Key Idea #1: Buy A Business You Love
Bill and Pat used to be regular customers at Mickey Finn's and Pat bought the business because he loved being there. Since he was tired of his big corporate job he figured he could turn his hobby of drinking beer into a way to make a living. Bill observed Pat running the place and he too loved hanging around Mickey Finn's.

Topic for Discussion: What did Pat and Bill fall in love with?

Answer: The location, the history and the crowds. Mickey Finn's is an establishment, an institution on Libertyville's "Main Street." Just like a shopping mall, The Main Street Association works to promote activity in this historic business district. The bar is 100 years old and is steeped in charm and tradition. Also, before the expansion, they had to turn people away. Twenty-five miles north of Chicago's O'Hare Airport, thousands work in Chicago and love to escape "to the country" to find fun, food and relaxation. The research showed 28,000 cars drive by everyday.

Bill and Pat's research also revealed that a brewpub needs four things to be a success. The first factor is location; the second is consistent, quality food that's priced for value; the third is consistent, quality beer that's priced for value; and, the fourth is staffing. These partners were confident that since they had the right location, they could work to deliver to customers the other three factors and they have done it.

You think about it: What are the key factors for success in your industry? How does your business score high at everything on that list? does your trade association provide benchmarking? If yes, how do you measure up to the national standards?

Key Idea #2: Write A Plan Based on Research
Bill spent two years doing research on brewpubs while he was still employed by a large company.

Topic For Discussion What did Bill's research reveal?

Answer: There was no handcrafted beer in Libertyville, Illinois; 28,000 cars drive by Mickey Finn's every day; and, brew pubs have a much higher success rate than do restaurants. By actually visiting these places, he got a "feel" for the business from many points of view. He talked to brew pub owners and customers, and also sampled dozens of handcrafted beers. In addition, he made notes on square footage, hours of operation, decor, furniture, floor surfaces, wall coverings and signage. He learned about how to attract and hire great people and about how beer is made -- all from people who are already doing it.

Topic For Discussion: Did Pat Elmquist do research before he bought Mickey Finn's?

Answer: Not that we know of. He was simply a customer who saw that the place was always full. He wanted a change from corporate life and figured he could keep Mickey Finn's as successful in the future as it had been in the past.

Topic For Discussion: Why did Bill have to spend 2 years and write a business plan while Pat bought Mickey Finn's six weeks after he started thinking about it?

Answer: Bill was proposing a huge change in Mickey Finn's while Pat took over an existing business and possibly didn't need a bank loan. If the original owner had carried the financing, Pat could have sealed the deal on a handshake. Bill wanted to buy the property adjacent to Mickey Finn's, knock out a wall, add a building and install the equipment necessary to make the handcrafted beer. He also wanted to enlarge the kitchen. Bill had to convince Pat and a banker that expanding Mickey Finn's would pay off for everyone.

You think about it: Have you every put your goals and plans in writing? Have you ever had to convince others to invest in your business or to make you a loan? Have you ever tried to recruit an experienced person who wanted to see your business plan?

Key Idea #3: Choose A Visionary Banker
Bill and Pat prepared to talk to the banks by doing extensive research and writing a detailed business plan

Topic For Discussion: Did the banker choose Bill and Pat or did Bill and Pat choose the banker?

Answer: In most cases, small business owners have to "beg" a banker to make them a loan. Bill and Pat approached the entire money-raising task with bold confidence. Because they were so well prepared and their research so detailed, they had five bankers who wanted to make them a loan. They choose the one who focused on the vision of investing in a place that would have great potential to contribute to the community. They rejected bankers they felt were negative.

Topic For Discussion: How does a growing business demonstrate that it is bankable to a bank?

