What do Dr. Dre, Owl City, Roberta Flack, and Styx have in common? From their individual music styles, one would be hard pressed to find a common denominator .My guess was they are all famous artists in completely separate music genres with huge followings. But all four artists are or were promoted and managed by Ron Spaulding. Ron is currently the President of Fontana Distribution, the music promotion arm of Universal. Universal Music Group is owned by Vivendi Entertainment http://www.vivendi.com/vivendi/-accueil-en-, a huge entertainment conglomerate based in Paris.

What does all of this have to do with entrepreneurs? Mr. Spaulding runs what I characterize as a venture capital firm for popular music. He sees hundreds of artists, promoters, music studio owners, and agents each quarter. He and his staff funded $26 million dollars of music and marketing resources for over 100 different groups. Fontana funds the promotion, distribution, and in-store display for both retailers such as Best Buy or digital content on i-Tunes.

What did Mr. Spaulding talk about yesterday? He stressed integrity, curiosity, embracing change, and straight talk. He developed his contacts as a retail buyer of music for Shopko Stores, and was involved with retailors such as JCI, MusicLand, and Best Buy in Minneapolis. One of his heroes is Howie Long, who asked everyday what he could learn, or how he could improve his performance on the football field. He said we all should be open and vulnerable to others ideas and new methods. He reads voraciously and his recommendations include Soar with your Strengths: http://www.amazon.com/Soar-Your-Strengths-Revolutionary-Philosophy/dp/044050564X/ref=sr_1_1?s=books&ie=UTF8&qid=1332945743&sr=1-1

An inspiring book for business managers and individuals on how to achieve the absolute best by focusing on strengths and steering away from weaknesses and The Seven Spiritual Laws of Success:http://www.amazon.com/The-Seven-Spiritual-Laws-Success/dp/1878424114/ref=sr_1_1?s=books&ie=UTF8&qid=1332945921&sr=1-1

Mr Spaulding begins each day reading the NY Times, WSJ, LA Times, and USA Today. He worries about the sense of entitlement with teenagers and college students. He believes you must earn and learn to move up and stay relevant. It is not enough to know the right people, or have the right toys. “Dreams are the most potent driver for success. You cannot achieve success alone so you need to treat people with respect. You have to exercise faith too”. He is very clear with expectations for employees and business partners. “Everyone on my staff can recite our sales goals and key drivers for Fontana’s success”.  

“I was so blessed to graduate from Monmouth College. I came from a background that did not encourage study at college or business as an occupation. It was a great leadership opportunity for me and I found out I did not want to be an attorney during my time here”. One of Ron’s greatest accomplishments was helping Hip Hop become a recognized music genre 15 years ago. His greatest challenge has been helping the artists and industry come back from the decimation caused by Napster and free file sharing. “We (the music industry) lost 50% of our revenues and the fight back has been grueling. I am proud to say Fontana has been one of the few profitable music publishers during the last four years with the growth of i-Tunes and digital publishing. Our international opportunities continue to grow and we plan to see exponential growth in the next 5-10 years overseas. The recognition that artistic material is intellectual property that deserves protection is growing in places like China. That means there is great opportunity out there”.

Spaulding majored in Government and Philosophy and was an ATO while here at Monmouth College. Part of his experience most valuable to Ron was his leadership opportunities. He served as President of the Pre-Law Society, Politics Club and ATO. Mr.

Spaulding has held leadership positions within the entertainment industry including Priority Records, Elektra Entertainment Group, and Warner Music Group. Fontana provides expertise and resources as the “best in class” operator for independent labels and artists crossing all music genres. His primary interests are golf, entertainment, motorcycles, new technology and business development.

Manufacturing is making a come-back in Western Illinois and Eastern Iowa and this is no where more obvious than outside Roseville at the Fusion Tech Headquarters. I was at their offices with my 24 students yesterday for a tour and Q & A session with Brandon and his senior staff.

