Comprehensive Study Guide: Entrepreneurship, Retail Operations, and Historic Venue Management

Speaker Biography and Early Life

Dustin Rhodes was born in St. Francis, Cheyenne County, Kansas, located in the extreme northwest corner of the state. From birth until four years of age, his grandmother owned and operated the Daylight Donut Shop in St. Francis. Following his early years in St. Francis, his family relocated to Leota, Kansas, where his mother secured a position as a music teacher—a career she maintained for $40$ years. Rhodes resided in Leota through the second grade before moving to Ransom, Kansas, which he considers his hometown.

Ransom, Kansas, had a population of approximately $300$ residents. The town is notable for producing Nolan Cromwell, a multi-sport athlete who served as an option quarterback for the University of Kansas, a $300\text{-meter}$ hurdler, and an All-Pro safety in the National Football League. Rhodes attended school in Ransom from third grade through high school graduation, graduating in a class of six students as the salutatorian. His high school valedictorian and close friend scored a $35$ on the ACT, went on to become a pharmacist at HaysMed, and served as best man in Rhodes's wedding, with Rhodes reciprocating the role.

Higher Education and Early Employment

After graduating high school, Rhodes enrolled at Fort Hays State University (FHSU) and worked at A1 Plank and Scaffolding in the machine shop. His primary duties involved operating a drill press through large steel rods used as holding mechanisms for scaffolding, working five-hour shifts from $5:00\text{ PM}$ to $10:00\text{ PM}$ nightly. After demonstrating proficiency with measuring tapes, welding, and mechanical tasks, he was promoted within the shop.

During one summer, Rhodes worked for his uncle in St. Francis on a game bird farming operation. The farm raised approximately $85,000$ chukar annually, representing one of the largest game bird operations globally. Rhodes identified this physical labor as the most grueling employment of his early life.

Rhodes transferred after one semester at FHSU to Brown Mackey College in Salina, Kansas, on a athletic scholarship to play junior college (JUCO) baseball. While balancing his athletic schedule in Salina, he operated a lawn mowing business with teammates. Their daily routine consisted of meeting at McDonald's at $6:00\text{ AM}$, mowing lawns until $12:00\text{ PM}$, attending baseball practice from $1:00\text{ PM}$ to $4:00\text{ PM}$—during which Rhodes used his pickup truck to haul water for the squad—and attending evening classes from $7:00\text{ PM}$ to $9:00\text{ PM}$.

Upon completing his associate degree, Rhodes returned to Fort Hays State University to pursue a degree in marketing. During this period, he resided at the Catholic Campus Center with Father Fred to discern a calling to the priesthood before transitioning into the retail jewelry industry.

Launch and Development of Diamond R Jewelry

Rhodes entered the jewelry business after his father alerted him to a job opening at a local store in Hays. Despite his background as a farm youth, he accepted the position and consistently surpassed the store owner's monthly sales figures. Upon completing his degree, the owner appointed Rhodes to open and manage a new store location in Manhattan, Kansas. Rhodes relocated in November and managed the store for six months before being terminated following disagreements regarding marketing direction and operational adjustments. Returning from his first paid vacation in six years, he was presented with a letter of resignation.

Rhodes subsequently secured employment at a high-end jewelry establishment in Kansas City, where he worked for seven months. This role allowed him to cultivate key relationships with wholesale vendors willing to extend lines of credit to young entrepreneurs. Returning to Hays, Rhodes co-founded Diamond R Jewelry with his wife, Lainey. Seed capital for the enterprise totaled $\\text{12,500}$, raised through $\\text{2,500}$ contributions from five individual investors, including four friends and his father.

To overcome inventory capital constraints, Diamond R Jewelry utilized alloy and silver ring prototyping. Instead of investing $\\text{2,000}$ per unit in live inventory to retail at $\\text{3,500}$, the store acquired display prototypes at $\\text{30}$ per unit, presenting a full display catalog comparable to legacy stores established for $30\text{ to }85$ years. The physical store currently maintains $1,776$ live engagement ring settings, capping inventory at this symbolic threshold while cycling popular styles back to suppliers.

