Bar Rescue to the Rescue: A Horse Walks Into a Bar in Midwest Entrepreneurs

Yesterday the eventually inevitable occurred…

With a class structured around guest speaker presentations by practicing entrepreneurs, it is inevitable that you will–for any of hundreds of plausible reasons–have a day or two with no speaker. This is what happened with yesterday’s class.

But I had a backup–sometimes called in classes a “contingency” or “recovery”–plan…

I had been thinking for some time that showing and discussing a carefully selected episode of the Spike TV program Bar Rescue (http://www.spike.com/shows/bar-rescue) would make for a highly relevant and entertaining class meeting.

If you are not familiar with Bar Rescue, the series stars consultant Jon Taffer, a no-nonsense former bar and nightclub owner who has owned, flipped, or somehow “rescued” over 800 such businesses in his career. Taffer and his crew of expert bartenders, chefs, and designers is brought in by bar owners–entrepreneurs–to save their declining and often severly neglected and dysfunctionally run businesses. After a period of surveillance and consultation and training meetings, Taffer brings in local contractors and other service providers to renovate and update the facility (based on his extensive bar/restaurant marketing and management expertise).

I had for some time had one particular episode of Bar Rescue in mind for the class. Entitled “A Horse Walks Into a Bar,” it dramatically features the best and worst of entrepreneurship as portrayed on the show; a family business, drunken owners who seem to have given up, a young bartender daughter who seems to be the only person able and willing to save the business, pending foreclosure, over-pouring of alcohol and other rampant waste of resources, incompetent employees, poor customer service, lacking quality control in the kitchen, and a motorcycle and a horse–and, yes, horse poop–in the bar. But there is more… Tapper steps firmly in and, after an initial meeting that one of the intoxicated owners openly admits she did not remember attending and the abrupt departure of a poor-performing bartender called “Yum Yum,” turns things around and gets the family and their employees to fight for and at least temporarily save the business; all in four days of frantic and emotional activity jammed into 45 or so minutes of captivating–and in our case educational–reality TV entertainment.

The full episode can be seen at:

http://www.spike.com/episodes/nfs61t/bar-rescue-a-horse-walks-into-a-bar-season-3-ep-309

I now turn things over to today’s class blogger Cody Whiteside. Below, Cody does a fine job of capturing what was learned when Bar Rescue came to the rescue of the Midwest Entrepreneurs class.

Prof. Gabel

_______________________________________________________________

Rather than a traditional speaker, this class was centered on an episode from the Spike television show Bar Rescue, led by bar consultant John Taffer, mixologist Russell Davis, and chef J.B. Brown. Taffer took Arizona-based Kid Chilleen’s Badass BBQ and Steakhouse and turned the bar around in four days to help contain $180,000 in debt and avoid a bank foreclosure. By seeing a failing business, we get the other side of the story compared to our success stories from each of our speakers. This episode taught us what not to do and what to look for to turn a business around.

With the business being located off of a main interstate, most of the customers come from the highway traffic. What not to do was a theme of the failing business. No signs on the highway to attract customers, owner’s drunk while running the bar and giving away alcohol, poor outside lighting, and a glaring lack of control over both costs and employees was just a start to the long list of the ills of the failing business.

John Taffer came in and changed the atmosphere, layout, and attitude of the bar and the employees to save the family business. His first point of emphasis was that every successful bar owner doesn’t drink while on the job. He then led into what will attract the customer, keep them satisfied, and make them want to come back. He advertised on both sides of the interstate, changed the décor of the building to appeal to the customers eye, which included a lighted sign and parking lot, and engineered a new menu. The key to the menu is to box in the highest profit contributors, and shadow the second highest profit contributors. This draws the customer’s eyes to the best dishes in the restaurant, but also what will make the company the most money as well.

Professional bartender, Russell Davis, trained owner, Scott, and daughter, Aleah to the tricks of the trade behind the bar, and offered new, themed drinks to introduce to customers. He introduced moonshine as an option for the bar, and even a non-alcoholic drink for owners Scott and Donna to drink while on the job and still socialize with the customers.

Professional chef and barbeque expert, J.B. Brown, took the kitchen by storm and introduced the staff to real smoked barbeque. Authentic barbeque will keep customers coming back for more, while according to Taffer, 90% of barbeque restaurants across the country simply cover their baked food in sauce, rather than do what is necessary to produce real smoked barbeque dishes.

By seeing the hardships of a businessas we did in this episode of Bar Rescue, we can get a better understanding of what it takes to be able to be a well-rounded entrepreneur.

Many entrepreneurs face many obstacles and headaches of a business, but usually the biggest problem isn’t the owners themselves. In the case of Chilleen’s, the owner’s had to get themselves out of drinking problems to save their family business. If they can stay sober while running the bar and restaurant and otherwise stick to Taffer’s turnaround/rescue plan, they have a very good chance to get out of debt and turn their business around.

Cody Whiteside

 

Mary Kellogg-Joslyn: A True Transformational Leader On the Path to the Perfect Titanic Experience

Our guest last Thursday in Midwest Entrepreneurs class was Mary Kellogg-Joslyn, the 2014 Wendell Whiteman Memorial Lecturer.

See the stories at the two links below for details on both this annual event and Ms. Kellogg-Joslyn’s amazing career.

http://www.monmouthcollege.edu/information/newsEvents/newsDetails.aspx?Channel=%2fChannels%2fCampus+Wide&WorkflowItemID=0d747077-49fc-4bc7-99fc-4bdbd944052d

http://www.monmouthcollege.edu/information/newsEvents/newsDetails.aspx?Channel=%2fChannels%2fCampus+Wide&WorkflowItemID=8295f110-6bdd-4c33-8897-c03cd348e9a4

 

As Claire McGuire, the class blogger for this special event discusses below, Ms. Kellogg-Joslyn has both ”made it big time” (in a variety of ways) and led by example all along the way.

