David Bower vividly remembers walking circles around a parking lot outside the Wendy’s next to the Martinsville Speedway in Ridgeway, Va., during the summer of 2004. He was on the way home from a multiple-family annual vacation to the Outer Banks. His family was eating inside. He wasn’t eating. He was miserable.
Homestead Creamery, then three years into selling milk and ice cream to help sustain his family dairy farm and several others, was failing. Miserably. To the tune of $40,000-plus in losses every single month. Unless he did something drastic, he was taking each of those farmers, their farms, his landscaping business and his family down with it. He hadn’t even received a milk check in 11 months. Every drop was going into the creamery.
And just before that vacation, a banker told him that “a real man will never ever take somebody else down with him.”
Now he was trying to figure out a way to avoid that. He simply could not wait for the good Lord to send a rowboat. He had to throw the rope himself.
Desperate measures
In desperation, Bower dialed a man he knew of but didn’t really know, a fellow who had a solid financial reputation, who lived in the same corner of Virginia. Dave Kohl answered the phone.
“I just walked circles around that parking lot and told him our story,” Bower recalled. Kohl’s response? “If I would listen, he would do whatever he could to help me.”
Kohl, professor emeritus at Virginia Tech with a reputation for teaching financial management and business skills, had been asked for this kind of help before. And, most recently, another creamery business he tried to help had failed — mostly because it kept doing what it had been doing.
That’s why listening was the prevailing condition for Kohl’s deal. On that day in that fast food restaurant parking lot, Bower committed to listening to Kohl. And he committed his partners to doing the same.
From there, picture a video montage of meetings in airport lounges, homes, offices and at the farm. Fast-paced and focused. Anytime Kohl, known as The Road Warrior, had a stopover and space on the calendar for Homestead Creamery, Bower made time to meet him. The creamery’s partners sometimes joined those meetings and always stepped up to the suggested changes because, well, they were determined. And, as co-owner Donnie Montgomery said, because the numbers made sense.
Kohl, Bower said, “can translate everything you’re doing into simple math equations so you can do what you need to do to change your life, to turn your life around.”
Kohl’s formula registered with the dairymen-turned-creamery owners. With everything on the line — their farms and related businesses and this comparatively new venture — they went to work. Business plans. Goals. Hard talks with bankers. Revisions to their product lines. The mechanics are detailed in our story Adversity forges success: How Homestead Creamery beat the odds.
Then COVID-19 hit, disrupting life as everybody knew it and again threatening the business.
“Let’s put it this way: We were against a wall,” Kohl said, recalling an afternoon in their simple boardroom during the pandemic. The call was for each to put more money into the business. “We raised $700,000 in seven minutes.
“There was a certain trust among us. You could see it in the eye. We had faced adversity before,” Kohl said.
“I remember saying: ‘I see more opportunity before us than ever before,’” Montgomery added.
The creamery founders like to laugh and say “the proof is in the banana pudding,” as in one of their ice cream flavors. But the reality is the mettle was in the men.
“We went through one of the most educational processes that’s on the Earth,” Bower said. “We went through the Harvard of hard knocks.”
What you need to do
Going by the Kohl syllabus, here are a few of the business truisms that played out at Homestead Creamery:
Put people in the right place. Homestead Creamery went from losing money faster than milk spills to making $15 million in sales. Bower was serving as president, a role he took on out of necessity. But he wasn’t at home. The business was successful and he was miserable. Again. So, he left the leadership.
“Business partnerships aren’t like marriages where you’re committed for life,” Bower said. “You have to be true to yourself and your vision.”
Bring in outside advisers. Since the founders enlisted Kohl, a variety of leaders have served on Homestead Creamery’s board — including a local Dairy Queen executive, an Extension agent and a landscaper. The current president, Walt Frazier, spent his early career in the automotive industry.
Avoid arrogance, bureaucracy and complacency. On a sunny afternoon this summer, Montgomery was the fellow dishing out ice cream from the traveling food truck for workers at United Felt, a nearby factory. It’s a treat the management offers monthly.
This is one of the ways Montgomery minds Kohl’s warning about avoiding the ABCs — arrogance, bureaucracy and complacency. On those afternoons, he again revels in the joy their product brings to people, chatting with each employee who comes out with a step only slightly slower than when their childhood selves ran toward the ice cream truck as its music pealed through the neighborhood.
Perhaps adversity really does make success sweeter. Today it tastes like banana pudding ice cream.