Vincent Aguirre:               All right everyone, I am back. This is episode five. I know it’s been awhile since we’ve had an episode so I’ll reintroduce myself. My name is Vincent Aguirre, President of Distinct Web Design. I do have an excuse. I haven’t been around because I’ve been studying to become a REALTOR and by the time this goes live, I will officially be a licensed realtor in Indiana. So if you’re looking for anyone to help you buy or sell your home, contact me.

Hopefully by this point you know that I [00:00:30] enjoy marketing, especially online, and I hope to bring those skills to people hoping to sell their homes particularly using our drone and audio video equipment to help get eyeballs for the home and give them a good price for their sale.

But now that that’s done, all my testing is complete, I’m back in action with Web Design and with podcasting. I’m really hoping to add a lot of new podcasting the next couple of months. Hopefully working on a podcast on [00:01:00] sustainability and technology with two local experts here.

This podcast I’ve been really looking forward to for awhile. It is with a gentleman named Ken Eitel who has really helped me grow my business along with countless other people around Indiana and in this area in particular. Ken is a very intelligent entrepreneur. He’s been an entrepreneur for most of his life and really has continued to keep up with trends [00:01:30] even after getting out of business and going into more of a consulting role.

We talked about a lot of different aspects of business, not even technology necessarily, but just business practices and my goal is for this webinar to be the go-to resource for anyone looking to start a business even if they’re not planning to have a website right away. This isn’t even about this, it’s just about business in general.

Ken invited me in his home to do this and it was a great conversation. I really enjoyed it. He has a lovely home. At some points you might hear some raindrops [00:02:00] on the balcony outside of the window, you might also hear a grandfather clock go off a couple times, but I’m going to try to edit that out by the time this goes live, but you might hear it. I apologize if you do.

Otherwise, I hope you learn a lot from this episode and look forward to some more episodes coming in. Please remember to rate our podcasts on whatever app you’re using especially if it’s iTunes. Follow us on Facebook or Instagram. Share this with your friends, anyone who you might see benefiting from [00:02:30] it and thank you for you support.

So I’d say let’s start first with introductions. Telling us about yourself and your experiences.

Ken Eitel :                           Well, my name is Ken Eitel and I am a retired retail business person who was in retail for almost 50 years prior retiring. Lived in Green Castle all of my life, grew up here. Worked in several different businesses, have taught classes [00:03:00] and I guess been a little entrepreneur with my life.

Vincent Aguirre:               Can you go a little bit deeper on some of your entrepreneurial experiences?

Ken Eitel :                           Well, I started as a furniture and appliance salesman and eventually went into the marketing and sales management part of that business. Learned to be creative and how to market, how to approach customers to look for what they were satisfied with. Did own a small portion [00:03:30] of the furniture store, but the opportunity came to purchase my family’s flower shop after my father had passed away. And it not only held some tradition, but it was a good business opportunity.

So with the encouragement of my wife we purchased that from my mother and ran that for 30 or 35 years and everyday was entrepreneurial. You really never knew kind of what you might encounter at the start [00:04:00] of a day, but in the bigger picture we did a lot of diversifying and experimenting with different product lines and gift lines. And that business changed over the 30 to 35 years dramatically. So you were always adjusting to competition and adjusting to holidays and all the things that go along with … really never kind of knowing what was going to happen when you opened the doors and the phone started ringing.

After that, or prior to that, [00:04:30] I went back and got my degree so that I could teach and taught at Ivy Tech both at Green Castle and Terre Haute and online in the business area. I taught leadership, entrepreneurship, marketing, basic business 101, business communications, business law.

Just a number of different experiences there and then later in that career, once we sold the flower shop, I was able to be the part time director of the [00:05:00] Business and Entrepreneurship Center and met a number of very interesting, motivated individuals who were interested in starting their own businesses and just was really honored to be part of some of those success stories.

Vincent Aguirre:               That’s awesome. What would you say in your time, this entire entrepreneur career, what’s changed the most when it comes to business?

Ken Eitel :                           I think the obvious change is the internet [00:05:30] and the dramatic impact of online commerce has had. But I’d also say that over that period of time, the way you finance a business, the challenges with raising capital, particularly for a new business. I was fortunate to buy a family business in a very favorable way from my mother, but while it was not operating in a profitable way at that point, there was tremendous potential.