After Claire’s blog entry, I offer some additional insights on (1) the marketing of experiences, and (2) Transformational Leadership (and the importance of “leading by example” to build and inspire trust).

Prof. Gabel

___________________________________________________________________

Mary Kellogg, born and raised in Monmouth, had made it to the big time; first in the corporate world and now as an entrepreneur. Today, when she gets asked ‘What do you do?,’ she always thinks it is a bit odd to say “I own the Titanic” but that is indeed what she does.

After graduating from Monmouth High School and attending Colombia College in Chicago, Mary worked at CBS where she was the executive director of marketing and programming for 10 years before moving to The Walt Disney Company.  She became the executive Vice President of television for Disney and held this position for 20 years.  It was at Disney where she found out that advertising price does not work as well as advertising the experience. She took this lesson, and many more, from Disney and brought it into her own business.

After the 20 years with Disney, Mary joined her husband John for their present entrepreneurial venture. John personally worked on recovering artifacts from the real Titanic and now owns many of them, which are displayed in the two Titanic Museums.

With their facility in Branson, MO being on “the strip” of tourism—with about five to six million people passing through a year—Mary and her husband thought this would turn out to be a big hit (the good kind of hit).  She didn’t want this to be just a regular museum; she wanted it to come to life.  They agreed to build the ship half scale to the original and “back to the second stack.”  When making this place come to life, they hired a cast of 110 employees to make the experience as real as possible. They take stories from real people and families and recreate them.  Before the actors go out of the doors to start the day, they see a sign that reads “You are now entering 1912.”

“What keeps people coming back is the quality of experience they receive.” To get the complete experience, it takes a lot of work.  Mary said that they value the education of their employees and the education within the company.  There is learning happening all day every day.  The company offers a Titanic University program, which is ten days long and at the end, the employees are given a test. Etiquette lessons are also given to make sure that the employees are acting as they would back in 1912; all to make it a complete and authentic experience for visitors. When talking about education, Mary stated; “We consider the managers as coaches because they are always educating the crew.”

Instead of thinking about only guests/customers “first,” Mary said that it is also important to think about her employees “first.”  “If we give our employees respect, an education, teaching, and care for their families, then we can trust them to treat our guests well and give them a desired experience.”  It is also very important to listen to what the crew has to say.  This builds trust and, according to Mary, without trust, it will be very hard to move forward.

Since the museum in Branson turned out to be such a big hit, they went to Pigeon Forge, TN and opened another attraction.  Mary is in charge of developing and coordinating marketing, advertising, sales, public relations and merchandising strategies of both Titanic locations. In being a leader of both of these operations, she says “Anybody can do a task, but it is important for our crew to understand why we are doing it this way.” A leader’s job is not to chew people out for doing things wrong, but to call them in and tell them that they did not get trained the right way. She puts the blame on herself rather than the employee and seeks to help them continuously better themselves (so that, ultimately, the experience of the end customer is as perfect as possible).

In the future, Mary and her husband are thinking about finding another business, perhaps entertainment, because they need to do something in the tourism off season and would like a cash flow. They have had many requests to build additional Titanic museums in other locations in both the United States and abroad. They are currently giving serious consideration to at least one of these requests.

In the last few seconds of class, Mary said one thing that really stuck out to me: “In everything you do, you do with passion.” Mary Kellogg-Joslyn here, as it seems she always does, leads by example!

Claire McGuire

_____________________________________________________________________

Nicely done Claire…

I cannot pass up this opportunity to expand upon two issues touched on above; two matters not prominently featured in previous guest speaker presentations in the Midwest Entrepreneur class so far this semester. I discuss these issues below in the form of “two lessons learned” last Thursday.

Lesson Learned #1: The main thing being consumed with many service products is an EXPERIENCE. So… Strive to manage and perfect the experience and look for entrepreneurial opportunities to create better experiences for consumers.  

Although previous class speakers have seldom if ever come out and said “I market an experience,” many of them of course do. Creating and delivering memorable and interesting and otherwise satisfying experiences is something that service marketers behind tourist attractions–think Disney World–and themed restaurants–think Rainforest Cafe or Hard Rock Cafe or Jimmy Buffett’s Margaritaville–strive to do on a regular basis.

In class last Thursday, Mary Kellogg-Joslyn spoke of her 20 years of experience with Disney as first and foremost 20 years of “expereince marketing training.” This training–from as she put it, “the best” in the field of experience marketing–is what inspired her and her husband to build the Titanic Museums. This training is also what she uses on a daily basis to make the “Titanic consumption experience” as perfect as possible for the thousands of customers who visit their two locations each year.

Lesson Learned #2: There is a HUGE difference between being a “manager” and being a “leader.” Sustained entrepreneurial success and growth is more a function of effective “leadership” than “management.” Key distinctions between the two terms/roles include (a) the leader leading in transformative fashion (by positive example), and (b) leaders viewing their role as being founded about creating a trust-based organizational culture and helping employees continuously improve themselves.    

In my over 25 years of diverse experience in both academic and corporate environments, I have heard many marketing and management buzzwords be both mis-used and overused; a bad combination. Probably the most mis-used and overused–and thus ABUSED–of these buzzwords are “leader” and “leadership.”

Many managers call themselves “leaders” but are not. Equally flawed is the common assumption that if a person is in what is called a “leadership position” then this person is necessarily a “leader.”

Leadership is NOT simply telling “those below you” what do do and then expecting or formally demanding that they “obey.” Leadership is NOT attacking employees every time they do something imperfectly. These are fine examples of what is often called “management by fear” but “management by fear” is a far, far cry from leadership.

Last Thursday in class–and in a luncheon event I attended as part of Mary Kellogg-Joslyn’s Whiteman Memorial Lecture–I heard about the practice of TRUE LEADERSHIP.

For example, in class, as mentioned above by Claire McGuire, Mary stated that when an employee does something wrong at the Titanic Museum, she views it not as a failure on the part of the individual employee but rather as a failure on her part to not properly train or motivate the employee to perform better. I cannot think of a better example of “administrative accountability.” Further, when someone in a leadership position actively and conspicuously takes responsibility in this manner, it serves as an example of leading by example that serves to inspire and transform the behaviors of employees in highly positive fashion.