Answer: Bankers are not risk takers. They operate on a very slim margin; the differential between their cost of money and the interest they earn on outstanding loans must cover the cost of bank operations and provide a reasonable return on investment to the bank’s stockholders. If a banker makes a bad loan -- a loan that has to be written-off -- it is the same thing as when one of our customers doesn’t pay us. The write-off is equal to the sales or revenue amount, the labor and inventory costs have already been incurred. The loss goes right to the bottom line. All companies have bad debts. In fact if you don’t have bad debts, your credit policies are too tight and you are losing sales. But companies that operate on a slim margin, such as banks, have to be particularly careful to minimize uncollectible amounts.

Obtaining a loan with less than a year of operating history and without collateral is very difficult for a small business owner. You must be prepared to shop and shop hard. Anticipate rejection and you will not be disappointed. Like Shiv, you are more likely to be successful at a community or local bank than at an office of a regional or national bank. Larger banks have stricter internal policies; smaller banks tend to vest more decision-making authority in the banker.

If you feel your business loan will be difficult to obtain, before approaching a bank, prepare a written financing proposal. This proposal should include your business plan plus the following:

• Projected financial statements
• Resumes of key management
• Current customer list
• Current supplier list
• Amount of financing requested and purpose of funds
• Demonstration of capacity to repay

In short, everything! You really want your banker to know you and your company. When you obtain an expression of interest, invite the banker to your business and show him or her how you operate. Inspire the banker with your passion for business and your loyalty to your business partners. If the banker believes a risk now on a small loan will lead to a big customer borrowing large amounts, then he or she will be much more likely to step outside of conventional bank financing parameters.

You think about it: Could you grow your business quicker with bank financing? Are you bankable?

Key Idea #4: Tighten Your Belt
Bill and Pat convinced their wives that getting the $2 million dollar loan would result in an improvement in their networth long term.

Topic For Discussion: What did both couples have to do during the business expanion period?

Answer: They had to cut up their credit cards and cut back on all expenses. With a big monthly loan payment, the owners could not afford to pay themselves the type of salaries and benefits they had earned while working in big business.

You think about it: If you decided to invest in expansion, would your family be supportive?

Key Idea #5: Hire Experience You Don't Have
We've seen it all. A person gets an idea they want a certain type of business then they go out and get the training to accomplish the goal. Or, a person gets an idea and hires people who already know how to accomplish their goal. Bill and Pat had no clue how to make beer and they knew they didn't have the time or the talent to learn so they hired the experience they didn't have themselves.

Topic For Discussion: What is the benefit of hiring a seasoned veteran?

Answer: In the case of Mickey Finn's, by bringing in a third generation brewmeister they not only hired know-how, they hired confidence and creativity. These are the traits needed to meet the unquenchable thrist of brewpub customers who always want to try something new.

You think about it: What would you like to achieve in your business that might require you to hire a new expert? Where would you find that expert?

Key Idea #6: Hire Personality and Teach Skills
All service providers learn this hard lesson one way or another. Many have to hire and fire, hire and fire, hire and fire until finally it dawns on them that just because a person has experience and knowledge doesn't mean they can provide to your customers what the customer is truly buying from you. Bill is saying he can take any person who likes people and turn them into a first-class server. But, he can't hire someone by reading a resume and he is not looking for a person with years of experience in the restaurant business.

Topic For Discussion: Why is it so important for servers to like people?

Answer: The cooks make the food in the kitchen and the beer is made in the brewery by the brewmaister. The only job a server has at Mickey Finn's is to take care of the customer - properly. If you like people, you have a much easier time achieving this goal.

Topic For Discussion: How does a server please a customer?

Answer: Greet the customer with a smile and a welcome. Listen! Listen carefully. Read the body language of a customer. If they're in a hurry, you be in a hurry. It they are relaxed, you be relaxed--but not slow--to deliver drinks and food. In fact, moving quickly is part of the corporate culture at Mickey Finn's. Customers can chew as slowly as they want, but Bill and Pat hope they will eat and drink a lot, then pay and leave. This is not fine dining which has a much slower pace than family dining.

Topic For Discussion: What does Bill ask employees to leave at home when they come to Mickey Finn's?