[00:06:00] I realized in working with a number of entrepreneurs that it’s fun to plan and it’s hard to finance and I think that credited had tightened considerably and there is a real gap in the ability of start-ups to raise enough capital to really launch the way they need to.

So I think that’s been a real change. When I first started, if I needed a credit line I had the kind of personal relationship with the banker and experience [00:06:30] and background that I could just request a certain amount of money for six months or twelve months and just sign on the dotted line. I don’t see that at all the case anymore. That’s another area that I think has changed.

I think from the standpoint of the consumer, the consumer has become very much bargain oriented, for the lack of a better word, very price conscious and I think we see that in today’s markets [00:07:00] where you really have to be either a discount business of some kind. But if you’re going to offer a service, you definitely need to be at the higher end of those price points. So I think that’s another change.

I think another change that I saw, at least in our community, was the transient nature of the consumer. Our business depended, and still does, on families and what you might call roots in a community which builds awareness of who you are [00:07:30] and return customers. But today many children no longer live in the same community as their parents and conversely a lot of parents don’t live in the same community as their children. So you don’t have that generational consumer base, I think that you once did.

I think there’s other more subtle changes. Changes in the type of community we have in terms of the type of employment we have relative to a very much white collar community when IBM [00:08:00] was here. Very much a community now that is, I don’t think manufacturing is the correct word anymore, but very much highly skilled and not necessarily what one knows as white collar. That’s had, I think, an impact in a number of areas, not just in business and the types of businesses that can do well here, but also I think in the social fabric of the community as well.

Vincent Aguirre:               Interesting. So I picked up on something [00:08:30] earlier that I want to kind of dig into. You said when you took over the business it wasn’t necessarily profitable. What types of things did you have to do and how did that look? The process of taking over to making the business profitable?

Ken Eitel :                           Everything goes through cycles. One of the things you learn in business class is that if you peaks and you have valleys. At the time that we purchased the flower shop it was in a trough. It had gone through managerial changes, it had gone through losing my father [00:09:00] as manager. It was something that my mother wasn’t interested in continuing to do. So I guess it was at a position where someone who could see the future, who could be creative, who understood the markets moving forward, would have that opportunity I think that we saw.

Spent a lot of time analyzing the financials before making the commitment. But we realized that we were only selling flowers and plants. So if we were going to support ourselves as a family, [00:09:30] because it wasn’t just my wife and I, we had children. We were going to have to someway build the volume.

We diversified into gifts. Our first diversification was in Garfield. Garfield plush animals, Garfield cups, Garfield bowls that we could plant things in or do flower arrangements in. That was the first of many and then as that continued to grow, [00:10:00] we added country-crafty type gifts. Now you need to remember this was mid-1980s and so what we know now as the country trend had maybe just started.

We did really well with that for six years and through that period of time and on what I could call the collecting trend started. Where people [00:10:30] would collect things. Things like Beanie Babies, things like Boyds Bear, things like geese and ducks and roosters and turtles. While that changed kind of each year to the flavor of the year, we were able, by going to gift shows in Atlanta and Chicago and Columbus, Ohio, to stay ahead of some of those trends.

But we did try and make an effort to, [00:11:00] anything that we diversified into needed to be related in someway to our core business which was flowers and plants. So essentially our mission statement became our diversifications had to be related to the senses. It had to express feelings, you had to have a scent to it, it could be floral-related but it could be pleasing to the eye. It could be artistic. So there’s just at number of different things.

Before we added a product line, [00:11:30] we would make sure that it met our mission statement in some way related to that. Over a period of time, we began to, because of our wedding business, we began to carry things that could be bridal gifts. And we eventually got in Pfaltzgraff pottery and place settings and crystal and other things that would be wedding gifts.

At that point in time, [00:12:00] we began to experience the fact that if walked out and walked back in our store, we looked more like a gift store than we did a flower shop. The challenge with that was no matter how good our gift business was we were still 80% floral or floral-related products.

