Entrepreneurs mentoring business owners
Ron Stauffer, Sherry Newman, Tim Sierks, Nathaniel Grev, Derick Vigstol and Scott Berry are drawing on the life lessons of longtime Princeton business owners Lee Steinbrecher and Dan Erickson on how to run a successful business.
Stauffer, Newman, Sierks, Grev, Vigstol and Berry are business people who are doing this as students, so to speak, in a new Princeton Area Chamber of Commerce (PACC) mentoring program called the Business Success Group. The way it works is business people sign up for a fee to meet regularly with Erickson and Steinbrecher who teach on a myriad of issues for running a successful business. Topics include having a business plan, budget forecasting, finding a break-even point, identifying the fixed and variable expenses, as well as determining who will be the customers and who is the competition.
Erickson has been a co-owner of the local Erickson Asphalt, with his brother Brian, since 1990, while Steinbrecher has been the owner/operator of Steinbrecher Painting since 1978.
Both told the PACC board they were interested in being mentors in such a program after having learned from business consultants and also from the hard-knocks school of owning and operating businesses.
Hard-knocks business backgrounds
Erickson, who grew up in Scandia and attended high school in Forest Like, started a company called Metro Sealcoating when he was 14. He was only able to keep the business alive until the winter of 1981-82, when he was paying his bank $1,500 per month and he wasn’t generating income. Besides it being the off-season, the business had been buffeted by a recession, he explained, and the bank repossessed his equipment in the spring.
“It’s humiliating,” Erickson said. “It’s a blow to the ego.”
It’s easy to look back, but “I made every mistake possible” in starting a business, Erickson said about the venture. One of the big lessons is to prepare for a recession and to keep the overhead (expenses) as low as possible.
Erickson next worked in a Twin Cities cabinet business for a while and after that started AM Painting, later selling his share in it to business partner Mike Sandin. Erickson Asphalt, that he co-owns, has been growing in the last two years, with a 17 percent gain just last year, he said this week.
One of Steinbrecher’s hard business lessons was the Princeton Decorating Center store he started in downtown Princeton in the late 1970s. He got his start-up funds from a local bank without providing any business plan. He learned the hard way about that, having to close the Princeton Decorating Center paint store in about 1980 as the bank repossessed the building. He should have realized from the beginning that there just wouldn’t be enough paint sales in Princeton to keep the store going, he said this week.
“That’s just devastating and it comes from not having any business knowledge,” Steinbrecher said.
How the program works
Local attorney Scott Berry, who is in the PACC business mentor group, initiated the program which started six weeks ago. Participants each pay $25 per month to belong during the first six months of the meetings. After that the fee goes to $100 per month, with the group existing as long as the participants want. The $100 fee is cut in half for a participant if they meet goals set for them quarterly as part of the lesson plan, Berry explained.
The participants have to be accountable in meeting the goals and also learn through critiquing each other’s business operations, Berry said.
One of the things that Steinbrecher says he learned and that he and Erickson are trying to teach in the group is the importance of making a profit, and also determining the business’ “break-even point.” That is the amount of gross profit needed to make a net profit.
By putting all the expenses on paper, the business owner might learn they would be better off working for someone, Steinbrecher said. Even though business ownership has the attraction of not having to work for someone, the other side of having a business is not being able to walk out the workplace door and forget everything there.
“You never get away from your job (as a business owner),” Steinbrecher said. “I always think of the sleepless nights and some of the things your family has to put up with – the long days and weekends trying to make it work. Owning a business is sometimes all consuming.”
Berry and Steinbrecher envision that either Steinbrecher or Erickson will break away from the mentoring group at some point to start a new group to mentor.
“This is tremendously valuable to me to be in the room with other business people,” said group member Grev, owner of a local auto and light truck repair business called Integrity Engineering. He said he has benefited from the encouragement from others in the group, but also has learned about being accountable in maintaining a “quality work environment” and appreciates the “honest feedback.”
Group member Vigstol, who owns and operates Rum River Home Inspections, says his biggest benefit is learning from the business mistakes of others. “Something I didn’t even know about was the break-even analysis,” he said. “I had not thought to do that.”
Group member Newman, of Elk River, an independent contractor with a Masterminds and Mentors franchise, makes a living coaching business people on how to improve their work situation and that of their employees.
“Just the power of minds coming together and working toward a common goal and how powerful that result can be,” is what Newman said she sees as the benefit in being in the Business Success Group. She is hoping this will help her with the goal of expanding her business.