In both class and the luncheon event, Mary Kellogg-Joslyn made it very clear that at the heart of effective leadership is the creation of TRUST; trust between leaders and followers that inspires trust between co-workers. She also made it very clear in both events last Thursday that, in organizational settings, the antithesis of Trust is POLITICS. From a services and experiences marketing perspective, not only does gossip and other forms of “office politics” undermine all-important trust, they lead to the dysfunctional wasting of monumental amounts of time and effort; time and effort that would be far better invested in creating better customer experiences.

In closing, it is obvious to me that among the most significant keys to the phenomenal success of Mary Kellogg-Joslyn–both in the “big corporate world” and as an entrepreneur–are that she fully understands the (interactive) importance of both (1) focusing on the creation of memorable, satisfying experiences for customers, and (2) leading by example in transformative, trust-inspiring fashion when dealing with employees. 

Thank you Mary Kellogg-Joslyn for a refreshing and shining example of TRUE LEADERSHIP!!

Prof. Gabel

 

 

The Highly Improbable Entrepreneurial Story of Rod Smith and a-1performancewarehouse

Our guest speaker in class yesterday told an entreprenurial story that must seem to anyone to hear it for the first time as “highly improbable” at best.

Half a million dollars in sales of used racing car parts over ebay each year? To buyers all over the world? Thirty-to-fifty percent profit margins?

NO WAY!

Yes… I am here to tell you that it is all true… And essentially done out of a garage–and storage building–right here in Monmouth, IL.

It is the story of Rod Smith (ebay username: a-1performancewarehouse) and it is told below by class blogger James Wilson.

Prof. Gabel

____________________________________________________________________

Rod Smith attended Monmouth College for two years before realizing that the school life wasn’t for him anymore.

After leaving, Rod went straight to work, living at home, and making a nice amount of money before deciding to work for Monmouth College as the grounds supervisor. While head of the “Green Army” here he also pursued his true passion; driving race cars four nights a week on dirt roads for fun.

After 22 years of service with Monmouth College and some work on the side buying and selling race car parts, he took the risk of leaving Monmouth College and turning his passion into an entrepreneurial business.

So in the summer of 2010, he began his business on ebay, selling used Nascar parts full-time.

Who would have thought that a man selling those parts out of a small garage in Monmouth could one day be one of the top sellers in the ebay market?

Working on this business with just his family (wife, sister, and his son), he occasionally hires a few interns from the college to help around and see the work he does. He stated that anyone can start a business on ebay, but it won’t be easy with ebay’s payment service taking a good amount out of their profit (and the fact that sellers now get taxed by the federal government if they have annual sales of over $20,000 on ebay).

For the last few years, Smith has had annual ebay-based sales of around $500,000 with profit margins on individual sales typically in the 30-50% range.

Smith now makes enough money selling used race car parts to buyers all over the world to choose his own vacation dates, which are usually each summer starting April 1st. . He also told the class that he basically spends the summers golfing; often with our very own Professor Connell.

In all, Rod Smith was able to make something out of what he loves. As quoted by Prof. Connell, “he made a living off his knowledge.” This goes to prove that if you know a lot about what you really love, and there is big demand for it, you can make a successful entrepreneurial business out of it.

So Rod Smith, former sprinter back in the day, and whose wife makes amazing steaks, is just a normal guy who went for his dream and has “hit it big”… out of a garage right here in Monmouth!!

James Wilson

The Evolution of the American Country Club and Managing in a Declining Market

Last Thursday’s Midwest Entrepreneurs class was different than most.

This is because our guest speaker focused more on “survival” than “growth” or “success.” While most entrepreneurs hope to not have to worry about merely surviving, far too many “close their doors for good” unnecessarily; that is, without first trying any of a variety of innovative means of staying in business.

This is just the sort of lesson learned in Midwest Entrepreneurs class last Thursday.

Today’s student blogger is Drake Decker. Below, he nicely captures the essence of the critical lesson learned via the captivating tale of ongoing struggle and survival shared with the class.

Prof. Gabel

——————————————————————————————————————–

Our ‘guest’ speaker last Thursday was Monmouth College’s Professor Mike Connell who spoke on behalf of the Monmouth Country Club. Professor Connell served as the club’s President of the Board for nine years. Before getting into the specifics of Monmouth’s golf position, he first discussed the three ways to “sell golf” and how the market for golf is changing. He then addressed how his business, Monmouth Country Club, is adapting–to keep its doors open and survive–in the face of a changing (and increasingly challenging) marketplace.

Dr. Connell informed the class that there are three main ways that golf courses traditionally operate.

  1. They can be run as government owned, public courses where anyone can pay a fee to play a round.
  2. High demand locations in states such as Florida, Arizona, and California can support resort courses as tourist destinations where golfers stay and play.
  3. Lastly, some courses are private country clubs.

The traditional Country Club offers exclusive, invitation only memberships to a select group of people. Often times, there is a waiting list for membership. Members are charged an initiation fee, monthly or yearly membership dues, and any other fees that need to be paid to cover the club’s costs. These courses usually offer higher quality golf, dining, tennis, swimming, health clubs, and social events.

Country clubs especially thrived in the 1940’s, 50’s, and 60’s because people had the time to support this kind of lifestyle. These clubs were “the place to be” for professionals and members of “high society.” Business transactions often took place on club grounds, and country clubs served as the primary networking location before modern connecting platforms such as Facebook. The traditional country club existed as the foundation of a lifestyle that many people desired to live.

In recent times, however, country clubs are struggling as golf is decreasing in popularity and lifestyles are changing. This is particularly true here in the Midwest.

Country clubs were popular when golf was most prominent. There was a time when people of all ages and abilities enjoyed spending a whole day at the course. Professor Connell also argued that the “Tiger affect” increased fondness toward the game while Tiger Woods was dominating the sport at the professional level. Since Tiger’s era of dominance has passed, golf’s popularity has taken a hit.