There is a positive buzz in the air. Brandon recently annouced a major expansion with a new $2.5 Million Dollar facility and 72 new hires slated for the next 12-18 months. Fusion Tech evolved from a installation team approach for big companies such as BPI http://www.beefproducts.com/ to manufacturing their own brand of food processing equipment. Recently, Fusion Tech expanded its roster of major manufacturing clients to include John Deere, Case, and many other major exporters. Brandon estimated around $10 Million in annual sales but that projection shifts with the economy. Fusion Tech is a job shop that started on Kathy’s parents farm house garage in 1997. They specialized in quick turnaround of precision crafted machine parts for industrial companies but quickly moved into manufacturing. Their manufacturing philosophy is tied to the latest technology, but most importantly, the shifting needs of their customers.

One example of how far they have come is their current project with Hitachi Mining in Japan. They are making critical parts for the largest trucks Hitachi builds, parts that other job shops could not create cost effectively. “We turn around orders in weeks rather than the industry standard month or two”.

Fusion Tech has grown by word of mouth. They pride themselves on doing quality work with the latest tools. They demonstrated the water drills, lasers, and other machinery used in creating football field sized AC units, food processing air purifiers and handlers, and signs or precision parts created by their staff. The only thing Brandon mentioned that was a big impediment to even more hiring and greater profitability was the high taxes in Illinois. “Individuals need a tax break too”.

Brandon claims he spends less sleepless nights than in the past over worry he could get financing for the factory expansion or that his company was too focused on his largest customers. He started with only $200 and some tools in the garage. “Despite the fact that key employees and I spent 100+ hours on the job some weeks, I enjoy what I do– installing our products, and I realized that if I had not started this, 50+ people and their families would have to find work somewhere else. It was a dream that turned into reality over the last 14 years”.

Jim Hankes of Thrushwood Farms spoke at Midwest Entrepreneurs yesterday about his $3MM business in processing meats. Mr. Hankes opened his business in 1978 as a specialized meat packer, but has recently begun plans to double his capacity and square footage in his Galesburg plant. The growth has not been an “easy ride”. “The entire decade of the 80ies was very tough for us”. Jim was originally enthusiastic about the concept but did not start with a detailed business plan. “We wrote out a few things on a napkin, but we were not totally sure what we were getting into. Like every other entrepreneur, the lack of capital was a huge restraint to growing our business”.

Since 2001, the locally grown or produced food category has grown in popularity and Thrushwood has seen its business double or triple its size during the last decade. “We are now doubling down our investment in the finest machinery from Europe and the best facility and people we can afford to maintain the highest quality reputation”. That investment is beginning to pay off for Hankes and his two sons who manage the company. His biggest concern for the future is the increasing level of taxes and oversight by government bureaucrats who’s focus is finding problems to “validate their existence” .

We expected a 20-30 page report every few years from inspectors outlining what needed to be improved or fixed after each factory audit. Now those reports are 150+ pages and contains hundreds of mandated changes that equate to thousands of dollars of expenses that do not benefit our customers. All of this extra expense to satisfy regulators goes on the backs of entrepreneurs. “I am concerned what will be left for my sons with all of the taxes, regulated processes, and time and resources to accommodate and respond to factory audits.  Despite the worries, Jim is optomistic this decade will be Thrushwood Farms best.

“My advice to students is simple: 1) do internships and demonstrate you are willing to work hard. 2) Demonstrate curiosity and the willingness to learn something from almost anyone and everything you do”. Hankes told his own sons that “A” grades are not as important as the internships or jobs you work and what you did with the opportunities you are blessed with.  Don’t get into debt–Hankes had a time when he was paying 19% interest and had no possibility of prosperity. He vowed to only borrow when rates are reasonable and maintains a “leveraged business” because the high cost of quality machinery.

Jim admires the marketing Of Jack Links but warns that most of the product is imported from “who knows where?”. The success of Thrushwood is buying from someone you can trust-like a good neighbor.

No entrepreneur needs to remind her counterpart that living in the material world is feast or famine. The same principle applies to securing funding for your start up venture. When you need to borrow it is not available. When you are flush with offers from angel investors, banks, or venture capitalists, you are not likely to need it. A FORMER STUDENT (and first-time entrepreneur) HAS A GREAT E-COMMERCE business model. Yet he cannot find $100,000 in seed funding for his early stage venture. This former international student is smart but not well connected, even though he has secured some good development/programming talent at a bargain rate.

Another successful entrepreneur “snapped his fingers” at a few venture firms and secured a preferential term on his seed financing and first round without having to shop his business plan/model. In the world of venture financing, it really is who you know and what you have done in the recent past. Is that so different from succeeding anywhere else?

