Today’s Midwest Entrepreneurs class blogger is Ryian Sampson. Below, he tells the captivating and improbable entrepreneurial success story of Mr. Rod Smith. Pay particular attention to the importance of the trust-based (supplier) relationships—with some of the biggest names in NASCAR racing—that Rod has forged over the years and now leverages to the “ca-ching” ringtone tune of $400,000 to $500,000 in annual sales.

Regards,

Prof. Gabel

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Rod Smith is an individual who caught his entrepreneurial bug later in life. Everything started coming together for the man during some of his final days at Monmouth College. He attributes much of his success to the multitude of things he learned from co-workers from his time at this institution, where he was Assistant Director of the Physical Plant (in charge of the custodians, utility workers, grounds crew and student workers). While in this position, Rod had a very important concept down in his head: “The students are also the customers.” With this in mind he made it his mission to treat students as customers and that meant leaving no stone unturned when it came to the cleanliness of the campus and dorms. This idea stuck with Rod. He was able to apply it to a new venture he was trying to start. He understood the importance of his customer base and has painstakingly tried to keep those practices intact as well as polishing them over the years.

This carried over to his current business of selling used NASCAR parts and is the life blood of his success. Rod Smith, in his head, has a very wide range of specific knowledge that allows him to buy and sell used automotive parts and market them back to other individuals over EBay. In general, Rod sells auto parts worldwide and stops at nothing order to make sure that the parts he obtains are clean and in good condition and can be sold. At the end of the day it would be his name on the line and he cannot afford anything ill being said about him or the services he provides. Many years ago Rod Smith would partake in racing himself; this is where the passion and knowledge of his current trade comes from. Also from that time in his life Smith was able to build upon relationships with other racers that eventually led him to become one individual who most others will call upon in order to meet their automotive needs.

In the customer’s mind Rod Smith has an amount of trust that he himself has that other competitors cannot come close too. This is something Rod can pride himself on. The customer base he still has to this day is what is helping drive his sales. Word of mouth is a very powerful tool, especially for a beginning entrepreneur. With the help of some of his workers Rod has the ability to buy smaller more valuable car parts and clean them up in order to sell for a profit. This doesn’t exclude the plethora of other car parts associated with this industry. Rod has seen it all but chooses at this time in his life to handle smaller parts for his own health. The profit margins can be pretty big and it all comes down to if the customer has the ability to simply buy an item from Smith at his asking price. A lot of the items sold through EBay have the ability to be set up for auction and some of the money that is being made through sales are haggled on. Over the years some parts gain and lose value and Rod stays on top of a lot of information that is pertinent to providing the right price to those looking to purchase his wares.

There are a few high-trust customers that Rod Smith still stays in contact with to this day that provide him with enough work so that he can continue to see the cash flow. Some smaller  NASCAR teams have Rod in the back of their minds when they think of a salesman who can provide the parts that they need when they need it. In turn, these teams, because of their relationships with Rod, return favors like providing him with parts for extremely low prices that he can turn around sell whatever it may be for a handsome profit. The mark-ups on these items are where Rod really begins to see money start to accumulate.

It’s worthy to note that there is a bit of niche marketing occurring here with Rod Smith. Buying and selling is happening between this vendor and multiple NASCAR racing teams. Although this market is fairly small and the man has to sometimes travel down to Charlotte, NC in order to pick up some pretty specific racecar parts that someone may have an interest in after he cleans it up. A majority of his sales are made to car builders but that doesn’t mean that an average Joe could not contact Rod for motor or three.

Rod Smith’s trade mark has to be his “ca-ching” ringtone which has to have gone off at least 5 times in our class alone. Every time you hear that tone you know that Rod’s wife Debbie, who he refers to as “the brains of our operation,” will be arranging for packing and shipping and that there will soon be either be USPS or UPS delivery driver waiting outside of the Smith residence.

Ryian Sampson

File this under the mental categories of “serendipity,” “it is a small world” and “networking matters”…

Two weeks ago, immediately after our excellent guest speaker presentation by Penrose Brewery owner  Eric Hobbs, I headed downtown for the introduction of a new beer crafted by Monmouth College Chemistry Prof. Brad Sturgeon—a future speaker in the class—held at Market Alley Wines (owned and operated by Susan Schuytema, our first speaker of the semester).

While there—several samples of Sturgeon’s “Stout No. 2” into the evening—I was introduced to Mr. Paul Rickey, a 1976 business graduate of Monmouth College who had come to occupy space between Prof. Sturgeon’s refrigerated dispenser and I. It was then shortly learned that Paul is a long-time local “legacy farmer” and also that we have many local friends in common. Paul told me that we “need a farmer” to speak in the Midwest Entrepreneurs class. I agreed—honestly and happily—and spoke to him about his business at length (over several more samples of “Stout No. 2”).