Country clubs took advantage of the fact that their facilities were often the only golf course, pool, and social arena in town. These assets, combined with the desire to have country club status, allowed managers to “exploit the market.” Assessments (customers are billed a portion of the club’s losses for the year) were passed on to members in increasing amounts, and people got tired of paying, which decreased membership.

Another key factor that led to the downfall of clubs was the opening of public alternatives to traditional country club exclusives. Governments and park districts began to build municipal golf courses and public pools that gave community members an alternative to joining a country club. Some people chose to use these facilities instead of paying to belong to a club.

Possibly the most crucial factor that has led to the downfall of the traditional, “small town American” country club is a shift in lifestyle amongst a large segment of the population. This major societal change consisted of most people becoming busier with employment, children’s’ activities, and other, less time consuming activities. Parents are always on the go, attending activities. Women no longer have time to sit around the club and play bridge because they have become part of the workforce.

Golf is an expensive proposition, and it is an extremely difficult and frustrating game to play. This makes for a very low retention rate of people who start golf. Professor Connell explained that a very low percentage of people who purchase new clubs are still playing the game in five years. Also, golf has become too slow, too expensive, and too difficult for enough people to support country clubs.

Many courses have felt these affects, including several in the Monmouth area. For example, the class was told about a golf club in Nauvoo, Illinois being sold off at auction just last weekend. Its buyers will likely use the course as farmland, hunting ground, or another activity that has surpassed the demand of golf. Professor Connell suggested that it could even become a pet cemetery. Such “other usage” of golf course land is becoming increasingly common in the Midwest.

Monmouth Country Club (MCC) is also struggling to adapt to changing circumstances, but it is staying alive thanks to innovative and at times counter-intuitive changes in business practice.

MCC’s business model when Professor Connell became President of Board eight years ago was closely modeled after the traditional country club model developed in the middle of the 20th century. The club was prospering, hitting its maximum of allowed members at 300.

After the societal and psychographic changes mentioned earlier took place, profits took a turn for the worst. MCC hit rock bottom when its line of credit with the bank reached its limit. Thankfully, legendary local businessman John Twomey stepped in and helped the club. John became a volunteer manager and helped the club pay its debts.

A combined entrepreneurial effort from Mr. Twomey and Professor Connell revamped Monmouth Country Club and returned it to stability. Many changes made the comeback possible. These changes involve cutting costs and increasing membership.

The first decision that was made entailed closing the dining room and leasing it to an outside vendor for a low price. Instead of losing $42,000 per year operating a restaurant, the club was now receiving a small rent revenue.

The next major change was putting the pro shop on an honor system. Members could still purchase items from the pro shop even though there was not an employee tending the desk. Connell admits that people will sometimes take advantage of the lack of supervision and not pay for what they take, but the amount that people ‘steal’ is less than the eight dollars (twelve including taxes) per hour that an attendant would cost.

Dues were reduced from $1300 per year to just $800, which makes membership more attractive to a wider demographic. MCC is sacrificing exclusivity for affordability in order to increase its bottom line. This is necessary to keep the doors of the facility open.

Members also stepped up to help their club. Several members followed John Twomey and Professor Connell’s lead and have volunteered their time. Members chip in with maintenance by cutting grass. This eliminates the need for a greeenskeeper, once again decreasing total expenses for the club.

Upon further review of the dining aspect of the club, MCC decided to close the dining room. They have instead chosen to enter the catering and banquet hosting market. Individuals can now rent the club’s facilities for their events. The public can rent the clubhouse, the bar, the dining room, and the outdoor facilities to host events such as weddings and class reunions.

A final change that MCC has made comes in the form of course improvement. New greens were put in last year, and Connell and the rest of the board hope that improving their facilities increases membership and current member satisfaction.

The drastic changes that have taken place at Monmouth Country Club in recent years have saved the business. A total of 143 members currently belong to the club, 30 of which are “social” members. While the club is still losing some money, financial improvements are clearly taking place because the club was able to pay the bills for the past three years.

Overall, Monmouth Country Club is a great example that markets are constantly evolving and that, as a result, businesses must adapt, sometimes in order just to survive.

Drake Decker

If You Want to Look Good (to Customers), You Have to Do Good: Joe Thompson and Thompson Brothers Painting

This past Tuesday, the Midwest Entrepreneurs class was treated once again to a very insightful presentation by a successful local entrepreneur. Our guest was Joe Thompson of Thompson Brothers Painting. Like most of our guest speakers so far this semester, Mr. Thompson strives to continually generate positive word-of-mouth communication about his business within the community. In other words, he understands that if you want to look good to customers, you have to actually do good.

I now turn things over to today’s student blogger, Jenna Rambow, to provide the details of the Thompson Brothers Painting entrepreneurial story.

Prof. Gabel

—————————————————————————————————————-

Tuesday’s guest speaker was Mr. Joe Thompson of Thompson Brothers Painting, Inc. The business is located in a “small town USA” called Roseville, IL, and its area of expertise is commercial painting of storage buildings and grain bins along with some houses and interior work.

Mr. Thompson is the youngest of nine brothers and sisters. They were all raised by a mother who was rich with respect, not dollars, and who taught them that if you want something you have to work for it. Therefore, due to that lesson, most of the siblings today either own a business or work for one of their siblings that does.

Throughout the year, all of the outside paint jobs (the majority of the business) are performed beginning early in the spring and all the way through the fall. The interior paint jobs are performed during the winter. In total, Thompson’s company completes about 110 jobs per year. These jobs range from the very small to the very large and are billed at anywhere between $400 and $40,000. For the outside jobs, the weather (like the rain and wind) can be a major obstacle to deal with. Because of the importance of the weather, Mr. Thompson always has his phone with him so that he can check radar and the weather for the day.

