The Opening of this Show.

In the Studio

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."

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Our motto is `Serving Satisfied Customers.'

HATTIE: `Serving Satisfied Customers.'

RICHARD: That's right.

HATTIE: When did you come up with that motto?

RICHARD: When we first started.

HATTIE: So that was way ahead of the big customer service craze that's going on right now.

RICHARD: That's right. That's right. In other words, a satisfied customer always gives you future business.

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: Well, now, we did not get this big until I decided to turn it over to young blood, which was my three children, David, Howard and Diane.

HATTIE: Right. And your father said,`OK, kids, I'm out of here. You do it.'

DIANE (Richard's Daughter): Right. He just kind of like, life hit him in the face and he said that he was taking a permanent retirement. And he said, `Take over.'

RICHARD: They are responsible for the growth, not me, because I've retired out of it and they own it lock, stock and barrel.

HATTIE: (Voiceover) David was 19 when his mother died and his father asked him to take charge of the business.

When you and your brother and sister took over the business, your father was doing about a half a million in sales. And he said he had one little hut for general administration, and now you've got all these people, over $5 million (in annual sales) ...

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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.

DAVID: Exactly.

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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.

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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.

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In the Studio

HATTIE: Imagine building an empire out of crickets. When David Fluker took over the leadership for Fluker Farms, it was primarily a regional bait shop supplier. Fluker was the company his father had built, and the customers were bait shops because David's father was a fisherman. And, his customers were also academic research institutions because his father was a science teacher.

David looked at the database with fresh eyes. While his dad went with his own personal experience in searching for customers, David did statistical analysis. He discovered a few pet shops in his database and he thought, 'Well, if I have one pet shop, why can't I get them all?' So, he bought a list, and there happened to be about 4,000 pet shops in the country at that time. He wrote some simple copy, put it on a postcard, and sent the postcard to those 4,000 pet shop owners. He began from that single contact to get new customers. He continued the mailing for two years, and then he thought, 'Well, if the postcard is working this well alone, what if I add telemarketing?'

He only had one problem. He didn't have enough money to hire a bunch of salespeople. So he thought, 'What if I get some college kids to work part time?' They're articulate and they're energetic, and maybe that'll work. He's just across the Mississippi River from Baton Rouge where LSU is located.

He ran an ad in the school paper, and the rest is history. David discovered a missed opportunity in his database. We should all be so smart.

HATTIE: (Voiceover) At Small Business School.org there is self-help study for people who want to start a business and for those who want to grow the business they have. To learn more about this episode choose the overview. You can read every word you're hearing today when you choose the transcript. And go deeper with the case study. There's streaming video and access to interactive study guides throughout the site.

WACO (Employee): Hey, Joe, this is Waco down at Fluker's.

HATTIE: (Voiceover) Not only has hiring part-time college students to do his telemarketing been a fantastic idea, he has worked on at least three marketing campaigns with a group of marketing students on the campus. He goes to them with a problem, and they come up with a solution, all part of their academic training.

WACO: You all sell something for me. All right, buddy. Bye.

DAVID: The good thing about using a college kid is you don't have to worry about, you know, you're going through the hiring process, and then you lay them off. Well, then you're stuck, you know, with all that unemployment and things like that. Plus I needed some really well-spoken kids and usually you'll find that in college situations. So, you know, I got a couple of guys, I got some extra phone lines and they started calling. And next thing you know, it started working out really well.

WACO: Steve right here, he's doing international sales. That's what I was doing earlier. It's a lot of work but now we're getting all our products out into Spain, Japan.

HATTIE: Well now, Steve. When it comes to shipping internationally, are we talking the live products, or are we talking just the die-offs?

STEVE: We do dry products and live.

HATTIE: So are the live products more difficult to get through the barriers?

STEVE: Yeah, you have to have special permits to bring any live animals, export and import, so it's a lot of stuff. You have to make sure it doesn't get caught up in customs, because...

HATTIE: (Voiceover) These young people are not only good at sales, they vitalize the company. They are computer savvy, smart, enthusiastic, and invigorate the place.

Generation Xers may be getting a bad rap in the media, but David is finding they are making a great contribution to Fluker Farms.

(Voiceover) David is very proud he has taken the business systems from his father's old cigar boxes to 16 PCs, all networked, and software that makes shipping and billing a breeze. Technology, here on the farm.