We began to think about what does the customer perceive you as being? So about that time the local Hallmark store closed across the street and moved to one of the strip centers. [00:12:30] So I thought this was a great opportunity to what I call go outside of ourself. We essentially moved most of those gift lines and bridal registry across the street into where the Hallmark store was.

So that was, though while not my first, one of my largest business failures. Not failures, but I wasn’t successful at. We were open four years, I never paid myself anything, we never showed a profit. We were constantly trying to inventory the store [00:13:00] and that was also about the time that you began to see online bridal registry.

The other thing that you saw and is still here today is that the bride and their family that would be good prospects for a bridal registry, often were the type of bride who had grown up and gone away to college. And often times while some would come back here to get married, often [00:13:30] times they had already established a life elsewhere and that’s where their friends were and that’s where their wedding was.

So that market for a small retailer that was trying to do a bridal registry in a community like Green Castle began to deteriorate pretty significantly. Eventually we closed that store, came back in, did not bring the bridal registry back. Just closed it down essentially and went on doing what do, which is flowers [00:14:00] and gifts.

I learned with that experience that I could not run multiple operations. My management style or personality just was not such that I could completely let go of a second location or multiple locations, at least at that point in my life.

Vincent Aguirre:               That’s good. So you talked a little bit about failures just [00:14:30] now, or businesses that don’t necessarily succeed. Kind of tying into that, if you could back to your first day, the first day you considered yourself entrepreneur and go about your future differently, is there anything you would do different looking back? What have you learned that you didn’t know when you started off?

Ken Eitel :                           How long do we have?

Vincent Aguirre:               As long as you need.

Ken Eitel :                           The mistake with the gift store was just [00:15:00] assuming because there was a Hallmark store there and that because we were successful in the flower business we would be successful across the street in a gift business. Probably did not take the advice that I usually have given people I work with, of making sure that you know your market.

The flower business that we purchased had been here, at that point, for 70 years. I had grown up here, I had the name recognition, the market was already there. Just [00:15:30] a lot of different reasons. Advantages that most people starting up don’t have and I can assure you that having that available, I can look back now today and appreciate that that was almost priceless.

So I think in terms of start-ups, I’d do better research. We did in the flower shop, we were bringing a new product line in. We would only do a minimum order to start with and sample it [00:16:00] and if it sold out quickly, we’d then go back and order a much more sizeable order. We did a lot of market testing that way.

I think that I probably would have learned sooner a different management style. My early management style was very much hands-on. Maybe not authoritarian but very much hands-on. Maybe not micro management but fairly close to that. [00:16:30] I think I had a better staff, I think I had more satisfaction once I learned to manage from a more hands-off, encouraging my staff to be entrepreneurial and encouraging them to use their gifts and talents and allowing them to make some mistakes as well.

Ten years or so in we were not profitable [00:17:00] and we were really struggling with cash flow and took the opportunity to go to a FTD finance workshop and spent two days and came back and started costing everything that we put in our floral arrangements and realized that we were drastically under priced. We we not tracking our cost of goods sold well enough to cover our costs and that [00:17:30] is something that I should have known to pay more attention to.

Because one of the things that I did have early on in my career was eight hours of accounting at DePaul. So I understood what I needed to be doing, but wasn’t really paying the kind of attention that I needed to the minute details of pricing.

Vincent Aguirre:               Sure.

Ken Eitel :                           So those are some of the few things that I would do differently.

Vincent Aguirre:               Yep. Since we’re talking about the past and what you [00:18:00] would have done differently, if you could take one piece of marketing knowledge or technology, anything involving marketing that you know or have today, back to when you started, what would that be?

Ken Eitel :                           Well, it was a very different time. You could do what I would call mass marketing in newspapers and reach everybody. Because that’s the way people got their news and that’s how they got [00:18:30] the things of what products were available. Those kinds of things. If I would look back now when I think businesses and people are beginning to realize that while we have all thee communications tools, ultimately it’s all about having personal relationships with people.

One of the advantages that I think we had was because I had lived here, my family had lived here, my wife’s family had lived here all their life [00:19:00] and we had a lot of depth with personal relationships. The changes that have taken place over time in what, let’s just call that traditional marketing, that I would know. Of course newspaper-wise it became harder and harder to be recognized in a newspaper unless you did a full page ad.