During his presentation Tuesday, Mr. Thompson made a couple of points about how to make a business look good to customers, especially in a small town community. Simply put, to look good, you have to do good. One recommendation made is that a business should always do quality work. This is because the word-of-mouth is both essential and inevitable in a small town. Information travels fast and it could either benefit the business or destroy the business. Therefore, the quality of work has to be good. The second point is that it’s important to volunteer and to donate time and money in the community. This is so that you show people that you care about the community. In return, hopefully it attracts current and potential customers to the business. In fact, Mr. Thompson is the President of the Community Center Board and a volunteer coach. He also donates his time to helping friends with their paint projects and donates money to the local FFA program.

Like many of the businesses featured in guest speaker presentations so far this semester, Thompson Brothers Painting business does very little advertising. This is because the company relies mostly on word-of-mouth communication, just like John “Beefy” Huston’s landscaping business. The business also doesn’t have a website or a Facebook page, which is another similarity to Mr. Huston’s landscaping business. However, the business does do some advertising in the Farm Bureau paper due to the fact that it attracts a lot of farmers that have grain bins and storage buildings that eventually need painting and other maintenance.

In the area, there are a lot of painters. However, those painters don’t do exactly what Thompson’s  business does. Therefore, the direct competition is sparse. However, often in the summer, what he referred to as “Southern Painters” come up to the region from the south and try to get  business by knocking on the farmers’ doors and persuading them to have buildings painted while they are in the area. These competitors typically charge less than Thompson Brothers but do far lower quality work. As we were told, many of the local people who do business with the “Southern Painters” regret it and turn to Thompson for their future paintintg needs. This reinforces Mr. Thompson’s recommendation to always do quality work.

In the spring, the business has about 5 employees working on paint projects. In the summer, the number increases to about 8-10 employees. All of these employees are part-time. Mr. Thompson does not have any full-time employees. Therefore, the business does not provide health insurance. However, the business does provide workers’ compensation. Mr. Thompson usually hires people who he knows and who have a good work ethic. He will also ask people in the community if they know of anyone who is looking for a job and is willing to work.

For a paint job, Mr. Thompson normally sends a crew within a 30 mile radius but will go up to about 75 miles. He always sends at least 2 people to the job site for safety reasons. The work is labor intensive. About 80% to 90% of the job is spray painted. For a house, it could take up to 7 days for it to be completed. For a machine shed, it could only take up to 2 days. Furthermore, during the summer, the work week is long as the work is about 80 to 90 hours a week.

In any given year, Thompson will use about 5,000 to 6,000 gallons of paint. At 30 or more dollars per gallon, this obviously represents a major expense for the business. However, the company buys in bulk to get volume discounts and actually ends up making money on the paint.

When asked about major investment in equipment, Thompson said the best investment he has made is in “bucket trucks” that lift workers up to the tops of buildings and virtually do away with the need for ladders and scaffolding. Today, the business has invested in 5 bucket trucks and about a dozen sprayers. The bucket trucks help the workers get the job done faster. It’s also safer for the workers.

Mr. Thompson has no plans to expand the business, nor does he want to. He just thinks it would cause more headaches. He would rather stay local. However, the business does gradually expand every year but not on purpose. Due to the gradual expansion every year, Mr. Thompson does more managing these days. However, he still paints every now and then along with his employees and teaches them how to paint the correct way.

Currently, Mr. Thompson doesn’t really have an exit plan. He also doesn’t necessarily want his 2 children (ages 12 and 14) to take over the business in the future (but you never know). However, if he was to sell the business, the person would have to be an expert in painting and would have to want to do the job. Mr. Thompson is not going to sell his business with his family’s name on it to a person who does not care about the job.

A stressful thing that Mr. Thompson deals with is rules and regulations like OSHA, EPA, and other governmental rules and regulations. He also has had to sue a couple of customers to them not wanting to pay for the work that was done. That process can be very stressful as well.

Mr. Thompson receives several different kinds of complaints after a paint job has been completed such as missing spots, not painting heavily, stepping on plants, accidentally spraying a car, and etc. When this happens, he strives to make things right with the customer as soon as possible.

At the end of Mr. Thompson’s presentation, he left us with several key points to ponder in order to have a successful business, which I thought were all great points.

1) You need to enjoy your work.

2) You need to be motivated to run your business.

3) You need to be dependable.

4) You need to be visible in your community.

5) You need to be sincere.

6) You should listen to your customer by doing what they want done.

7) Don’t be afraid to admit that you made a mistake and don’t be afraid to do whatever you can to fix it.

Jenna Rambow

Lee Miller: Serial Entrepreneur Turned Monmouth College Professor

Last Thurday’s guest speaker in Midwest Entreprenurs class was a familiar face to many students; Monmouth College Political Economy & Commerce faculty member Lee Miller.

Miller spoke to the class about his three-company entrepreneurial career; his career before transitioning into education. This first career was rooted in Miller’s educational background in Mechanical Engineering.

As I sat and listened to this interesting story, I could not help but think of the term “serial entrepreneur,” meaning an entrepreneur that starts up not just one business but rather applies their expertise to multiple innovations which underline the founding and running of multiple companies; with one often sold off to fund the start-up of the next.

Lee Miller’s story of serial entrepreneurship is told below by class blogger Andrew Davis.

Prof. Gabel

________________________________________________________________

The Midwest Entrepreneurs class had the opportunity to listen to the familiar face of professor Lee Miller on Thursday, March 20. Professor Miller shared his successful entrepreneurial and business experiences, as well as important advice for young entrepreneurs.

Miller’s educational background has contributed to much of his success. He has attended nine different universities throughout his college and entrepreneurial career. Miller received his Mechanical Engineering Degree from Ohio State University and obtained his MBA at Western Carolina University. Lee Miller also attended the VCU Masters Program in Engineering.

Lee Miller began his entrepreneurial career as a contract manufacturer in Shelby, North Carolina. There, he designed automobile parts, specifically for drive trains, for large companies throughout the midwest including TRW and Eaton Corporation. Miller experienced success in his work and grew the company to forty employees. In a year long process, he sold the prosperous company to pursue a project with greater potential.

