Our entrepreneur guest speaker in class yesterday was 2004 Monmouth College graduate Joe Stefani. He was accompanied by 2010 MC graduate Josh Vanswol, a key employee of the company. Their young, growing company Scotty Gear is presently the largest producer of fraternity and sorority flags in the United States. Scotty Gear produces the flags through a contract manufacturer in China and then sells them—as a wholesaler—to retailers across the U.S. for final sale to consumers/users.

The following blog entry is written by Midwest Entrepreneurs student Evan Bean.

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Joe Stefani ’04 is the founder and president of Arlington Heights, Illinois based Scotty Gear.  What makes Joe’s business unique is that he started Scotty Gear with zero dollars and managed to attend school while doing so.  Joe was part of the fraternity Sig Ep, where he designed his first shirt (which sold for nearly fifty dollars on ebay).  At first, he thought of this as a way of having spending money during the week, but then it became much more than simply a means of having extra spending money.

While Joe was making roughly 100 dollars a week, he wanted to expand his sales.  He was tired of selling shirts and decided to start selling flags.  Scotty Gear has grown into a huge hit and now the flags account for 95 percent of its products and 99 percent of its sales ($1 million in 2013).  The company sells over 900 different styles of fraternity and sorority flags, and is one of the fastest growing fraternity and sorority products companies in the country. Joe would like to expand Scotty Gear into more than producing flags.  He recently began selling other products such as lanyards, cards, and stocking hats.  Scotty Gear is mainly a wholesale company where they sell to retailers countrywide; everything from small independent stores to campus bookstores of all sizes.

Sales by Scotty Gear sky rocketed last year by 2,000 percent and they hope to grow another 400 percent in 2014.  Joe works with a limited amount of employees, including 2010 Monmouth graduate Josh Vanswol.  With the rapid growth of the company, Joe and Josh hope to hire another employee very soon; they were in fact recruiting while here.  Joe is a big supporter of Greek life and would like to hire a qualified worker with similar interests who is hard working.

Joe is a great example of a college student who started a phenomenal business from what he enjoyed most from scratch with, as he put it, “nothing.” He described three things we should know when starting a business:

1.         It will not be easy,

2.         Everything may not be as it appears, and

3.         There is not always one right way to get to the end. 

As we learned from Joe Stefani, starting your own business will be difficult and its up to you how much effort your willing to give.  Joe was once ready to quit his business when he was selling shirts, but he stuck with his plan and is now one of the biggest fraternity and sorority products companies in the United States!

Evan Bean

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Note from Prof. Gabel:

In addition, we also learned from Joe Stefani ’04 and Josh Vanswol ’10 yesterday about the potential critical importance of the law—and getting good legal counsel—to the entrepreneur. Scotty Gear’s business model revolves keenly around licensing and protection of the designs it creates. Specifically, the company is a licensed vendor of products bearing the names and logos of fraternities and sororities. They then incorporate these names and logos into designs which they create (and place on flags and various other products). Just as important to the ongoing success and growth of the company is legal protection of the designs. Joe mentioned one case in which a major retail seller of their products co-opted one of Scotty Gear’s designs and sold it as their own. This was quickly discovered and arrangements for the retailer to cease and desist were worked out via Scotty Gear’s lawyer; with the retailer stopping the practice but remaining a valued customer. While Joe and Josh must be constantly vigilant of such infringement of their valuable designs, they cannot handle the legal matters alone. Securing the necessary licenses and then enforcing their legal rights on their designs are not simple matters to be handled by the legal novice. As a result, Scotty Gear continually retains the services of expert legal counsel via payment of a monthly fee; their lawyer also sits on their corporate board. When asked why he chooses to employ legal counsel on this ongoing basis—as opposed to paying by the hour on an as-needed basis—Joe simply stated that the need to protect their designs—and the business itself—is so constant and imperative that the monthly retainer is the best possible approach for Scotty Gear.

Thank you Joe and Josh for another great entrepreneurial story!!

See you all Thursday for a very different entrepreneurial story; one of a local man who recently sold off his business after a remarkable 60-year run of hard work, persistence, innovation, growth, and community involvement.