And as everything got more expensive, it became harder for a smaller business to [00:19:30] be able to be recognized in a page of newspaper ads. So we began to use classified ads in the classified section. You could do just a little small ad that was four inches by two inches and dominate a page because everything else was copy. Well, that eventually changed too. It got crowded.

As we began to look at our marketing, as we began to look at how we reached our customers, [00:20:00] I sat down and did a full marketing plan and fully segmented everything I did. Interestingly enough I did that on an old Royal typewriter. That’s how long ago this was. That was my dad’s. I may still have that someplace.

But I took and segmented every market we had and figured out how I could best reach them. And when I did that I realized that while the newspaper was okay, [00:20:30] to really grow wedding business, to really grow special events business, banquets, the categories that we did well in which were birthdays and anniversaries and occasions where it’s expressing feelings, those things needed a different way, you need to reach that customer in a different way.

That’s when we began to move to direct mail and we did a lot of postcards. We developed [00:21:00] a program called the Forget-Me-Not, so if someone ordered for their wife’s birthday, three weeks before the birthday the next year they got a postcard. And what we found was that that usually went to the house, the wife usually got that and she usually set in on the husband’s dresser so that she made sure that he knew her birthday was coming.

That reminder program we used for birthdays, anniversaries and a number of other occasions that recurred. Valentine’s Day we would send things for Valentine’s, [00:21:30] for Mother’s Days, all of those kinds of things. So we transitioned into that and that was extremely successful. We did direct marketing to the DePaul students’ parents for specific sorority holidays.

We really segmented the market so that we could take and reach our clients directly. A lot of that knowledge came from a book called Guerrilla Marketing, because we could do that [00:22:00] kind of marketing and our competitors never saw it.

Vincent Aguirre:               Absolutely.

Ken Eitel :                           It’s not secret, but it was very much directly developing those relationships that you wanted with your customer. And there were several other things that we did in that area, but then as you began to see competition, and I don’t mean competition from other floral shops. At one time we had three other floral shops in Green Castle which made a total of four. [00:22:30] We now have one.

It’s just obvious the market itself has changed, but what changed more than anything was the competition from other products. Competition from candy, diamonds, almost anything that people will buy now to express their feelings has crept into the floral market.

From a marketing standpoint then, we begin to see with the availability [00:23:00] of 800 numbers you had to make sure that you had that because over half of our business was on the telephone. We had to make sure that people could reach us. At that point, we were still billing people on the 30 day charge who lived out of town and had open accounts.

Then came the advent of the credit card and that not only made it easy for anybody to buy anywhere, it made it easy for somebody else to call another flower shop in another city and order directly from them rather than [00:23:30] use a wire service through us.

The way you reach the customer has changed dramatically, but I would suggest that those personal relationships that people had when you had small communities and you had communities in courthouse squares where you had all your retail business in one place and the business owners got together. The business owners had relationships with families out in the community, that personal touch, people, [00:24:00] I think, are really wanting that from businesses today.

Vincent Aguirre:               Absolutely. I love realtor marketing by the way.

Ken Eitel :                           Good.

Vincent Aguirre:               Okay we talked about technologies that you had or you wish you would have had. What’s something you’re happy you didn’t have to deal with when you started off? As far as marketing or technology or ideas go? Or I guess you’re happy your competitors didn’t have?

Ken Eitel :                           Well, I think [00:24:30] technology is here today and it’s something that we obviously have to live with, but it has required a whole different discipline, a whole different skill set and a whole different time commitment, particularly for the small business man, that is really hard to execute in an effective way.

Vincent Aguirre:               [00:25:00] Mm-hmm (affirmative).

Ken Eitel :                           It was so much easier to call your newspaper representative and give them a rough draft of an ad you’d like to put in and have them create it and bring it back to you and look at it and place that then it is today to try and manage all of the technology that you have to have to cast yourself in a favorable image on the internet to really anyplace in the world.

Unfortunately all of that has been added on top of [00:25:30] the other marketing that you still need to do. So that’s something that I wasn’t particularly excited about.

