He will probably feel uncomfortable when he reads this, but I wish every American could have heard Tom Smude’s talk at Business Insights Wednesday in Little Falls.
Over the years, I’ve heard a few entrepreneurs describe the process they’ve gone through to build a business. Readers who think it is easy to be successful in business ought to try owning one sometime. Smude, who said he was nervous to be speaking in public, offered enough detail that one could appreciate the challenges needed to get his sunflower oil business off the ground.
The Pierz farmer comes across as a humble man. He thanked a lot of people, government agencies and businesses for their help along the way, including saying some very kind words about the Record.
He and his wife Jenni have been farming since 1989. They both worked away from the farm, but it was still a struggle. Tom had studied sales and marketing in college, so they started looking for some way they could leverage the farm’s assets so that they could better their income and their lives.
Finally, Tom went to the bank for financing, but was told he needed to develop a business plan first. He then met with Julie Anderholm of the Small Business Development Center at Central Lakes College in Brainerd. With Julie’s expertise, they produced a plan, but the Smudes still needed help with financing.
So Tom went to see Carol Anderson at Community Development of Morrison County in the fall of 2009. Working closely with her, they put together a finance package that included four lending institutions and three private investors, so they could construct a manufacturing facility. The first bottle of sunflower oil came off the line on Jan. 1, 2010.
The former ad manager at the Record, Kim Hansen, who passed away last year, arranged for Pam Brisk, one of the Record’s talented graphic artists, to design a label for the bottles.
Hartmann’s Hardware Hank in Pierz became the first business to stock Smude’s Sunflower Oil. It was followed by Thielen’s Meat Market, also in Pierz.
Then, the Record did a news story about the new business. As a result, Smude said, four or five more stores signed on.
Tom and Jenni next recruited family members and friends to go to farmers’ markets and trade shows to sell the oil. At the first market in Onamia, they made $67. Then they heard about a market in Isle, where many lake residents from the Twin Cities go, so the Smudes sold the oil there and made about $400. Next, they had a similar result at a farmers’ market in Holdingford.
In March, they won a highly competitive $298,000 grant from the U.S. Department of Agriculture to help with marketing.
Tom wanted to find a way to get onto the shelves at Coborn’s, but wasn’t having much luck. Then, he met a woman who worked at Coborn’s at a Women in Business Expo in St. Cloud, who sampled his product. While she couldn’t help him herself, she knew who could. One call led to another, and he got an appointment with representatives of Super Valu in the Twin Cities.
They met in a small cubicle at Super Valu headquarters, with Tom on one side of a table and two buyers on the other side. Tom made his pitch about the benefits of sunflower oil, and then they just sat there for what seemed an eternity. Finally, one of the Super Valu representatives said, “I think we can sell this on the West Coast.”
Tom said, “But I just want to get into Coborn’s.”
Then the other said, “I think we could sell it on the East Coast, too.”
That was last winter, and the Smudes didn’t ship their first pallets to Super Valu until July. Now they are in all Lund’s and Byerly’s stores, and next week all Coborn’s stores will be featuring Smude’s Sunflower Oil in their advertising flyer.
Cash flow remains a challenge for the rapidly growing business, but the health benefits, taste and other properties (think lavender and peppermint body lotion) of sunflower oil are strong selling points.
I’m certain more obstacles remain ahead. There’s no road map when you own your own business. But the Smudes’ budding success story is one that more Americans need to hear. It can be done, and we need more entrepreneurs with a dream and the drive to make it happen. It’s through them that we’ll get the economy back on track.
Tom West is the general manager of the Record. He may be reached at (320) 632-2345 or e-mail [email protected].