Arrangements were made… By chance at the time, Mr. Rickey was scheduled to speak the same week as another ag-based local entrepreneur; Will Zimmerman. Thus “ag-week in Midwest Entrepreneurs” was serendipitously created.

I had been hoping to find a local farmer to speak in the class for some time. I had hoped that Mr. Rickey would dispel all notions that (1) farming is not a sophisticated business, and (2) farming is not an entrepreneurial activity. He did just that.

Today’s class blogger is Tyler Baxter. Below he nicely captures the essence and feel of Mr. Rickey’s intriguing entrepreneurial tale as told to the class on Thursday 19 March.

Cheers!

Prof. Gabel

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“Agriculture week” in Midwest Entrepreneurs ended on a high note with guest speaker appearance of Paul Rickey. Mr. Rickey is a fellow Monmouth College alum from the class of 1976.

As he told the class, Mr. Rickey has never been too far from home, growing up in Seaton, IL, a small town exactly 26 miles from Monmouth. His family has been farming there for generations.  Since a young age, Rickey had an outstanding work ethic and could not get away from the farm for too long without either going back on weekends during college or even after classes here at Monmouth College.

Currently, Rickey farms just under 1,000 acres, and technically as well as literally works for his mother (who owns the land he farms).  It was Rickey’s parent’s decision to have him attend college, because they believed strongly in a good education.  Sure enough, right after graduation he headed home for the farm.  Ironically, Rickey says that his college education did not become a huge factor in his career until recently, where his business skills are becoming more important due to governmental regulations, competition, and increased need for loans. When he graduated from Monmouth College, Rickey’s peers and many other farmers did not see farming as a business.  However, Rickey seems to really grasp the business aspect of farming, with ample knowledge on commodity trading and the technological advances and finance that goes into running this increasingly complex type of operation.

Paul Rickey has a large amount of experience in not only row crop farming but, early on in his career, livestock. He compares raising livestock “to having children… but worse.” He described tending to livestock as a “guaranteed 7 day a week job” with the animals needing constant attention. During this operation, he was responsible for 50 heads of cattle and a skid steer was the main machine for organizing manure and other materials.

Mr. Rickey has always believed in staying in the family business on the farm and the land he farms has been in his family since 1847.  Rickey was the only son in the family, so the weight was on his shoulders when it came to taking it over.  Rickey recalls the price of the 160 acres he lives on being bought for $1,300 in 1847. He stated that it is worth over $1,500 per acre. He expressed very well how times have changed since he has been farming, and he also recalled the 1980 depression, and the negative impact on farmers.  He sees this trend happening again, but his experience allows him to be ready to take on another farming recession and he wisely has the equity to back up his operation in a down time.

Currently, Rickey specializes in row crop farming and he has recently invested in the newest GPS self-steering system in his tractor.  This year will be his first season with this technology and we could all tell how anxious he is to try it out and to test his patience with not being able to touch and control the wheel.  He also does his own spraying, which he says is rare now in days, because spraying can be very dangerous and also very time consuming.  He now hires enough help on the farm to be able to work a regular 5 day a week schedule and he also gave us a very detailed schedule of a “normal” season.  He will start his planting around April, spray all summer long, he will have a short lull where he can have a brief break, then he will spray repeatedly for weeds, then come late September, Rickey will start the plowing process until winter time (this year it was around December when he finished).

Mr. Rickey also gave us a few pieces of advice for any career, not only farming.  He expressed the importance of a good relationship with your local banker.  His local banker plays a huge role in his entrepreneurial business and can significantly impact his financial situation by approving or disapproving large loans that are crucial to Rickey’s complex and risky business.  He also spoke about not being too stubborn to keep up with technological advances.  He has invested a great deal of money in new technology, but it seems to be paying back great returns every season.  Education is another big piece of advice Rickey believes in, and the separation in work ethic between us students who are still in college as upper classmen, to the ones who could not make it through freshman year.  A great quote from Mr. Rickey is, “show up on time ready to go.”  This may not seem like much, but punctuality and good work ethic can get you a long way in a career.

In conclusion, I would argue that our visit from Mr. Paul Rickey was not a lecture, but an adventure.  He has been through generations of experience and has seen more than most of us can imagine in his field of work.  Ironically, Mr. Rickey never used to like speaking to students, but he made it seem like it was second nature to him.  Not only is he a great speaker, but also a good friend and neighbor to our very own “Dicky J” (Finance Professor Dick Johnston).  I think I speak for all of us in class when I express my gratitude for getting to have Paul Rickey join us in our class during agriculture week.

Tyler Baxter

Tuesday’s class began with a time-lapse YouTube video of the construction of an $875,000 grain elevator roughly five miles east of Monmouth, IL.

http://www.youtube.com/watch?v=9qELQMCDRtk

The entrepreneur behind this impressive project—and many, many more in the area—is “homegrown” in the sense that he is both a Monmouth College Business Administration graduate and a former Midwest Entrepreneurs class member.

