On this week’s show, Karl interviews Lisa Fullerton, President & CEO of A Novel Idea, LLC. They discuss how Lisa has managed to run a successful business for almost 20 years and how she balances her work life and her personal life.
Karl Eggerss: Hey, good morning everybody. Welcome to the podcast. This is Creating Richer Lives. My name is Karl Eggerss. Just a reminder, you can reach us at (210) 526-0057. You can also go to creatingricherlives.com. Of course we post a bunch of stuff on there each and every week. And just a reminder, the podcast comes out on Saturdays. Typically I’ll do a TV interview, airs on Sunday mornings in the San Antonio area on CBS. Our CIO Justin Paul has a blog that he puts out on Monday mornings. And so because we’re putting all that information for you that’s totally free, we thought it’d be easy to just send that to you once per week.
And so if you’re getting that, we call it Covenant U, because it is educational, and it comes on Monday afternoons. If you’re not getting it, go to the website and you can sign up for it and really any of the articles, you can click on them and you’ll see an opportunity there to put in your name and email address and then you’ll get that. And that way it’s a culmination of everything that’s distributed one time per week. But if you want to listen to the podcast as it comes out, you can subscribe to iTunes or Spotify, any podcasting service, and you can get the podcast right when it comes out.
Now before we get into the markets, we do have a guest that’s going to be in studio in just a few minutes. Her name is Lisa Fullerton and she’s the President and CEO of A Novel Idea, LLC, which owns and operates a bunch of Auntie Anne’s and Cinnabon franchises. And I brought her in because Creating Richer Lives is really to help you guys not just in terms of investing or financial planning, but some of you are thinking about starting a business. She’s been doing this 20 years. How has she been successful? Would she franchise over again? Those are things I’m going to ask her and so again, I know some of you are thinking about starting your own business and what are the pros and cons?
So I invited her in and Covenant has had a relationship with her because Covenant and Lisa met through some various philanthropic things we have done together over the years. And so I said, “Why don’t you come on in the studio and tell me about your success of running all these restaurants,” if you will, “And come on in, let’s talk about it and tell others how you got successful, what the pros and cons were of the challenges of being a business owner, especially 20 years ago? And is it easier or harder now?” So we’re going to have her come in the studio in just a few minutes, but before we do let’s do a little bit of housekeeping in terms of the market.
You know the last couple of weeks I’ve been saying that I thought we would be due for some type of pause and we’ve seen a little bit of a pause as the markets are a little stretched in the short term. Of course, we still have impeachment stuff going on. We are still getting trade headlines back and forth. You hear something positive, something negative, markets react, not too much, but we seem to be at kind of a pause. Really the biggest news this week was Charles Schwab buying TD Ameritrade. That was big because in our world, the registered investment advisory world, there are really three places: it’s Charles Schwab, it’s Fidelity and it’s TD Ameritrade. And now you have Schwab buying TD Ameritrade.
And somebody asked me earlier in the week, “If Charles Schwab doesn’t charge commissions anymore how do they even make money?” And I talked about this a few weeks ago, but I thought it was worth repeating. Keep in mind, many of these brokerage houses like a Fidelity, a Charles Schwab, it’s not just a place to trade. We’ve seen those transaction fees come down. They used to be $30, $40, $50 years ago and they’ve come all the way down to zero now. So now that they’re zero, how are they making money? Well, it’s almost a loss leader because what happens is very little of their revenue actually comes from you doing a trade at the discount brokerage.
This is Charles Schwab in particular. They are also a bank. So when you have money in the money market they will lend it out. So they are a bank, so they are making money obviously on lending. So they’re borrowing from you and lending to somebody else at a higher rate, so they make money there. But they also, if you think of Charles Schwab in particular as a warehouse or a distribution center, anytime you go on Schwab and you go to buy a mutual fund, that mutual fund company is paying Charles Schwab to be on their platform.
So Charles Schwab could go on TV and say, “Look, we have this huge library of mutual funds that you can choose from to purchase without any kind of fees.” And that’s because the fund company is actually paying Charles Schwab to be on their platform there. It’s a pay to play system. So Schwab makes a lot of money in that regard, and they also make a lot of money on banking and other services. So they do a lot of other things besides just the transaction oriented type of business of you buying and selling stocks.