Michael Vipond (2004 Graduate) and Todd Stone (1984 Graduate)represent the best of the Monmouth College business graduates. They both came to Monmouth from middle class backgrounds and have become executives for General Grind in Aledo, Illinois. General Grind was a “job shop” for years, doing things CAT, John Deere, and Harvester did not want to do. They made and forged steel parts.

Today, with the work of Michael, Todd and a vibrant CEO, General Grind is one of the largest employers in Mercer County and boast millions in annual revenues and over 400 employees.  According to Michael and Todd, General Grind’s secret to success is their willingness to invest in new technology and adapt to a changing market.

One strategic advantage is the size and scale of their operation. Another is the dedication and attention to detail and deadline that make Michael, Todd, and General Grind so dependable. The company processes and manufacture parts with 4 million pounds of steel monthly. They utilize just in time inventory and produce some of the largest parts for their customers–including axles for mining trucks that are almost two feet in diameter and support the largest commercial trucks four stories high!

Michael is the CFO and focuses on the relationships with customers, banks, insurance companies, and vendors. Todd focuses on the production process and the employees. Both commented on the importance of obtaining a college degree for the challenges in management, but believe that on the job training is always important since “you don’t know, what you don’t know” until you face a new opportunity or challenge. That was the case when the management team decided to diversify into gun shaft production. It took General Grind time and investment to learn the business, but when the ag business became soft in 2008, the gun business grew and took some of the excess capacity.

We discussed the trend towards less vertical integration by its customers so that they can achieve better financial returns. With this trend it is important for General Grind to continue to become more efficient and monitor its own profitability. Based on Q1 results, they are tracking towards the best year ever.

Lee Celske spoke Tuesday on about starting  his own business and achieving his dreams. One dream he had was starting a building products company. Another was buying and maintaining rental property in Florida. 

Some people think that entrepreneurship is something that is born in you.  You either are one or you are destine to fail or quit when times get tough.   A good case study for that argument is our recent Midwest Entrepreneurs speaker Lee Celske.  Lee is a very dynamic individual; he is constantly on the move – physically, mentally and professionally. 

When you are one of eleven children in a Milwaukee, you have to learn to survive.  He has been a banker in Texas, an options trader in Chicago, a bond trader in London, a mayor in Aledo, an adjunct professor in Monmouth, an investor/entrepreneur in South Dakota and a real estate owner in Florida.  In addition, he takes lots of pride in being a good husband and a great father.  Business, family and community are all important to him. 

 Lee possesses the two essential characteristics of entrepreneurship – 1) the ability to see the opportunity and 2) the willingness to take the risk necessary to take advantage of the opportunity.  Lee entertained the class with stories about his multiple lives and his will to survive.  Each time his life changed, he re-invented himself and learned new skills and new industries.  When he had to learn the ins and outs of the Chicago trading pits, he did.  When he had to move his family to London for the welfare of his child, he did.  When he has to re-learn trading in a new country with new customs and cultures, he did.  When he had to get a graduate degree from the London Business School in the London School of Economics, he did.  When he had to move back to Western Illinois for family reasons, he did.  When he needed to lobby in Washington D.C., he did.  When he had to raise capital to finance his new business ventures, he did.  When had to be a one-man marketing, advertising and production company for his new business, he did.  When he had to pick up the pieces of his failed business and move on, he did.  As they say “it ain’t braggin’, if you done it.”  And he has done it.

 He is also a man of confidence.  It takes an extremely self-confident individual to take all the risks that he has taken and Lee has that confidence.  He believes in himself and he believes in his family and he believes in his future.  “Just around the corner, there’s a rainbow in the sky.” 

 In addition to demonstrating for the students the personal character of almost all entrepreneurs, Lee showed the students something that is critical to learn but extremely hard to teach.  He talked to them about dealing with failure.  His latest greatest business venture failed.  After a couple of years of hard work, he had all the pieces in places to start a company to build a new type of house based on an innovate green technology.  Recycled waste glass was mixed with a resin to create a new building material that had many highly desirable characteristics – strong, non-flammable, well-insulated, quickly assembled, and affordable. 