This inspirational story of homegrown entrepreneurial success is told below by current class member Adrick Barreto.

Stay tuned later this week for more on regional ag-based entrepreneurship as our guest speaker on Thursday will be local farmer—and another Monmouth College business graduate—Mr. Paul Rickey.

Enjoy…

Prof. Gabel

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This Tuesday our Midwest Entrepreneurs class had a very intelligent and relatable entrepreneur speak by the name of Will Zimmerman, who owns and operates Avon, IL-based Modern Grain Systems.

Zimmerman, a 25-year-old former Monmouth College student that graduated in 2011, told us his story of how he owns a business that he bought before he even graduated from college. Will had been working for Bill Thompson, a man whose company built grain silos, when he was a teenager. He continued to work for Mr. Thompson until he was a Junior in college when he finally purchased the company from Bill, after years of joking about doing it.

During the first year he owned the company, Zimmerman had some help from the former owner, who stayed to guide him and to help him learn the ropes of managing the company well. The former owner helped him because he saw what every one of his customers and workers would see in him: a hard-working and dedicated man with strong values. This was made apparent to me when Will talked about how his company would bid higher than other companies for construction projects, but his company would get the bid anyway. The main reasons why he would get the bids is because he has a reputation for keeping his word and for working as hard as he can to ensure things are done the right way. To quote Zimmerman: “If you tell a guy that you’re going to do something, you better do it.” That is exactly what he does.

Will’s success stems from not only this, but also his willingness to work with and effectively communicate with his employees. He sets firm rules, enforces them fairly, and is always happy to roll up his sleeves and work alongside those that he employs. He also focuses on his core customers, careful not to stretch himself too thin by accepting jobs outside of a predetermined area so that his company can do its job, and do it well.

It’s because of Will’s impressive his work ethic and the quality of work that he and his company does that his company continues to grow and expand. People who he has worked with and work for tell others of his business and those people come to him when they need a job done. Will Zimmerman is a very inspiring entrepreneur and I am glad that he came to speak for our class!

Adrick Barreto

Thursday’s Midwest Entrepreneurs class was a great send-off for Spring Break. Our guest was Eric Hobbs of the Penrose Brewing Company located in the West Chicago suburb of Geneva, IL (http://penrosebrewing.com/).

Below, class blogger Donald Banks recounts the fascinating and inspirational entrepreneurial tale told by Mr. Hobbs. It is a tale of passion for, as Eric put it, “artistically expressed” beer and craft beer culture (discovered, I feel compelled to say, via his frequenting John’s Grocery Store in Iowa City, IA [https://www.johnsgrocery.com/] as an undergraduate student at the University of Iowa [as did I twenty or so years before him]).

Cheers!

Prof. Gabel

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This past Thursday, we had the pleasure to hear from Eric Hobbs, Co-founder and Co-owner of Penrose Brewing Company.

Eric grew up in Geneva, Illinois, which is also where his business is located. He graduated from the University of Iowa with a degree in Communication Studies. You can say that his love for beer began during his college years by experimenting with different kinds of beers with college friends.

Upon his graduation in 2003, Eric worked for a Miller wholesaler for two years, Joseph Huber/Berghoff Brewing for three years, and then Goose Island and Anheuser Busch for six years (after AB acquired Goose Island). While with these firms, he learned all he could about the industry and how to produce and distribute beer. Then, about 18 months ago, Eric decided to take what he had learned and pursue his passion as an entrepreneur.

The other half of the Penrose Brewing Company is brewmaster Tom Korder.  He is the engineering brains behind this whole operation. He graduated from University of Illinois at Urbana-Champaign with an engineering degree. He, like Eric, got extensive industry experience before starting up Penrose. Tom worked a total of 10 years, first for AB and then Goose Island. They both come with two different aspects of the business and that is what makes it such a great fit.

Mr. Hobbs explained to the class that finding investors to help start Penrose Brewing Company was a simple as word-of-mouth. Eric said: “Find one millionaire and they usually know a bunch more.” Mr. Hobbs also made a point in class that it is really good for the company to have an Attorney on staff because when he has a question about legal documents he looks towards that person without being charged for billable hours (which can be very expensive).

Eric also informed the class that the building of this exciting venture is founded on four principles: Experience, Building a Brand, Innovation, and The Future.

With regard to Experience, Eric and Tom came to the table with a collective total of 21 years’ worth of industry experience. Even though neither Eric nor Tom graduated from college with a degree in Business, they still managed to obtain the knowledge of how to start and grow this brewery. Everything else they learned along the way to help them get to where they are today. They presently have 10 employees—6 full-time and 4 part-time—that contribute to the major success so far.