So now you just scanned it?

Unidentified Employee #3: You just scan it, and it's $4.00 for postage.

HATTIE: So what does the bar code tell me?

Employee #3: It tells us the weight.

HATTIE: This bar code has that address in it.

Employee #3. Right.

HATTIE: OK, so combined with the weight, knowing the address, the computer calculates the amount of postage. So now you'll print the postage label. Got it. Because of that, it'll be able to print your packing slip.

Employee #3: Yes.

HATTIE: Great.

Unidentified Employee #4: We put our e-mail address on all our catalogs and brochures that we send out now, and we also advertise on our Net site, and we have, you know, a place on it where you can contact us.

HATTIE: Bruce Camber, our executive producer, answers a question we are asked constantly: how do you select the companies you study on Small Business School?

BRUCE: When Hattie and I started this enterprise back in 1994, we thought small business owners were being ignored by the media and that as a group, we deserve some television time of our own. We have met so many extraordinary people and brought their stories to TV. Each year we have become ever more convinced that small business owners are actually the heroes of our culture. The job creators, innovators, and miracle makers, and that our entire culture could learn so much more from them.

We now call people who start businesses and create jobs the new American heroes, today's pioneers.

People ask all the time, 'How can I get my story told on your show?'

Our process of selection is on our web site. On each page, just click on the word 'Selection.' Since 1996, I've been wrestling with ways to open this selection process up. We now have a way. We are working with each local station to do short profiles of their local small business heroes. Again, at the top of each page on the web site, click on 'profiles' and learn more.

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ELISE (Employee): Actually, I catch them just like that, shake them off the..., pour the measurer, just like that.

HATTIE: OK, so you're measuring now.

ELISE: Yes, ma'am, this 1,000 four week.

HATTIE: This is 1,000 crickets right here?

ELISE: Yes, ma'am.

HATTIE: You know that.

ELISE: I know that.

HATTIE: How do you know?

ELISE: I know. I work 24 years, that's why I know.

HATTIE: You've done this for 24 years?

ELISE: Yes, ma'am.

HATTIE: OK. So for 24 years, this has been 1,000 crickets.

ELISE: Yes, ma'am. This 500, four week, this 1,000, four week, this 1,500, four week...

DAVID: (Voiceover) Unfortunately this is a hot, dirty job, so basically we try to pay a little better than the average hot, dirty job. And that's how we've managed to keep a lot of our workers. And, you know, it's not easy to find people. You know, we do have a turnover rate because of the job. It's just not a real clean office-type job.

HATTIE: (Voiceover) Do you have a nice package of benefits?

DAVID: Yes. We have a decent pay scale, we offer year-end bonuses, we pay half of the health insurance of them and their families, which is not a law, that's just something that we do. We have paid vacation time, we have paid sick time, we have paid holidays, which is quite unusual in this type of industry. Most of the other farms that I know don't quite have that type of array of benefits. You know, there's usually no holidays, paid vacations.

HATTIE: ... it's an improvement.

ELISE: Old boss, little bit deaf, and new boss, better. Old boss, little bit know much, new boss, him, he change lot.

HATTIE: The new boss.

ELISE: He did.

DAVID: In the business realm, really all that I've learned probably has been from my dad.

RICHARD: I always included the Lord in part of my business. We're Baptists, and we believe in tithing.

HATTIE: The philosophy of giving, it brings back goodness to you.

RICHARD: Goodness to me and it comes back in tenfold. And so my kids...

HATTIE: So don't be selfish, is what you're saying.

RICHARD: Don't be selfish. And my kids--my father brought me up thataway, and my kids were brought up thataway, and they're always helping someone.

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HATTIE: (Voiceover) David and Howard see a bright future. Howard has plans to raise a bright blue iguana, which he believes will be a best-seller, and the two look forward to growing the iguana food business, and then, their newest invention.

HATTIE: We're gonna be able to buy Fluker chocolate-covered crickets in the Sheraton Hotels, any day now.

Unidentified Employee #5: Yep.

DAVID: There's kind of a little story to this. We started doing this at the trade shows. We were doing trade shows, and we wanted people to come to our booth, so we did a chocolate-covered cricket.

HATTIE: So at the trade show, you had all these other products.

DAVID: We had the crickets at the trade show at the time when we started our...