Vincent Aguirre:               Sure. I can see that being a challenge. So obviously this is a Web Design based podcast. How would you say the internet and web design in general has shifted small businesses and entrepreneurship from your perspective?

Ken Eitel :                           First of all, it has enabled consumers to find you more easily. I think that if you present [00:26:00] the right image it can be a great advantage to you. But ultimately that consumer is going to want a personal relationship so it doesn’t take care of that. In my opinion. Of course, I’m of a different generation. Chatting with someone at a business online to try to get a problem taken care of is not necessarily what I want to do. And I think that is a change in marketing that’s here to stay, but I can assure you that you can’t stay up with it.

At some point you need to say, “I’m doing the best I can with the [00:26:30] technology that I have, but I just can’t keep adding the latest greatest thing because it will cause me to not pay attention to what I need to pay attention to.” In terms of new start-ups, one of the things I always remember, and it’s still true today, so many business books focused on people that were successful and the things they did to be successful and I think we still see that today on the internet and on Linkedin.

But that doesn’t paint the correct picture of entrepreneurship. Nor did it paint [00:27:00] the correct picture of being in business when I first started and was trying to read Forbes and everybody in there was successful and millionaires. I just knew when I was out on the delivery van trying to deliver a $20 flower arrangement, there was a lot more to it than what I was reading.

So I think possibly the internet and all this electronics has done more to romanticize technology and what it can do for you as an entrepreneur, because nothing takes the place [00:27:30] of hard work and persistence. I found, and I’m sure you have, that the idea that you set up a website and you open your business and everybody in the world loves you and you get rich, doesn’t happen.

Vincent Aguirre:               I wish.

Ken Eitel :                           I think that’s one of the drawbacks of technology and entrepreneurship and how it works together. On the plus side of technology, we purchased a point of sale system, [00:28:00] and I should’ve done it probably five years before I did it, where we inputted all of our orders directly from the telephone. So when we were talking to you, we were entering the order. But when we entered that order and when you were our first customer, we of course filled out all the information, address and so on.

But we also were able to track occasions. So if you ordered again for somebody’s birthday, when we printed the report the next year, it would pop up that you ordered a birthday and who you sent it to and what you sent and what [00:28:30] the card said. I firmly believe that we paid for our point of sale system by marketing.

For me the data and the profiles and the analytics that you can get from technology, that’s how you pay for it, that’s how you use it and I don’t think a lot of people do that well. I’m not sure a lot of people understand that it’s the data that pays for the technology.

Vincent Aguirre:               Mm-hmm (affirmative).

Ken Eitel :                           Then you have to understand how do I use [00:29:00] that data so that it increases my business? And that’s a very entrepreneurial thing. The other thing that’s enable people to do, I think, from that side, is to be able to do some things internally that you use to have to hire somebody to do.

Now our system was full general ledger. It had a payroll module that would write payroll, it had an accounts payable module that we could put our invoices in, it would age them. It wrote checks, billed [00:29:30] customers. It was a fully integrated general ledger system that then also had the marketing piece to it. So it took all of that data and made it useful for us a a business to be able to continue build personal relationships with our customers.

That’s a real plus, I think, for data, but it has to work and you have to understand it.

Vincent Aguirre:               Mm-hmm (affirmative).

Ken Eitel :                           Those are the things that small business people often [00:30:00] struggle finding the time for.

Vincent Aguirre:               Absolutely. So what would you recommend as kind of a blanket recommendation for someone who is just starting a small business or maybe they’ve been a small business owner for a short period of time? If you could only give them one piece of advice, what would that be?

Ken Eitel :                           Know your market. I think that too many people base going into business on the fact that they’ve got a great idea and they’re friends think they have a great idea, and this group [00:30:30] that they’re with in their silo think it’s a great idea, but they fail to realize that the larger market doesn’t agree with that or they’re competitors that you don’t see that are there that you can’t overcome.

Just like my analogy of the gift store of what I would do differently. Market research, testing your product, not just with friends but with people who would probably be more honest with you. And if your friends aren’t interested in it, then don’t do it all. [00:31:00] Those are the things that I would say are the key.