Answer: Their troubles. This doesn't mean he doesn't care about his employees. During off-hours, he'll spend time sorting through problems with employees. This means: our customers are here to have fun, laugh, relax and enjoy themselves. The employees have to "put on a happy face" to help the customer have fun. This is "dining as entertainment" and is very much the new reality in most restaurants. People don't want to just eat when they go out, they want an experience.

We suggest that providing service to customers over and over is emotional heavy lifting. Just as a roofer does the heavy physcial work of carrying tiles up a ladder, a service worker is dealing every moment with the unseen feelings of every customer. The service worker then can succeed only if they have the natural ability to interact easily with many different types of people who are all strangers.

Topic For Discussion: What does Bill look for when he interviews potential servers?

Answer: He looks for strong communication skills and excellent body language. Another way to explain body language is to say he looks for a person who expresses themselves with their face and hands. He watches to see if the person mirrors him. This tells Bill if the candidate will be able to "read" the customer, which is the key to success in a service position.

Topic For Discussion: What did Bill and Pat learn from their experience working for big companies?

Answer: Everything they knew about business, both good and bad. The good lessons included how to put ideas in writing, how to forecast sales and how to produce and measure a quality product. The bad lessons included too much short-term focus to increase shareholder value and the "slave driver" mentality when it comes to handling people. In other words, they learned from big business how not to treat people. They have created a fun place for nearly 100 people and they're not worried about short-term profits. This is a lifestyle for Bill and Pat - they wear shorts and ball caps to work. They are not trying to grow the business quickly in order to sell it off and retire.

You think about it: xxx

Key Idea #7: Decide To Grow.
Here are two men who were willing to take their idea to the bank, the SBA and the Main Street Program. When Mickey Finn's was doing $500,000 in sales, these two signed personally on five large loans. Today, with over $3 million in sales, this brewpub is proof that with an infusion of capital for a well-researched idea, entrepreneurs can grow a business and create jobs. Pat Elmquest and Bill Sugars have realized their dream of providing a meeting place for Libertyville and bringing nightlife to a once-quiet downtown.

Topic For Discussion: Why did Bill and Pat have to personally sign for the bank loans?

Answer: The cash flow from the existing Mickey Finn's Pub was not big enough to take on this large debt. Think of it this way: a company has a net worth and individuals have a net worth. To qualify for the $2 million, Bill and Pat had to put their houses up as collateral and use most of their personal savings for a down payment on this loan. If the business fails, Bill and Pat are still liable to pay back the bank. If the business had enough net worth to qualify for the loan and the business failed, Bill and Pat could legally walk away from the debt.

You think about it: Could you grow with an infusion of cash?

Key Idea #8: Do Whatever It Takes
Bill said most people just don't realize what owners do to make things work. He admits that he still cleans toilets.

Topic For Discussion: Why would the owner be cleaning toilets?

Answer: Because it needs to be done. Sure he has someone assigned to the task but if that person doesn't show up or if Bill goes into the restroom and feels it needs cleaning right then, he just does it.

Topic For Discussion: What do Bill and Pat do every single day?

Answer: They show up. They rarely show up at the same time but most all of the time an owner is present at Mickey Finn's. They believe they get the best work out of their employees if they are physically present and they believe that customers love to see and talk to the owners.

Topic For Discussion: How do owners sustain enthusiasm?

Answer: We see our work as our play. At 90 years of age, Ebby Halliday is still coming in to work everyday because there is nothing else she would rather do.

Think about it this way. When kids are sitting in a classroom studying a subject they don't like, time seems to stand still. When the bell rings to dismiss the class, the kids shoot for the door with an incredible force of energy that has been building up during the course of the 50-minute class. On the playground, the same kid that was nearly asleep in class, is running to dodge a ball or put one over home plate.

