received a little from the government which I live on right now.

I wrote a huge business plan that took me about 3 weeks to finalize, day and night. Complete analysis of the market, competition, product mix development, USP, Strategy, budget & profits…

I didn’t have a mentor but do not hesitate to contact my previous professors like Professor Capener & asked their advice.

I took some risks of course but not too many… I didn’t touch a lot of my savings and I gave myself a year of runway to see how it goes…. otherwise I’ll go back to work in a company.

I realized the risk I was taking and was very anxious at the beginning… didn’t sleep at night anymore and so on. But then, I understood that I really had to try because I had it in me for so long and it would be a way for me to be happier at work which I realized could not happen while I was working for others.

I had legal advice from several of my friends that are lawyers and from entrepreneurs like me. But we learn new stuff everyday… and have to be very rigourous and flexible. My business is a sole proprietorship for now and I would like it to remain the same. I do not plan on hring full-time employees, but I will actively engage people who are independent like me.  I will hire an accountant at the end of the fiscal year to check that everything I did was legal and correct and she/he will help me complete my tax declaration.

I work from home right now but spent most of my day in meetings with clients or appointments with associates & networking people. My headquarters is well located in the Paris 8 District.  I opened a professional account in a French Bank very well located in the 8th arrondissement. My start-up capital was 2500 euros and I spent 5000 in total… (website, company registration, business card, computer…). The money came from my savings.

What is my strategy ?

I do my own marketing but I prefer to do others so I depend mostly on referrals.

As I am in Luxury, so I have to be very selective & and work with niche products…as a result my marketing accounts are very small but detailed oriented. Quality over quantity

My goal is to build my agency as a Brand – emotional environment. I have a logo & a name both of them are trademarked. I value networking and Relationships !!

I plan to do a direct mailing 2 to 3 times a year to solicate new business. Bouche a oreille/ networking

Social networks – twitter, facebook, linkedin will be my primary focus.

My innovation/difference is in :

360°

concept

my youth – complete decalage from the consulting segment

external project management

Internationalization

My market is actually a very small niche : I talk mainly to small companies or entrepreneurs that work in Services or Luxury/upscale segment.

My goal is to develop the agency as a brand, that reflects who I am. The clients might like the concept or not but they are much more likely to retain my services after they see what I can do for them.”

We hope to bring Audrey back next year to see how she has done.