But that going to zero is great for consumers, it’s great for us as advisors and that’s the way the industry’s going. But this consolidation going on, Ameritrade got bought by TD years ago, that’s TD Ameritrade, and you’ve had all this consolidation and now you saw Schwab going after TD Ameritrade. That was a big, big move this week, and probably the biggest thing because again the market’s not really doing a lot right now and so we’re looking at other news going on, which that was one that kind of maybe took some people by surprise on Thursday morning, but again, kind of this back and forth.
So things that have been working pulled back a little bit, some things that were working paused and again, let’s see where it goes. Now people are asking me, “Well, what happens with trade?” Well, how much of that is priced in already? If we get a trade deal, is it priced into the market? And the answer is maybe the majority of it is. So let’s continue to watch that and let’s continue to watch obviously economic releases. All right. As I mentioned earlier, we do have a guest. Lisa Fullerton is President and CEO of A Novel Idea. Welcome to the podcast.
Lisa Fullerton: Thank you, Karl.
Karl Eggerss: This is your first time ever doing a podcast, isn’t it?
Lisa Fullerton: It is.
Karl Eggerss: Not to make you nervous, we have some listeners that have been listeners for over 10 years.
Lisa Fullerton: Thanks for not making me nervous.
Karl Eggerss: But as I tell everybody, it’s just a conversation. And the reason I asked Lisa to come in as I just mentioned in the intro, is she is a small business owner that made a leap of faith and has turned it into a success. And I want to talk to her about the challenges because if any of you are listening that have either gone through this or considering starting your own business, this could be very, very helpful for you. So Lisa, again, welcome. And so just for those just joining us, tell me at the very beginning how you got started because you started this in 2000, but you did have a prior life to that.
Lisa Fullerton: I did. I had a safe, secure prior life than this. So my background is accounting and finance. I received my accounting degree from-
Karl Eggerss: Music to our ears-
Lisa Fullerton: Texas State.
Karl Eggerss: You see that? Texas State, I’m a Bobcat, yes.
Lisa Fullerton: Yes. Well, actually I’m so old it was Southwest Texas State.
Karl Eggerss: It was on mine too.
Lisa Fullerton: Okay, I’m feeling better already.
Karl Eggerss: Yes, we’re both old.
Lisa Fullerton: So I got my accounting degree and had worked for other people as their Controller, worked my way up to CFO and then I was a Managing Director for an international behavioral science firm in Austin, Texas. And that firm was purchased by the owner who lived in Vancouver, Canada. So when he originally bought the company he would come to Austin monthly, and then it was quarterly. And then he began to say, “Hey Lisa, would you come to our board meetings in Vancouver?” And so probably after about a year or two of this I realized he’s okay with me handling his business, so maybe this is something I could do for myself.
So I began to look into concepts to see what I thought I could do on my own. And it was then that I realized … I have a next door neighbor at the same time I worked for him who was a waitress and her husband was a mechanic, and they left Austin, Round Rock Texas area and wound up starting Auntie Anne’s pretzels in Lancaster, Pennsylvania. So I began to look into the company as we had left, parted ways and were no longer neighbors, and I began to look at another business model.
I didn’t have a single day I’d ever touched a cash register, had no retail experience, but I wound up having a conversation with Anne’s two daughters who had started and expanded in the Austin, Texas area. And they said, “Hey, if you’re interested in seeing if this is something you want to do, we need a Controller. We need a CFO, we really need some strength in that area.” So I quit my job, I gave a three months notice. My boss thought that I was going to be a lifer and-
Karl Eggerss: So the idea was to go work for Auntie Anne’s, not necessarily have your own franchise?
Lisa Fullerton: That was my safe leap, right?
Karl Eggerss: Yes.
Lisa Fullerton: So this was my, I’m not throwing in the towel and throwing my hands up-
Karl Eggerss: Was it even a consideration where … I mean, were you thinking that could be?
Lisa Fullerton: Yes, that was the ultimate.
Karl Eggerss: Got you.