Miller’s second business was located in Richmond, Virginia. As a class project at Virginia Commonwealth University, he designed and manufactured an arthroscopic device used very commonly in health care today. Being an extraordinary innovator, Lee Miller also designed and patented a machine tool to manufacture the small parts for that specific device. With demand for his product increasing significantly, Miller was forced to expand his company. Miller decided to sell the company to a former customer, agreeing to train the new engineers to manufacture the device.

Then, while still in Richmond, he was offered a consulting position that turned into his third and–as of now–final entrepreneurial venture. This company, based on Miller’s design for a superior rotor shim part for automobile braking systems, was a venture-capital backed enterprise in which he held a minority ownership stake. Miller’s main input, beyond the design of the part, was to get the manufacturing operation up and running. Once this task was complete, he left the firm to pursue his Ph.D. Miller still holds his shares of stock in the company, which remains in business today. He informed the class that while the part he designed did in fact have significant advantages over its competitors, the company ”never really became the ‘next big thing’.” The reason for this less than hoped for outcome, according to MIller, is that the part was slow to be widely accepted by automobile mechanics (demonstrating to us the importance of always thinking about the implications for all effected persons when introducing a new product or starting a company based on one).

When asked about some of the biggest lesson learned over the course of his three-company entrepreneurial adventure, Miller stressed the importance of hiring the right people. His main point was the necessity of hiring people with positive attitudes. A person with a good attitude can be trained and will contribute to an overall positive work environment. Miller has worked with a variety of people from many different countries throughout his life. He strongly recommends embracing diversity, stressing the importance of different ideas and better solutions in the workplace.

Lee Miller advises new business minds to expand their opportunities and continue their education, two vital responsibilities that will assist in career success.

Andrew Davis

Staying Local While Continually Adapting to Change – Prairie Radio Communications

Tuesday’s Midwest Entrepreneur’s class was a lesson in both what is new and what has persisted in the face of change. It was based in hard marketplace reality and featured the NEED to plan for the future while simultaneously being ready to continually adapt to unexpected change.

If that sounds contradictory, it is. Such is the nature of reality in the hyper-dynamic context of communications technology and services.

Our guest was scheduled to be Vanessa Wetterling, President of Prairie Communications (operator of three local radio stations).

However, reality happened and Vanessa had to attend a meeting in Iowa City, IA.

In her place was Prairie’s local General Manager Larry Timpe, who, to our benefit, possesses four decades of diverse experience in the radio business. Accompanying the highly experienced Mr. Timpe was a newcomer to radio; Kyle McEwen, a 2013 Communications Studies graduate of Monmouth College who is Production Director and Afternoon DJ with the company (and one of six Monmouth College graduates working there).

Kyle’s dual role at the firm reminds me of another key lesson/theme of Tuesday’s class: The NEED to be versatile as both an individual and a company (which fits nicely with the need to be ready to continually adapt to unexpected change).

I now turn things over to today’s class blogger, Maisey Postin.

Below, Maisey does an excellent job of addressing the fact that although Larry Timpe and Kyle McEwen are not entrepreneurs, their presentation was nonetheless highly relevant for the class. This is mainly due to the fact that (1) 90% of Prairie Communications’ customers are entrepreneurs, and (2) Mr. Timpe has been observing entrepreneurial activities and catering to the needs, wants, and expectations of entrepreneurs for over 40 years.

Prof. Gabel

—————————————————————————————————————-

The Midwest Entrepreneurship class was surprised to see Larry Timpe the General Manager of Prairie Communication stations Sunny 97.7 (http://www.977wmoi.com/), WAlK-Galesburg (http://www.1590waik.com/), and WRAM 1330 (http://www.1330wram.com/) there to speak to us instead of Vanessa Wetterling. Vanessa was just named president of the company and soon-after named Larry Timpe the GM. She was unable to attend our class today because of a meeting but it was a joy to listen to Mr. Timpe’s views on entrepreneurship.

Larry Timpe has been involved in radio for over 40 years now; he was fresh out of the air force when he started broadcasting games in Tennessee. He had described sitting on a grassy hill with a program in one hand and a tape recorder in the other explaining the highlights and scores of the game. The next day he would re-broadcast the game over the radio.

Timpe went on to describe the online business and the different pay outs that were required and necessary to play the radio online. He explained that the song writers were the ones that get paid whenever a song plays over the radio or online. It was the biggest “unexpected expense” the radio stations were hit with.

The station finds itself competing with not only larger local radio stations but also television and newspaper. It’s not a surprise for Larry Timpe to be asked, “How do you stay alive?” When there is social media, internet, and television, who wants to listen to the radio?

Prairie Communication persists by staying involved in the local community in ways that national radio and other larger communications services firms simply cannot!

It does this in a wide variety of ways. For example, the company holds promotions at the local grocery store, sponsors events including an annual Easter egg hunt and a farmer’s appreciation breakfast, and regularly airs public service announcements for charities.

In addition, Prairie’s persistent success is founded in large part on knowing and serving its customers.

Mr. Timpe informed us that surveys were sent out to the local farmers by the station to know what station they would rather listen to. After seeing the results Vanessa Wetterling made it a point to go straight to the farmers and ask what they could do to become their number one station for agricultural news. Her effort to reach out to local farmers and find a solution is a big part of the reason why she was named president of the company.

At one point in the discussion, Mr. Timpe asked the class “What does a radio station sell?”

Good question…

As correctly stated by a classmate, Prairie Communication sells audience; their product is providing listeners to businesses in the community who want to communicate something. In this regard, with Sunny 97.7, they average about 1000 to 1500 listeners at any particular time.

How does Larry Timpe find the right station for clients that will reach their prime target market? Again, it comes down to knowing the customer.