HATTIE: The live crickets.

DAVID: The live crickets. And we wanted to get people in our booth, so we did a chocolate-covered cricket. And that worked out fairly well, you know. We had quite a few people come up for that. Well, then we got to thinking, we said, `Hey, why don't we do a button with it, and that way people can walk around the show with our name on it, and that'll tell them to come to our booth.'

HATTIE: What a good idea!

DAVID: So we did the `I Ate A Bug Club'...

HATTIE: And it worked.

DAVID: Oh, man, it was a smash. We ran out like the first day. We had people lined up to get the buttons. And once we saw the response that the button and the chocolate drew together, we said, `This is a product.' And it's taken quite a bit to bring this product to the market, you know, by the time we got all the nutritional analysis and everything like that. You know, we've had a lot of press; Rolling Stone, Wall Street Journal. I've done 20-30 radio station interviews, really all based on the chocolate covered cricket because they find that fascinating. And I've just picked up a Japanese order to do the button in Japanese.

RICHARD: The cricket has a 63 percent protein value.

HATTIE: So it's low fat, high protein. And crunchy.

DAVID: We supply the crickets...

HATTIE: Do you send these to a candy maker?

DAVID: Yes, there's a candy maker down in New Orleans who makes the candy for us. My father, whenever he first did it, he was frying the crickets, and my wife, who is a registered dietitian, made us start baking the crickets because it was healthier. So now we bake the crickets.

HATTIE: We have a low fat, low fat chocolate covered cricket.

DAVID: That's it.

HATTIE: Reduced fat, because the chocolate has fat, but the cricket is pretty healthy.

DAVID: The cricket's real healthy. As a matter of fact, the only thing not healthy for you in the whole thing's probably the chocolate.

HATTIE: The best part.

DAVID: The crickets are...

HATTIE: No, the crickets are the best part.

DAVID: Why don't you try one?

HATTIE: OK. All right. I'm sure you've had them.

DAVID: I've had plenty.

HATTIE: I'm trying to think of a reason not to have to do this.

Have you eaten one?

Employee #5: Yes, I have. I ate one today, as a matter of fact. They had some kids come out, and...

HATTIE: Do you eat them regularly?

Employee #5: Yes.

HATTIE: What do they taste like?

Employee #5: A Nestle Crunch.

HATTIE: So the thing to do is just realize that this is protein, this is healthy and--Oh! I'm a member of the--it's good! It really is, it's not--it's really good--`I Ate a Bug Club.'

(Voiceover) Congratulations to Diane, David and Howard. They are doing what most haven't done. They're taking their dad's creation into the next century.

(Voiceover) What advice would you give someone who's starting a business today?

DAVID: What I would tell them is that remember that your day does not end at five when the clock stops, because your brain's always gonna be thinking about your business. It's not like you can go home and just totally forget about your job. So remember, there are advantages to working for somebody and there's advantages, you know, to owning your own business. The disadvantage is that your brain never stops thinking about the business.

HATTIE: To other people, owning a business might just look like rosy colored...

DAVID: That it's the greatest thing. You have nothing to do all day. You just sit back in a big chair, smoking a cigar, you know, talking to your buddies. But it doesn't work like that. You know, when problems develop, you're the one that has to solve that problem. You know, when the customer's gone through all the channels, and they want to talk to the top guy, you're the guy that they talk to.

HATTIE: How do you motivate yourself?

DAVID: How do I motivate myself? Well, I mean, I guess I just feel kind of responsible because there's a lot of people working here. I know that they're counting on their jobs. My family's counting on me. That really adds a lot of motivation to it. I mean, I know that if all things don't do well, then it's really--no one else is to blame except for myself, because I'm the one calling the shots. You know, if it's a big decision, my family and I, we all get together and we discuss it, but I know that my suggestions and what I want to say carry a lot of weight. And, you know, they'll typically go with what I want to do, you know, provided it's not totally ludicrous. But at the same time, you know, that's a lot of motivation in itself, knowing that you're the guy that's got the ball, and if you drop the ball, well, then you've totally hurt the lives of your father, your sister, your brother, my wife, and all their family, you know? I mean, it's a lot. So I just kind of feel responsible for it.

In the Studio

HATTIE: Want to grow your business? Do what David did: look at your database to discover missed opportunities. We'll see you next time.