HATTIE: Hi, I'm Hattie Bryant and this is Small Business School. We're the program that teaches about starting and growing a business. Today we're going to visit a business that has been serving its customers since 1958.
(Voiceover) Fishermen in Louisiana shop at Fluker Farms. The Salk Institute, Harvard and the Smithsonian are also regular customers. What is it that they all want? Bugs. Crickets. Worms. Lizards.
You'll find Fluker Farms just over the Mississippi River from Baton Rouge, Louisiana. People in Louisiana love their fishing, and that means they need bait. Today the farm will ship 2 1/2 million crickets a week and hundreds of thousands of mealworms and super worms. The customers, bait shops and pet stores, want these little creatures live upon arrival.
And it's going to get there just, like, in two days?
Unidentified Employee #1: Yes, ma'am.
(Voiceover) Bugs. Crickets. Worms. Lizards.
HATTIE: And they'll be fine in there, they'll be happy. They won't die.
Employee #1: Well, no, they shouldn't die.
HATTIE: No matter what happens. Temperature-wise, do they get put on...
Employee #1: If they do, we guarantee 'em live.
HATTIE: (Voiceover) Richard Fluker got this whole thing going.
HATTIE: Tell me about some of the big obstacles to the growth, some of the lessons that someone who's thinking about starting a business today needs to learn.
RICHARD FLUKER (Founder, Fluker Farms): I bought it in '56 while I was in with a partner. I got laid off at Ethyl Corporation and I had to make a decision whether I was gonna go for public work again or was I going full time in the cricket business. And so I started in 1958 full time in the cricket business, and it was about 1961 before we got on the other side of the books. And my wife, David's mother, supported us while we were trying to get it going. Our accounting system was based on three cigar boxes, in and out and whatever's left over.
HATTIE: Why did you start a cricket business?
RICHARD: Well, back in--I've always been an avid fisherman, but a lot of times you'd go to the bait shop and they didn't have the bait on hand because they didn't have a source. And so in my mind that if someone was a supplier, could always supply the bait shops, well it would be a lucrative business, which it has turned into.
And then in the meantime, in 1958 Lawrence Curtis came by the Cricket Farm which was on the old 190--you did not have the interstate--and he was from the Ft. Worth Zoo, and he said he had been looking for a source of supply of live crickets for the different animals that ate a live source of food.
So in the meantime, well, he started ordering from us and being a science teacher, well, I decided that universities and others would be interested in crickets. And then it went from the zoos, where we had Dr. Michael Robertson, the director of the Smithsonian Institute. We sold them crickets over the years. Even when he was in the research program down in the Canal Zone ... we sold him quite a long time ... better known as "The Spider Man."
HATTIE: You're not trying to make that quick buck.
DAVID: We want to do repeat sales. It doesn't do me any good to sell to you once.
HATTIE: Other than doing bulk mail when you first came, when you look back, what can you see that you did back then that you're glad you did?
DAVID: Well, we took our current customer base and tried to sell products that they could use, so, you know, we were selling them crickets already, so we said, `Hey, let's do another feeder insect.' So we started doing mealworms. From there, we started with our second feeder insect, and if they buy crickets, well, chances are they also buy mealworms.
HATTIE: Were you right?
DAVID: We were right. From there we also added reptiles, iguanas. I was talking to my brother and I said, `Howard,' you know, `let's do something else.' Well, he said, `Why don't we do iguanas, because they're a bread-and-butter item within the pet industry.' And my brother was right.
HATTIE: (Voiceover) Today, Howard, David's brother, runs the iguana farm in El Salvador.
HOWARD FLUKER (Richard's Son): Our iguanas, we breed ourselves.
HATTIE: Why would someone want an iguana as a pet?
Unidentified Employee #2: They make really good pets. You can actually litter-train them as you would a cat.
HATTIE: If I picked him up like this, he might not be as friendly to me.
Employee #2: Oh, he would be just as friendly to you. You might have to be a little bit careful unless you're used to handling large iguanas.
HATTIE: (Voiceover) Howard's background and interest in technology led him to design the smart building where he raises reptiles in a controlled environment.
HOWARD: For instance, in the morning at 6:00, all of these cubicles are totally dark. For about two hours, or actually about an hour and a half, the white lights that are in these buildings will start at twilight, and every second they'll get a little brighter to pretty much simulate the sunrise, because it's not natural for, you know, an animal to be in the wild and flip a switch and have the sun come on. We've actually gone outside and measured the amount of lighting that's needed to equal an entire day.