When he meets with a client they do a CNA or “customer needs analysis” that involves a series of questions that help discover the right station for them. He makes a point to ask them how they started their business and if they were at the point they thought they would be at when they started. He gets to know them and their personality; from there he can define their target market and find the station that will best suit their business.

Larry went on to describe the business relationships they have created between national sports teams and those royalties come into play. The station picks up the program off of their satellites, some require a quarterly fee for them to be played but others are bartered. The station only gets about 90 seconds/per inning worth of air time during the national sports broadcasts but during other programs they get around 13 minutes. Sports broadcasts are not allowed online unless an additional and significant fee is paid.

Along with learning about Prairie Communication, Timpe educated the class in starting a new business and to be aware of “unexpected expenses.” Many businesses fail because they spend the money they make in the first year and don’t plan for the next. The business needs to be more than a short-lived fad that can be replaced by the next big thing. He went on the compare MySpace and Facebook, MySpace was a short-lived fad that was replaced by Facebook. Will your business make a profit? How about the profit centers?

Larry Timpe and Kyle McEwen might not have been “actual” entrepreneurs but they did provide us with great insight on the changing business of radio (and on doing business in a very old-fashioned “local” way).

Maisey Postin

A Dual-Career President (of both Monmouth College and the Corn Field)

Today’s blog is written by Midwest Entrepreneurs student Gustavo Calderon. It focuses on the interesting dual-career entrepreneurial story of Monmouth College President Dr. Mauri Ditzler.

Prof. Gabel

——————————————————————————————————————–

This past Tuesday, Midwest Entrepreneurs students were delighted to have our very own president, Dr. Mauri Ditzler, come and speak of his own entrepreneurial journey. From starting his own strawberry farm at a young age, to successfully running a business for 35 years, the class was able to learn a lot from his experiences.

President Ditzler opened up the class by explaining that he has always been an entrepreneur at heart. As mentioned earlier, it was in fact in eighth grade when he started his first business; his very own strawberry farm. He took a passion of his and was able to create something that most individuals would not think about at that age. Moving forward, the president spoke of how he spent his summers during his high school years: detasseling corn for local farmers. As he explains it, this job was a “right of passage” for kids his age in the farming belt in the Midwestern United States. This work was something that he took much pride in.

When it was time for Dr. Ditzler to pursue his number one passion of education, he realized that the salary offered by these types of jobs was not very high. This caused him to brainstorm ideas as to how he could both do what he loved, but also gain extra income to more comfortably support his family. The corn detasseling business was perfect (and fit well with his academic calendar, with summers off from teaching). He knew that if he was to pursue the idea of starting a business, it needed to be something that he did not spend much time on. It was then that his business was born; he partnered with an old friend and decided that they would become providers of detasseling services to seed companies (that had outsourced the planting and harvesting of corn to local farmers). In essence, the human resources function of growing corn was outsourced to Dr. Ditzler’s company.

In this capacity, Dr. Ditzler and his partner–eventually joined in the business by another partner–organized groups of high school students to travel to these different farms and do a job that they dreaded. For 35 years, he was able to work hard during the Summer month of July, make the extra amount of income he was searching for, and forget about the business for the next 11 months.

During the prime of his detasseling business, Dr. Ditzler had about 1000 employees working in 3 states (Indiana, Illinois, and Missouri); transported from field to field on as many as 20 buses at a time. As he told the class, his detasseling entrepreneurial venture may very well have been the largest in the country at its peak.

The most important aspect of this whole story is that, unlike many of the guest speakers we have had in class so far, President Ditzler was able to start this business with almost no money. The business ran solely on handshakes and agreements. When he rented the buses, he promised he would pay them back at the end of the month; the same worked with use of his gas. Another advantage was that he never had worries about purchasing insurance. Early in the venture, it was something that he and his partners weren’t able to persuade insurance companies to provide. Later, when they began to work for larger agribusiness firms that took over the local seed companies, these companies purchased insurance for their workers.

Ultimately, Dr. Ditzler quit the corn detasseling business due to accepting the job as President of Monmouth College in 2005. However, the business served its purpose. He was able to pursue two of his passions without either one negatively affecting the other!!

Gustavo Calderon

 

 

From Monmouth College to Silicon Valley and Back: Alumni Distinguished Visitor Roger Well ‘86

Our guest speaker in Midwest Entrepreneurs class last Thursday was Roger Well, a 1986 graduate of Monmouth College who is currently the Chief Operating Officer (COO) of ENFOS Inc. (http://www.enfos.com/), a global leader in commercial software designed to help heavy industrial companies and governmental agencies manage environmental risks and liabilities. The company is based in Silicon Valley in San Mateo, CA. Roger, however, works out of the firm’s Midwest office in Naperville, IL. ENFOS also has an office in Bejing, China.

Mr. Well was on campus as part of Monmouth College’s Alumni Distinguished Visitor program. His youngest daughter, Madison, is currently a Monmouth College student and sat in on her father’s presentation.

The student blogger for Mr. Well’s visit to class is Alex Padilla. His account of Roger’s fascinating journey from Monmouth College to Silicon Valley—and China—and back follows below.

Prof. Gabel

———————————————————————————————————-

Roger Well is a 1986 graduate of Monmouth College, with a degree in geology.  He was born in Alton, IL, near St. Louis, but grew up just west of Macomb in Lewistown. He is the Chief Operating Officer (COO) and was part of the founding management team of ENFOS Inc. (http://www.enfos.com/).

Roger Well has never backed down from a challenge.  In fact, the harder the challenge, the more he seems motivated to succeed!

While a student here at Monmouth College, Roger ran track as well as played football.  He noted that he was a captain of the 1985 conference championship track team that started the track and field dynasty here at Monmouth.  Could that have led to the motivation and drive he needed to build a business dynasty that ENFOS appears destined for?

After graduating from Monmouth College Roger went on to receive his Masters in Geology from Toledo and an M.B.A. from the Keller Graduate School of Management in Chicago.