Operating under the moniker "The Diamond Broker of Kansas," the business minimizes loose diamond holding costs by sourcing gems on a memo basis. Utilizing dealer networks with access to over $\\text{300 billion}$ in global loose diamond inventory, stones are brought in for customer inspection on approval. Selected diamonds are purchased and invoiced, while unselected stones are returned without carrying costs. In one instance, a customer spent three months attempting to locate a specialized kite-shaped diamond (a marquise-style cut with straight edges) through chain retailer Riddles; Rhodes located multiple matching stones within $15$ minutes using wholesale databases.

Diamond R Jewelry transitioned through three physical locations in Hays:

1. A $300\text{-square-foot}$ office in the Hadley Center, where Rhodes slept on a cot inside a rented closet to avoid commuting costs to Ransom.

2. A secondary facility in the Blue Light Body Arts Building, occupied for two years.

3. A permanent $6,600\text{-square-foot}$ superstore located at 8th and Main Street, featuring an upper level, a retail floor, and a full basement office.

The retail inventory includes established fine jewelry brands:

• A. Jaffe: High-end bridal line granted territorial exclusivity due to distance from competing regional dealers.

• Gabriel and Company: The largest engagement ring manufacturer in North America, providing custom design services and specialty lines such as the Buji Collection of stackable bracelets.

• Gnome Carver: A French-Canadian designer specializing in minimalist bridal aesthetics.

Civic Engagement and Historic Property Renovations

Rhodes served as an Ellis County Commissioner during the COVID-19 pandemic and held the position of Chair of the Ellis County Republican Party. During his commission tenure, he was selected for Leadership Kansas, a statewide civic program accepting $40$ participants annually from hundreds of applicants. The program included site visits to Spirit AeroSystems in Wichita, the Tyson Meatpacking Plant, Kansas City shipping docks, Lawrence, Goodland, and Colby.

During a Leadership Kansas event held at The Strand in Hays—a building then gutted except for its original $1917$ pressed tin ceilings and requiring temporary outdoor sanitation—Rhodes identified the structure's commercial potential. Following a county tax lien sale where the Bank of Hays acquired the property, Rhodes and his wife purchased the building for approximately $\\text{120,000}$.

They executed a $\\text{600,000}$ historic restoration of The Strand. The venue features a $50\text{-foot}$ width, $25\text{-foot}$ ceilings, chandeliers, a full bar, and a seated capacity of $250$ guests. The facility operates as an event space and creates marketing synergies with Diamond R Jewelry; brides who purchase engagement rings at Diamond R and host their weddings at The Strand receive custom tumblers featuring branding from both entities. During ceiling repairs, missing tin sections were replaced by contacting the original Missouri manufacturing firm that installed the ceiling in $1917$, completing repairs for $\\text{800}$ versus an initial estimate of $\\text{5,000}\text{ to }\\text{10,000}$. The Strand maintains an event booking conversion rate exceeding $95\%$.

Following the acquisition of The Strand, Rhodes purchased The Fox Theater from a friend who operated it as an underperforming restaurant. Financing for the down payment was generated by selling $\\text{100,000}$ of state historic tax credits (from an accrued $\\text{130,000}$ credit balance earned during The Strand's renovation).

The Fox Theater originally opened in $1950$ as a government project and celebrated its $75\text{th}$ anniversary. Modern replacement costs for the venue are estimated between $\\text{8 million}$ and $\\text{10 million}$. Rhodes rebranded the facility from its prior names (Uptown Fox and Fox Pavilion) back to its original title, operating it as a multi-purpose live entertainment venue.

Live Entertainment Operations and Venue Economics

The Fox Theater and The Strand operate under separate liquor licenses, with beverage sales serving as the primary driver of profitability. Concert ticket revenue is predominantly allocated to cover fixed artist guarantees and production fees. For example, hosting the Eli Young Band required a $\\text{22,000}$ upfront contract guarantee before back-end splits applied. Upon clearing baseline guarantees and production expenses, back-end ticket splits max out at an $80/20$ ratio ($80\%$ to the artist, $20\%$ retained by the venue on sold-out shows).

Venue demographics vary by ticket tier: older audiences fill the seated balcony, whereas college students populate the lower general admission area. At full capacity, the venue brings $780$ attendees into downtown Hays on event nights, generating spillover economic activity for surrounding businesses such as GELA's, which monitors venue ticket counts to adjust staffing and inventory.

Artist selection relies on quantitative metrics:

• Headlining acts generally require approximately $1,000,000$ monthly Spotify listeners.

• Social media metrics are audited for conversion rates, including comment activity, shares, and direct audience engagement.