Unlike kids, adults get confused between work and play. We're not psychologists, but we know what we see and how we feel. Kids are honest; they don't fake it. The saddest thing in the workforce is a person who actually thinks work is work. The right attitude is to see your work as play. Child psychologists say that play is the work of children. So, why can't work be the play of adults? At Small Business School we say that a job is something you are doing when you would rather be doing something else. Fortunately, most small business owners don't have a job, they have work that seems as if it is play. To get to this place they have made the right choices for themselves. People who don't understand this concept actually think small business owners have it easy because it seems as if we can do what we want when they want to do it. However, we arrived at our position through putting forth years and years of effort. And all along the way, we actually thought what looked like to others to be work was play.

You think about it: Do you see your work as your play? Does this frustrate your family since it probably means you spend long hours working?

Key Idea #9: Find Your Place To Serve
All of us who own our own business expect to make money. In fact, the more money we make the more people we can hire and the more customers we can serve. In addition to making money, the business owners in our library are big-hearted and generous.

Topic For Discussion: Why did Bill focus in on a retail business located in a small town?

Answer: He was an Army brat and then went to work in a big company where his job required him to travel. By the time he bought in to Mickey Finn's he had reached the conclusion that he wanted to put down roots. He wanted to know everyone's name and he wanted others to know him. He wanted to be part of the leadership in the community that would influence the future of Libertyville.

Here at the Small Business School, we've studied many successful small businesses. We always ask the business owners about their motivation for starting and operating the business. No one has ever told us they started their own business because they wanted to make a lot of money and that they operate their business to make as much money as possible. Instead, we hear time and time again that small business owners believe if they have a good plan and execute it well and fairly, the money, well it just comes.

Michael Novak, the theologian-in-residence at the American Enterprise Institute told us that there is a difference between self-interest and greed and that self-interest is good but greed is bad. Bill was not being greedy when he came to Pat with a great idea to expand Mickey Finn's. He was interested in being an owner of Mickey Finn's and making it prosperous enough to support two owners and many more employees. Bill was interested in working in Libertyville and making friends and working to improve the entire historic business district.

What are you interested in? What are you trying to accomplish in your business? If you are motivated to provide a high level of customer service, to produce a quality product, to establish a nurturing environment for your employees, then that's your self-interest. That's what is important to you. That's not greed because greed is gluttony and avarice, the motivation to improve one's own lot without any consideration for others. Self-interest, on the other hand, is our passion, what motivates us, why we start our own businesses and make successes out of them. The Bible says, "Man does not live by bread alone, " you need some beer. Just kidding. Bill and Pat love being of service. It is rewarding and satisfying.

You think about it: What's your self-interest? What product or service could you offer that would bring you greater satisfaction? What could you do to improve your entire industry or neighborhood?

Key Idea #10: Build A Customer Database
Many people dream of having thousands of customers but only a few do the work that must be done to find and win them. In the book, Good to Great, Jim Collins writes that great companies pay attention to details and no task is too tedious. Collecting the name, address, phone number, email and buying habits of every customer is tedious and Sue Montgomery does it.

Topic For Discussion: How does Sue leverage her own mailing list?

Answer: She and her fellow merchants on the main street of Libertyville share their lists with one another and send a joint newsletter to promote their shopping district. If she had NO list to share she would not be considered a player and not have the opportunity to spend her marketing dollars in this efficient way.

Scott and Marthalee Mooney are the owners of Country Supply. They are part of our library here and they told us when they started building their mailing list that no task was too small. They started before there was such a thing as a PC. The couple would go to the library in their small town to search the newspapers and they hand-copied the names and phone numbers of people who were selling horses or equipment from newspapers' classified ads. Often there was only a phone number in the ad so they would call the number and ask the person's permission to add their name to a mailing list for a catalog offering low-priced horse care supplies. They were young and did what they could afford to do. Marthalee typed up the lists and for the first few years they made photo copies of the lists, cut the lists into labels and glued them on to the self-mailer catalog.

Today their company has 450,000 names in a very sophisticated database and the business generates $17 million in revenues.

You think about it: Do you know who your customers are? How do you communicate with them?