Prior to helping found ENFOS in 2000, Roger was the regional VP of Handex, an environmental consulting firm based in New Jersey.  Roger tried to tell the CEO of the company that they needed to sell software and not just “time” (meaning services billed by the hour).  The CEO disagreed and informed Roger that their clients did not want to buy software and that their company would not diversify.  Roger, being the man he is and never giving up on a challenge and going after what he believed in, looked for help to realize his vision.  Roger knew enterprise software held potential for changing the industry and generating large profit margins in the environmental services industry.

Roger met up and teamed with his former boss at Handex, Craig Modesitt.  Craig also shared this company and software vision.  So in the fall of 2000, the company was started in San Mateo, CA. According to Mr. Well:  “Once Craig had the business running, it took me a couple of months to unwind an employment agreement with my previous company.  When that completed, I was able to join Craig and the software engineering team in January 2001.”

Craig and Roger were on the right track.  They had a world class engineering team as well as no debt since they started with private investment by an angel investor and founder. They have built a successful tech startup without the need to incur debt or venture capital.  Building a company like this with no venture capital or loans is called “bootstrapping.” With this approach, you grow the company off of profits raised through operations.

Craig and Roger are trying to build this company called ENFOS, but what is ENFOS?

This took me a while to understand.

ENFOS is a company that offers software services to companies who hold a potential risk to the environment such as gas, oil, chemicals, manufacturing, and rail companies.  In the United States we are at the point of having good environmental sustainability, but it could be better, and this is where ENFOS comes in.

ENFOS offers companies SaaS (Software as a Service) cloud management on per year subscriptions that are on a three to five year basis.  The software helps manage environmental liability.  When a customer has a subscription there are module tabs on the software cloud product that offers services such as finance management, compliance management, environmental data management, and geological management.

Everything is all online through the ENFOS website. There are NO software downloads needed to use ENFOS services.  The SaaS may be thought of as “configurable” software, but it is more of a “COTS” product.  Custom software gives the intellectual property to the client.  COTS (commercial off the shelf software) is the same product for each company that uses the clients info that is used to help manage many aspects of the client company and is configured to each client.  Using COTS, intellectual property rights stay with ENFOS (a major issue when it comes to holding on to a competitive advantage in the marketplace).

Going back to the beginnings of ENFOS…

As a young company with only six employees, Roger and Craig were able to land their first customer.  This took almost two years but it was a BIG first client.  This customer was one of the largest Global companies; British Petroleum (BP).  After landing BP in 2002, ENFOS was able to land Conoco Phillips and later old GM (RACER Trust) and Pacific Gas and Electric.  This started many successes for Roger and Craig.

ENFOS has been able to grow at 30% a year or more. The revenue that ENFOS sees is used for reinvesting, potential hiring, and implementing new projects for customers.  With growth ENFOS is looking to move into other markets.  Right now Roger and Craig are in the process of moving into China in a big way.  China will be the largest growing market for environmental services and software and ENFOS hopes to capitalize on this.

Through hard work and determination, Roger Well was able to help create something larger than life that Roger hopes will become a huge multinational company.  Roger has a passion for industry and environmental protection and is on the right track to changing the world and pushing for greater environmental sustainability!!

 

 

600 Shades of Fire-Engine Red: Customized World-Class Manufacturing at the Alexis Fire Equipment Company

On Tuesday 25 February 2014 the Midwest Entrepreneurs class boarded two Monmouth College “turtle top” buses–piloted by your humble narrator and co-instructor Mike Connell–and headed north and east to the farming town of Alexis, IL (population 823). What we saw there was absolutely amazing.

I turn to student blogger Darnell McKissack to tell the story…

But please pay particular attention to his discussion of how what is viewed as a “goods manufacturing” company uses CUSTOMIZATION-BASED SERVICE to gain and sustain a distinct competitive advantage on a global scale. This is an issue I feature prominently in many of the classes I teach here. It would be hard to find a better example than this!!

Prof. Gabel

——————————————————————————————————————–

Tuesday, the class took a field trip to the tiny town of Alexis, IL. There, we encountered and learned about a world-class, high-end, manufacturer of customized fire engines and other fire equipment; the Alexis Fire Equipment Company (http://www.alexisfire.com/).

We met with President Jeff Morris, who described himself as the “an SOB; the son of the boss.” While leading the class on a tour of the expansive facility, he began the story of his family’s business by describing how the company, founded in 1945, originally started by making general items such as wagons. However, one day in 1947, they were asked to make a fire truck. As Mr. Morris put it: “someone just asked us to make one.”

The company has since grown into one of but several high-end, completely customized fire engine producers with sales all around the world. Overall, the company competes in a really unique but highly competitive market of only about 300 fire engine manufacturers with around 2500-3500 units sold in the United States in any given year.

But the Alexis Fire Equipment Company–based exclsuviely in the tiny town of Alexis, IL–stands out on the basis of a distinct competitive advantage!!

The key to this company’s growth and ongoing success is customization and a focus on serving each customer’s specific and unique needs. Their sales team meets with clients on a daily basis early in the sales cycle. Maybe most importantly, they seek to create THE specifications for that particular customer. This gives them a competitive advantage because their competition has a hard time coming in and bidding on a truck that Alexis has already set the specifications for. These specifications deal with anything from which of the 600 different shades of “fire-engine red” paint will be used to having more water pressure, computer-programmable and remote-controllable sirens and emergency lights, and any of a wide variety of other accessory equipment.

One big but wise investment the company has made that helps them with this customization-based competitive advantage is a $300,000 water-pressurized cutting machine used to cut sheet metal and steel into whatever shape is needed. They can build fire trucks that sell for anywhere from $60,000 to $1 million. Maybe most impressive is that the company custom builds every part of the fire engines (outside of the core chassis and drivetrain, which is ordered from major trucking or auto companies per customer preference and need).

Mr. Morris told us in detail about several large sales to clients in Saudi Arabia, China, Mexico, and Canada. This is truly a global company in a very tiny town.

As Jeff Morris summed it up: “There is no dream or business too big for a small town like ours.”