Then you have to understand what your costs are. You really need to understand. I heard somebody say that you take your budget and you double the expenses and halve the revenue and you might be close to what you think. On the other side though, I’ve seen people who’ve been very conservative with budgets, have hit the market at the right time with the right product and their business has just grown exponentially. That kind of [00:31:30] thing has a problem too.

You’ve got to know your market, you can’t create a market, it’s got to be there. You don’t have enough money to create a market. Those are two things I would talk about.

Vincent Aguirre:               Sure. Then something I’m really interested in, if the same person just starting business or maybe just in business for a short period of time, if you can give them one book recommendation, what would that be?

Ken Eitel :                           I’ve thought about that and I think there’s a lot of books that I could recommend. [00:32:00] Starting with Tom Peters In Search of Excellence which talked about IBM and why they were excellent. To a series of books by a guy named Toffler who talked about the coming technology 20 years before it happened. Naisbitt who wrote Megatrends, who if you go back now and look at the 10 megatrends, things like generational wars and some of the things that he identified are here now. Those things are and still really interesting to me.

[00:32:30] There’s the basic books like the Guerrilla Marketing to help with marketing. There’s an author by the name of Seth Godin, G-O-D-I-N, that writes little small books with big print that you can read in a half hour. Things like the Purple Cow and Linchpin and The Tribe that are really thoughtful and are really interesting.

If I think about management, probably one of the books that had the most impact was a [00:33:00] book called Servant Leadership by a guy named Greenleaf. Just basically the premise is that is if you will serve others and make an effort to make them better servants, that is a really good way to manage people. It’s a good way to serve your customer. If you serve customer in an effective way, they will serve you because they will be loyal to you.

But I guess if there’s a book that probably is the most impactful to me, it was a book written by a guy named Larry Burkett [00:33:30] called Business by the Book. And that book is based on principles of the Bible. Yes, it’s do onto others as you want others to do unto you, but there’s other things that talk about the way you treat people properly. The way that you manage your money that you keep debt to a minimum, if at all. There’s just a lot of wisdom in that book that were drawn from teachings that are centuries old that still apply today and make a wonderful management [00:34:00] tool.

Vincent Aguirre:               Absolutely, that’s great. Well, thank you for your time to take time out of your day and invite me to your house to do this.

To people who are listening, if they’re interested in keeping in contact with you in some capacity is there anywhere for them to email you or reach you online that you feel comfortable with?

Ken Eitel :                           You can use my email which is keneitel, K-E-N-E-I-T-E-L, @gmail.com. And that’s the current email that I’m using so that I would be [00:34:30] fine and I’ll respond. I’d be happy to talk with anybody. I’m no longer doing this as a business, but I think it’s always exciting to me to be able to talk with people who are interested in being creative and entrepreneurial.

Vincent Aguirre:               Sure. If anyone contacts you, I’ll encourage them to attach a receipt for a Starbucks gift card for your use as a compensation of your card.

Ken Eitel :                           Thank you.

Vincent Aguirre:               Anything else you want to add before we-

Ken Eitel :                           I think one of the things that [00:35:00] I would just say is that, I didn’t even know the word entrepreneurship or entrepreneurial probably 15 years ago. In fact, I probably couldn’t have spelled it at least on a consistent basis and I’m still glad that there’s spell check when I try to spell it.

Vincent Aguirre:               I had that conversation with someone yesterday struggling to spell it.

Ken Eitel :                           The word entrepreneurial, it’s entrepreneur, it’s entrepreneurism, there’s [00:35:30] just all sorts of ways and things that people now attach that word to. I heard somebody the other day call somebody an entrepreneurial historian. Well, I don’t quite know what that is, but I think it has to do with creativity and the willingness to take a risk, which is kind of the core.

But when I started doing these things, because I knew from age 18 I wanted to own a business. Now that’s 50 plus years ago. But I knew that was something [00:36:00] I wanted to do. And the word entrepreneurship and entrepreneur wasn’t even around then. So there’s a word attached to that now, but I think for me we as human beings need to be creative and I think there’s far too many organizations today that don’t allow people to be entrepreneurial inside them and I think we need to get back to that.

Vincent Aguirre:               I agree. [00:36:30] Thanks again, really appreciate it.

Ken Eitel :                           You’re welcome.