BOYD — Zane Holdbrook is tackling his newest livestock venture with the energy of a cowboy and the sensibility of an accountant.
Holdbrook, 20, is raising Dorper sheep, a South African breed known for its hardiness, fast growth and fertility. While growing in popularity in the United States, the sheep is dominated marketwise by the beef industry, so Holdbrook knew he’d need a different angle to make the business work.
“The only way to do it is to subsidize. It enables me to grow and make money,” Holdbrook, a cattle-ranch kid from Roberts, said while feeding the sheep in a field a few miles north of his hometown.
Holdbrook is also studying accounting at Rocky Mountain College, and he developed a plan to support his sheep business in a new course for budding entrepreneurs. To meet course requirements, Holdbrook and other students had to write business plans and present them to a Yellowstone Bank loan committee.
Bank officials called the program a success, and singled out Holdbrook’s efforts. He’s the only student who has received funding (about $6,000), and he learned valuable skills about small-business lending — a crucial driver of Montana’s economy.
“Every bank in Montana is actively looking for new loans. The challenge they’re having is finding bankable, credit-worthy clients,” said Wayne Gardella, Montana director of the U.S. Small Business Administration.
Learning the finance game
For small-business owners, obtaining a loan can mean the difference between expanding and creating new jobs or barely surviving. It hasn’t been easy: The recession choked off access to that capital in recent years and left many businesses flailing.
Now experts say commercial lending is picking up, and with it,
the opportunity for entrepreneurs like Holdbrook to grow their businesses.
“All job creation in Montana is done by small business. You always have to have a pipeline of new small business coming, because some leave, some fail,” Gardella said.
Gardella noted that the agency’s federally subsidized loans have fallen each year in Montana since 2010, an indicator that commercial banks are filling the gap and releasing more capital into the economy.
Bank officials say they are lending more, but insist they still need to see solid business plans before granting loans. That’s why they were excited to help the new, advanced entrepreneurial class at Rocky this spring.
The partnership was also good for instructor Scott Severance, who said he wanted to bring real-world business experience into the classroom.
“It seems a lot of times in college we go through all the processes and learn how to set things up. But we never really learn how to execute them,” he said.
Ten students signed up, nearly all of whom had developed business ideas in other Severance classes. They needed to come to class with $300, which they could then use to market and develop their idea, he said.
If they lost money, they gained a lesson, but most were able to use the money to grow the business, Severance said.
“Let’s go out and figure out how to make or lose money,” he told the class.
To add more realism, Severance turned to fellow Red Lodge native Ty Elkin, president of Yellowstone Bank’s Billings homestead branch. Each student was assigned to meet with a loan officer and develop a pitch to get financing for their business.
Holdbrook compared the experience to the reality television show “Shark Tank,” where entrepreneurs take tough questions from potential investors about their business. He said he was nervous walking into the room of bankers, but quickly grew comfortable talking about the ag business and his love for it.
To Elkin, it was a good chance to show the students what they need to demonstrate to qualify for a business loan.
“Let’s make sure that they earn it by doing something outside of their comfort zone,” Elkin said.
It seemed to work. All but one student received a loan offer, though Holdbrook is the only one so far to accept the money. Severance said he’s excited to see how far the other projects will go.
“The whole goal of the class was just to better prepare people to start their own business,” he said.
Goat’s milk and orphaned calves
Holdbrook bought 36 Dorper sheep, which he keeps on grassy pastureland behind his late grandmother’s house a few miles east of Cooney Dam. Joining the sheep are 29 Nubian goats, which Holdbrook bought about four years ago and are a key cog to his business plan.
The goats produce milk to feed 14 orphaned calves, which Holdbrook bought with the loan money. He said he plans to raise and sell the calves for beef, then use the proceeds to prop up the Dorper sheep business and pay back the loan plus 6 percent interest, about $6,360.
“I love the (agricultural) lifestyle, but I’m trying to find a way to make it profitable,” he said.
That means nudging his way into small but growing markets of people seeking alternatives to beef and pork. It’s a risk, Holdbrook acknowledges, but one he thinks can work.
“I look at all the old ag guys, and they were always playing defense. I was like, ‘No, let’s play offense, so you’ll make some money,’ ” he said.
Severance, his Rocky instructor, said Holdbrook is in a good position to take a chance.
“By the time he’s 25, 30 years old, he could very well have his own ranch, because he’s continued to use his money wisely,” Severance said.