One of the key things that Experience has taught Eric Hobbs and Tom Korder is that effectively running an entrepreneurial business is founded on social skills and communication. To make this point, Mr. Hobbs used a quote he had found online made by our very own Professor Gabel on the subject: “I understand the value of skills outside business. It’s important for students to have broad skills, social skills, a broader background, and to learn to relate to people better.” This is exactly what Eric and Tom learned and today apply in their fast-growing business. One of the main ways in which the business has grown is by the building of the taproom, where Penrose beer is sold to eager craft beer consumers. As Eric informed us, the taproom is used for direct consumer connection. This room is 40% of cash flow for the brewery. The remaining production of the brewery focuses on distribution through partners such as Windy City Distribution in the eight counties around the Chicagoland area.

Eric also told us that Building a Brand starts with getting the eyes of the consumer with up-to-date, interactive online communications. Next, you have to engage the consumer outside the event with social media and cross promotion. This means being consistent and always updating so that people know what is going on with new beers that are going to be introduced or festivals and other events Penrose is going to. That is why they have been to over 125 events and poured beer at 25 festivals to keep the name out there for the public.

The third pillar to the business is to Innovate. They have had videos made for the business that show the artistic creativity and passion that goes along with making Penrose’s growing line of craft beers. They have been featured in many newspapers and industry publications for their genius in craft beer artistry.

The last building block is The Future. Here, Mr. Hobbs explained that he and his partners believe that consistent reinvestment in the business and taking a long-term perspective is key. This also is seen in how the company hires new employees. They want to hire only people who share their passion for craft beer culture that can be used to connect with the customer. But the most important thing to Eric is hiring someone who he feels he can be around constantly because Penrose Brewery is a close-knit work group. Also, they need to innovate everyday with beer, people, events, menus, labels, carriers, photos, website, social media, and etc. so that they do not become complacent (which could lead to the end of the business).

Donald Banks

Today’s class blogger is Corine Allen. Below, she tells the captivating tale of Paul Schuytema and his roller-coaster entrepreneurial venture with Magic Lantern, a now defunct but once highly successful video game development firm based right here in Monmouth, IL.

The class learned a new and valuable lesson: There is much to learn not only from entrepreneurial success but also from failure. Most specifically: In fast-paced, dynamic high tech industries, failure can occur when even successful  firms do not see major change coming soon enough to adapt.

Enjoy!… And thank you Paul Schuytema!!

Prof. Gabel

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Before Thursday I had no idea what it took to make computer games until Paul Schuytema came and spoke to the class.  Paul described himself as a “nerdy kid” growing up.  He loved to play board games and really got into the rules of the games.  By fourth grade, Paul started to paint miniatures from the ancient Greek time area and that is when he made his first game.  Then, the technology hit and Paul’ s mother bought him a computer, one that allowed him to start programming and he loved it.

Paul’s love for computer programming had to become a hobby because it was not offered as a major at the school he was attending.  After working at Monmouth College for a couple of years, Paul worked on a lot of PC video games on the side and then got a call from 3D Realms and they offered him a job.  The company, furthermore, ended up shutting down the game that Paul and many other people that had worked really hard on, due to a larger need for a focus on another PC video game (the Duke Nukem release).  Paul left 3D Realms and returned to Monmouth in 1999 to start his own video game company, Magic Lantern. Paul told the class that, going into this entrepreneurial, one thing he knew for certain based on his past experience working for video game firms, was how NOT to run the company.

The startup of the company was slow and difficult. They attempted to launch their own video games, but soon learned that key to the business was having the legal right to use popular movie or TV show names and characters (e.g., Star Wars and Spongebob Squarepants). To get some cash flowing into his business, Paul and his partners wrote video game walkthrough/guide books.

The big break for Magic Lantern came when they released Tom Clancy’s Rainbow Six: Covert Ops Essentials.  This release gave Magic Lantern money that they truly needed.   After Rainbow Six, they released several other even more successful games, including Combat, Survivor (a game based off the hit TV show) and also Survivor Ultimate.  After they released those games they released a few more games, but nothing as big as Combat or Survivor.  The last game Magic Lantern made was Man Jungg Tiles or Time.  The company went through numerous “landmines,” as Paul said. It wasn’t the games for the reason they went out of business, it was the release of the console video game Halo. This innovation changed the gaming industry and it was bad news for someone like Paul, a small developer who failed to see console gaming coming in time to adjust.

The members of Magic Lantern successfully developed numerous quality products for the customer while living out their dreams of doing what they loved.  Having Paul speak to the class was a unique opportunity to hear not only about how to start up and run a high-tech firm but also how it came to fail.  Paul is proud of what he did with Magic Lantern and is now the Director of Community Development for the city of Monmouth. He is also married to Susan Schuytema, owner of Market Alley Wines.

Corine Allen