Richard Parker: Lance I love the questions that you ask. They're articulate and they make a whole lot of sense. And I'm sure anybody listening is going to really enjoy them. Hopefully the answers are going to be very helpful to them, but I just want to ask you something. If I could digress for a second. I get a lot of interview requests and with my schedule I unfortunately can't accommodate everyone. And I typically reject the ones where the interviewer is really simply looking for a story rather than someone who really understands business and entrepreneurship.
When you and I first spoke that's what really struck me about you and I was quite intrigued and welcomed the idea of having a more meaningful conversation with you. So I know what I'm going to ask you is a little odd but could you tell me a little bit about your background? Because I'm certain it's a great story and I think it would be wonderful for you to share that of course with me, and anybody who's listening to this. I'm really, really interested to hear what it is.
Lance Hood: Okay, well my family story starts back when my grandpa was in his 50s. He was just tired of being broke. I mean he was trying all kinds of things but they just couldn't make it. And so what he did was he started grinding grain. And you know what? There is no money in that. He was always broke. I mean they were so broke at times that they would soak the corn to make edible like oatmeal and eat that because that's all they had. I mean they were that broke. It was like water and feed, and they were eating the chickenfeed.
He said, he was tired of that so they started feeding chickenfeed to chickens and had a hatchery. They started raising chicks and when people stopped buying their own chicks they decided, they'd raise up turkeys. So they raised up turkeys, cleaned them and sold the meat.
When the market kind of fell out that and there wasn't any money to be made there they're like, "Man we have all these eggs. What can we do to make more money?"
A noodle press was for sale so they went and bought that noodle press and they started using the eggs from the chickens to make noodles in their basement. That's where it all started and they just expanded from there. When my mom and my uncles got home from school every night they'd work. They'd have to make a pallet of product before they'd start their homework and then get to bed.
So it was quite the family business. And that business even though if you look it took four or five different ideas before they actually started to make it, and that business eventually took off. But it didn't take off overnight. I mean they really worked it hard and for the first ten years, but after that it started taking off on it's own and getting a little life of it's own. But the last ten years that's when huge things happened. Big growth. It's like that snowball, like that big curve, and the business just really took off.
My grampa was 55 he started it. So, 30 years later when he was 85 they ended up selling it. And they sold it for many millions of dollars and it did very, very well. You know what if my grampa and grandma weren't as determined as they where I might have never been inspired to do more with my life. So I encourage everyone out there to remember. Your life is the example for your family for generations to come. So make the most out of it.
So when you think of this I see how it make sense because it made sense for my family because they were tired of running the business and they wanted to sell it even though it was a good business and it was a profitable business, nobody really wanted to run it. At 85 my grandpa was getting old. He had already retired and my uncles wanted to move on and do some other things in real estate. So that just led to selling the business.
It benefited not only the sellers but the buyers in this situation. And now that I look back at that instead of starting a business it probably would have been smarter if I would have just bought one huh?
I think that's why franchises appear to do so well. When the company bought us they bought a proven business that already had a proven system with customers that was already making money. And I think that's why franchises do so well. And you know, it seems like somebody else has already figured it out. It definitely sounds like the way to go.
Richard Parker: That's a great story. I mean there's a couple of things that you mentioned there that are just so phenomenal. I mean the only thing that I disagree with is related to franchises, but we could talk about that in a second because I think the thing that you mentioned related to franchises they're not necessarily as successful that most people think, but the key thing is anything with a proven business model which is why you buy existing businesses, you're going to have a much greater opportunity for success. That transcends to every industry.
I mean it's why free agents in sports make a whole lot more money than the highly touted rookie. They've proven that they could do it. And that's like an existing business. If you have a proven entity, you're upside remains very high and your downside is reduced dramatically. But if you go back to some of the things you said I found it intriguing. You had asked me earlier related to some of the things or challenges that people may raise related to not going into their own business. "I'm too old. I don't have enough money," et cetera, et cetera. Then you take a look at your grandfather, he was 50 years old when he went into business ...
Lance Hood: And he was broke.
Richard Parker: That's right - he was broke but it motivated him. And yet the thing that became crucial to that whole success story is that he had just one thing that took off. Right?
Lance Hood: Right.