• Emerging artists are contracted using Mutually Agreeable Date (MAD) offers to lock in terms prior to career growth.

Past performers at the venue include:

• 75th Anniversary Concert Series: Eli Young Band, Alien Ant Farm, and Blackhawk.

• Musical Acts: Paramount ($1980\text{s}$ rock cover band), Baker Blankenship ($22\text{-year-old}$ singer-songwriter), Wyatt Flores (who played the venue twice prior to arena tours), and Bowling for Soup.

• Comedy Acts: National touring comedians including Gabriel Rutledge.

Operational staffing across the enterprises includes:

• Diamond R Jewelry: Managed directly by Rhodes with four part-time college student employees.

• The Strand and Fox Theater: Co-managed by Rhodes and his wife Lainey. Operations employ $15\text{ to }20$ personnel, including venue cleaners (paid $\\text{20}\text{ per hour}$), bartenders, security personnel, and contracted sound/lighting engineers.

Questions & Discussion

During the presentation, audience members and online students submitted questions regarding business operations, venue history, industry trends, and competitive strategy.

In response to a inquiry regarding the upcoming $75\text{th}$ anniversary of the Fox Theater, it was confirmed that the anniversary occurred in the current year. To celebrate, the venue organized a four-part concert series featuring the Eli Young Band—the first artist to sell out the Fox Theater under current ownership—alongside Alien Ant Farm and Blackhawk. In addition to music, the venue hosts recurring stand-up comedy events, including an upcoming performance by comedian Gabriel Rutledge in December.

When asked about the management structure across his three enterprises, Rhodes explained that he directly manages Diamond R Jewelry, while he and his wife, Lainey, manage The Strand and The Fox Theater as business partners. Previous attempts to hire third-party venue managers were unsuccessful due to alignment gaps in operational standards. Lainey oversees detailed financial auditing, scheduling, and cleaning operations ($\\text{20}\text{ per hour}$ positions), while Rhodes focuses on talent acquisition and creative direction, such as booking bands like Bowling for Soup.

Regarding methods for staying current with industry trends, Rhodes noted that in the jewelry market, suppliers and major brands drive consumer demand. For example, Gabriel and Company introduced trend-setting items like the Buji Collection of stackable bracelets. Diamond R Jewelry focuses stock inventory on classic foundational pieces—such as diamond hoop earrings, studs, and standard bands—while offering lab-grown diamonds as a cost-effective alternative to natural diamonds (e.g., executing a setting for $\\text{5,000}$ in lab-grown diamonds that would cost $\\text{50,000}$ in high-grade natural diamonds). For event space trends at The Strand, the venue leverages its original $1917$ architecture, maintaining a booking conversion rate over $95\%$ for tours.

Addressing competition from online jewelry retailers, Rhodes outlined a localized marketing strategy. Rather than competing solely on margin, marketing focuses on community integration and local sponsorship, such as main-sponsoring Fort Hays State University sports updates hosted by Gerard Wellbrock and sponsoring youth athletic teams like the Glitter Bomb soccer team. To match online customizers, Diamond R provides Computer-Aided Design (CAD) renderings within $24$ hours from customer screenshots. Furthermore, the store maintains a two-day turnaround on local jewelry repairs.

Regarding the choice to establish his enterprise in Hays rather than a larger metropolitan area, Rhodes cited his rural upbringing in Ransom and a preference for mid-sized community structures. He highlighted access to local Catholic education for his children, proximity to golf facilities at Smoky Hill, and a supportive local business network (such as Grow Hays) as primary reasons for maintaining his primary business operations in Ellis County.

In response to an online question regarding initial workload during small business formation, Rhodes emphasized that early-stage entrepreneurship requires round-the-clock mental involvement to ensure supply chain reliability and customer satisfaction. Over time, as a business matures into a sustainable operational phase, founders can transition focus toward long-term personal health, spiritual routine (such as attending daily Mass), and delegating tasks to staff.

When asked what operational choices he would alter if restarting his business trajectory, Rhodes stated he would engage a professional accounting firm earlier in the lifecycle of Diamond R Jewelry to manage tax structures and financial books. He also pondered whether securing a Small Business Administration (SBA) loan through the Bank of Hays to open a traditional retail storefront immediately—rather than spending an initial year in a $300\text{-square-foot}$ office—would have accelerated market penetration and brand authority.