HATTIE: (Voiceover) Just as you might guess, running a business together can stress the sibling relationship.
HOWARD: Everyone that has a family business I'm sure experiences a certain type of family problems, and everyone that owns businesses with family, you've all got to figure out some way to make it work. For instance, the cricket part and the reptile part are both moving forward in a very good direction. It's just we both disagree on certain aspects of it, but, you know, because we're living in two different countries, neither one of us is involved in the day-to-day activities of the other, so it makes our relationship very, very good.
It's really too bad that not every company that has, you know, a brother-sister or whatever type of relationship can do this. I mean, we do it because it's inherent in being in the reptile business.
HATTIE: And you needed to do it to grow the reptile business. So it's working, working, working. So but when it comes to little things sometimes you disagree a lot, but when it comes to the big idea, the big ideas that you're growing, you're building...
HOWARD: Right. We've never really disagreed on the big ideas. We just disagreed on how to implement them.
HATTIE: So what can we learn from that? What can someone who's running a family business right now learn from that? We all need to learn -- don't sweat the small stuff.
HOWARD: The day-to-day activities, that are small, don't really matter. Don't let that create a problem between you and your brothers or sisters. You should concentrate more on the larger things that really matter in the company, because if you concentrate on every little thing, then you'll never get along, even on the big things, because every time you disagree with little things, you know, there's a little part of you that carries it into the next problem.
HATTIE: Right. Right, right.
(Voiceover) While most of the ideas of the second generation have improved the business, they've made mistakes, too.
What have you tried that hasn't worked?
DAVID: We tried raising mice. And we had the orders for mice, we just couldn't fill the orders because we had difficulty raising the mice. Either this is the wrong climate, either we just couldn't make it click, but that was a considerable investment that did not work out.
HATTIE: Do you mind telling us how much time and how much money you put into that project?
DAVID: I'd say -- well, just in expenses, just like in capital expenditures, we spent about $50,000 for items that we could not use when that venture failed. Now, I did build a building, and fortunately we built it to use as something else if it didn't work out. But it was about $50,000 in wasted items. Labor and time, I couldn't tell you.
HATTIE: You don't want to know.
DAVID: Yeah, I really don't want to know. But, yeah, it's probably approaching about $100,000, I'd say, on that bad call.
HATTIE: But isn't that something that you could teach others, and that is, you have to try a lot of things. Some things are going to work and some things aren't.
DAVID: Yeah, I guess at some point you've got to know when to say "when." We basically attempted to make that work for about two years.
HATTIE: Tell me about some of the growth points, the critical decisions you think you made that caused all this growth to happen.
DAVID FLUKER (Richard's Son): Basically, believe it or not, one of the best decisions that we've ever made was using bulk mail, you know, to tap into the pet industry, with a cricket brochure. Well, it was basically like a little postcard that we had mailed out, and we got a phenomenal response off of that. It wasn't very expensive, and for the cost it was probably the most bang for the buck. So, a year or two later, we decided to go into direct phone sales. So we really started out with bulk mailing.
HATTIE: So, you took that same list.
DAVID: We took that same list and got phone numbers on the next time we ordered the list. Then we started calling all of the pet shops.
HATTIE: Does it cost a little more to get the phone number on the list?
DAVID: Yeah, it costs a little extra. But the first time we did it, we didn't worry about it because we were trying the lost cost. We didnt' think to call; and then when we got to thinking, 'Hey, let's give them a call.'
HATTIE: So, now when you look back, do you think you have a lot of loyal wonderful customers from that original mailing?
DAVID: Yeah. We've tried to maintain a loyal customer base. We still get referrals. Let's say that I get a few customers from the mailing. Those few customers normally turn into more customers because they tell other customers. So we still go back to the referral deal. In other words, if you take care of somebody, our basic philosophy is we don't want to sell to you once, we want to sell to you more than once. So, if they have a problem, we'll take care of that problem. We'll even lose money on shipments just so we can keep you as our customer, even if it's your first shipment.
HATTIE: So that caring, that nurturing of the customer is a deep-seated philosophy of yours.
HATTIE: You're not trying to make a quick buck.
DAVID: We want to do repeat sales. It doesnt' do me any good to sell to you once.