Last Thursday’s Midwest Entrepreneurs class began with a time-lapse YouTube video of the construction of an $875,000 grain elevator roughly five miles east of Monmouth, IL. The man behind the project was Will Zimmerman, a 2011 Monmouth College Business Administration graduate—and former Midwest Entrepreneurs student now engaged to a current class member’s sister—who owns and operates Avon, IL-based Modern Grain Systems.
Will’s inspiring entrepreneurial success story started in high school when he began working for the company he now owns. Will worked for the firm, then run by Bill Thompson, for six years. During this time, he learned the business of building grain bins and elevators first-hand and eventually became a crew supervisor. Around the time he was a junior at Monmouth College, Will began negotiations with Thompson to buy the business. Thompson, who had run the company for over 25 years, knew that Will had the knowledge and desire to continue his legacy of being customer-focused and keeping his word to local farmers. Then, after Will had completed the Midwest Entrepreneurs class, he took an Independent Study class in which he worked closely with Political Economy & Commerce faculty to write a business plan designed, in part, to secure financing to buy the company from Thompson. He eventually obtained a $200,000 loan and now has two years of highly successful operations under his belt. He has been so successful that the $200,000 loan has already been paid off in full.
Summarized below are important entrepreneurial issues discussed by Zimmerman in class; some of which we have heard from other speakers and others not.
1. Entrepreneurs often take huge but calculated risks. Will Zimmerman was in his very early 20s when he took out a $200,000 loan to acquire a business. He has made what any individual would consider large capital investments, including acquisition of six trucks, two vans, a bucket truck, four cranes, and two forklifts. However, he knew what he was doing long before taking over the company and he has worked extraordinarily hard according to the plan he carefully developed. Today, he is debt free and, as he told the class, is already “booked for 2013” (meaning he already—in late February—has all the business he can handle for the entire year firmly scheduled).
2. Entrepreneurial success typically demands extraordinarily high workloads. Will told the class that his 80-90 hour workload in the busy summer months can take quite a toll on one’s family life. He expressed disappointment, for example, that he is often not able able to go on vacations with his family. However, as he suggested, this is just what it takes to keep commitments and successfully run the business. Will also told the class that there will be times, particularly in a seasonal business such as his, that you will have the time to be with family and do other recreational things you enjoy.
3. Knowing and catering to the customer is key. This is nothing new; we have heard it—in some form—from all guest speakers this semester. However, Will Zimmerman added a new twist; the need to understand how complex, ever-changing tax laws impact farmers and, most importantly, being able to communicate this understanding to customers in customized fashion. Most notable in the tax laws is the recently escalated amount of money invested in grain bins that farmers can deduct each year. This knowledge—and its customized communication to customers—is highly exemplary of something that I personally stress in many of the classes I teach here at Monmouth College. It is the epitome of something referred to as assurance in the study of service quality; not simply possessing expert knowledge, but the ability to effectively communicate this expertise to customers to the point where they come to highly trust you. As you might guess, having the ability to inspire trust in this manner affords the entrepreneur the ability not just to sell a good or service to the customer, but to become a highly valued problem-solver for the customer. Will Zimmerman seems to know the importance of assurance very well.
4. Follow-up service—even for something like a grain elevator—is critical for long-term entrepreneurial success. After-sale service for a grain bin? Important? Yes! According to Will Zimmerman, after-sale service is very, very important. Repairs, additions, and modifications make up approximately 15 percent of his total business. This, however, understates the importance of this service. No one should ever “just sell” a product and then “leave” the customer with it. Repeat sales—and, eventually, building all-important customer loyalty—is significantly predicated on the ability and willingness to effectively provide follow-up service; even with grain bins and elevators. Again, Will Zimmerman “gets it.”
5. Creatively controlling costs adds up in the long run. We have heard this before but, again, Will added a new perspective. While stating that he must pay out large amounts of money annually for things such as worker’s comp insurance and unemployment tax—roughly $75,000 and $50,000 respectively—Will touted the significant (and off-setting) savings that can be realized by taking advantage of each and every possible discount when purchasing materials. He stated, most specifically, that he is able to save around $100,000 each year by taking advantage of discounts inherent in typical business-to-business price quotations. Common in his industry are terms of sale stated as “5/10 net 30.” This means that his firm, as the buyer of construction materials, gets a 5% discount if the bill is paid off in full in 10 days (otherwise, the total billed amount is due in 30 days). When buying tens or hundreds of thousands of dollars of goods at a time, these seemingly small discounts add up to big cost savings–and more profits–in the long run.
Although I was not personally here when Will Zimmerman was a Monmouth College student, it was hard not to feel somewhat proud to see one of our own standing before the class last Thursday. I sincerely hope to experience this feeling again and again in the future.
See you tomorrow at 4:00 pm for a presentation by global tea guru/entrepreneur David Lee Hoffman, who comes to campus from the San Francisco, CA area as part of the Monmouth College Science and Business Initiative. Included among the entrepreneurial issues that Mr. Hoffman will educate us on is joint venturing; forming strategic partnerships with foreign firms and individuals (in his case, Chinese tea farmers).