Lee got a license to make and sell houses using the patented technology developed by an inventor in England.  A credit-crunch recession hit.  The housing market turned down, bank financing become a challenge and the inventor was found guilty of misrepresentations and fraud. Then the project collapsed.  Then the lawsuits began. Then the failure of the project became a reality.

The truth is that many, perhaps most, entrepreneurs fail at least once and often more than once.  Only the winners are still around to tell their success stories.  Those who failed are hard to find and they are almost never willing to talk about their failures.  It is not easy to talk to strangers about your failures.  But Lee Celske does lots of things that are not easy.  There as many, and perhaps more, valuable things to be learned from failure as from success.  Lee was not destroyed by the failure of the project – the project failed; not Lee.  The failure of the last project is the opportunity to start the next project and Lee has already start a another new life.    

 The energetic, confident, risk-taking Lee Celske was off to his next project.  It was a valuable learning experience for Lee and it was a valuable learning experience of the students in Midwest Entrepreneurs.  Thanks Lee.  We can hardly wait to hear about the next project.

John “Beefy” Huston was the guest speaker in Midwest Entrepreneurs today.  He operates a successful landscaping business in his hometown of Roseville, IL.  John was born into a family where everyone was self-employed – “no one in my family ever had a factory job.  Everyone has always been their own boss.”  Entrepreneurship is comes naturally to him – as does landscaping.

John graduated from the University of Illinois with a degree in animal sciences in 1991.  Then he returned to Roseville to work on the family farm.  In his spare time, he began landscaping his own yard.  He discovered that he had a natural talent for arranging nature.  Friends and neighbors admired his work and asked him to work on their yards.  One thing lead to another and by 1995 he was in the landscaping business.  His hobby and natural talent had morphed into his career.  He now has a large machine shed and six vehicles to support his thriving enterprise.

He has never had any classes, internships or prior work experience in landscaping.  It is just something that he knows how to do.  He does not use a computer to plan each job; or even sketch the design out on paper – he can just see it in his head.  In fact, he does not own a computer or have an email account.  He prefers small quick jobs to large commercial projects or new construction.  “Oh I will do them but I prefer small residential properties.”  It fits his nature.  He talks, moves and acts quickly – perhaps impulsively at times – he answer to no one but himself.  He does what he likes, when he likes.  Life is too short to do things you don’t like.

In the early years, he supplemented his income by substitute teaching in the winter.  He still substitute teaches when the landscaping season ends (and drives a school bus for the basketball team) but nowadays it is for something to do and a reason to get up each day rather than the money.  Today his landscaping business generates plenty of revenue to support in the manner he chooses and it could generate much more revenue.  Although it is his profession to grow things, he chooses not to grow the business.  He intentionally keeps it small.  There is only one small crew – Beefy and two or three high school students.  Beefy believes in hard work for himself and his workers.  It is a high energy, hard work, get-er done operation.  Finish this job and get to the next one.  His business has strong word of mouth street cred.  Customers say “He shows up when he says he will, he works hard, he does a good job at a fair price.  He won’t quit until the customer is happy.”

As a part of the low-profile operation, there is no advertising.  Not even a yellow pages ad.  In fact, he not even have a business phone.  Beefy believes in being a part of the community and seeing his customers in person.  He urged the students to “read the local newspaper and attend every church social and pancake breakfast you can.”  Know your customers, see your customers, be a part of the community.  Good advice for a small business owner in a small community.

The small personal character of the business carries over to everything he does.  He runs the business as a sole proprietorship.  He keeps a paper ledger of expenses.  He carries a notebook of appointments and job details in his pocket.  He hand writes bills and thank you notes to his customers.  He hand delivers a pile of documents to his accountant at the end of the year and trusts that she will get it done right.

To survive as a one man business, you have to know a little bit about everything – insurance, finance, banking, marketing, bill collection and cash flow.  Beefy told the students about many of the small things that he does to keep costs down and avoid expenses.  He refinances, gets every discount available, and looks for deals and rebates.  A one-man circus performer has to juggle a lot of balls.

Beefy is a natural business man – by birth and by personality and by career.  It is clear that lifestyle is more important to him than money.  He has arranged his life to live it on the terms of his choosing.  He is the quintessential small business entrepreneur – a passion for his work, a fulfilling occupation and a contributing member of the community.  Many people aspire to be an entrepreneur to be their own boss — Beefy Huston gets the job done.