Lisa Fullerton: But what they said was, “If you want us to show you the ropes, we grew up in the business. We were 12 and 16 when mom, Anne Beiler started the business. We really need help in the finance area. We’ll teach you the operational side.” So it was a great first step.
Karl Eggerss: Sure.
Lisa Fullerton: So as I worked for the girls for about a year, they went from 5 stores to 10 stores in one year and realized they bit off more than they could chew. So they started selling off the businesses asking me if I wanted to buy them, and I said no. Being a finance person I actually wanted to pay cost, not market, and I wanted to build that market.
Karl Eggerss: Right.
Lisa Fullerton: So I went in for an interview with Auntie Anne’s corporate and they said, “Hey, if you don’t want any Austin stores you’re approved awaiting a location.”
Karl Eggerss: So they didn’t have any franchises at that time?
Lisa Fullerton: Nothing available because the girls, Anne’s daughters had 10 stores in the Austin market and-
Karl Eggerss: That was it?
Lisa Fullerton: I was living in Round Rock Austin at that time. So less than six months later I got a call that there was a mall available or a location available in North Star Mall in San Antonio. I said, “But that means I have to move.” They said, “Well, you go down and look at it, then you come back and tell us you don’t want to move, but don’t tell us that sight unseen.” So we took a trip to San Antonio. We’re impressed with the mall.
And I said, “Okay, but I have to get financing, I have to sell my home, have to relocate my kids.” And I’d say it was the first leap of real faith that we had, that the doors just kept opening and things kept happening. So before I knew it I was in pretty deep and this was really going to happen. So, threw in both feet and the first three to six months I think I wondered what I had done. I had traded my suits sitting in a gorgeous office in the Austin Arboretum, and now I was working in a mall in San Antonio, Texas.
Karl Eggerss: Wow.
Lisa Fullerton: I left all things
Lisa Fullerton: -Hind familiar family, friends. That was a little overwhelming. That time was a little scary.
Karl Eggerss: I bet. We’ll come back to that in a minute. How long before the second, the third, the fourth?
Lisa Fullerton: The second location was two years later and the third location was three years later. And then I had some tough life circumstances, took a breather from expanding and then I added two at a time and then I added a co-brand at the airport. So as of date we have opened nine Auntie Anne’s Pretzels or Cinnabons in the San Antonio and San Marcus area.
Karl Eggerss: Wow. Now how have you seen … I’m just curious, the trends obviously in fake beef and all these diets and keto and gluten-free and all of this stuff … Have you seen trends change that would affect the business one way or the other?
Lisa Fullerton: I do-
Karl Eggerss: Because when I walk by them they’re very crowded still.
Lisa Fullerton: It’s very interesting. I’ve s-
Karl Eggerss: I always ask for extra gluten, by the way, when I go out to eat. And the waiters and waitresses look at me. And so,
Lisa Fullerton: But the interesting thing is there has been a very big change in the way that people eat today.
Karl Eggerss: Yeah.
Lisa Fullerton: But what I’m finding is there’s also a greater dichotomy between people who want to eat farm to market, and then when they fall off the deep end and binge, they really want to fall off the deep end and binge and have chocolate chip ice cream with cookies and, you know.
Karl Eggerss: Sure.
Lisa Fullerton: It’s very, very sweet and decadent. So I find that people feel we are still a great snack, but we have customers who’ve been loyal the almost 20 years we’ve been open. So this December will be our 20th Christmas season to be serving the residents of Santa Antonio.
Karl Eggerss: Wow. Congrats. That’s awesome. So you’re coming up on 20 years. You think back, obviously things have changed in terms of red tape and being a small business owner. I was a small business owner. We both started businesses. What were some of the biggest challenges? Like people listening right now are … There’s some listening that are considering either a franchise or they’re considering just starting their own business. Could you still do it today? What’s changed? What are some of the biggest challenges?
Lisa Fullerton: Wow, that’s a good question.
Karl Eggerss: Especially again, 20 years, long time, not in the big history. But female-led to, I mean were there any hurdles in that arena or not?
Lisa Fullerton: That might be another whole podcast. Actually, let me … I do have a couple of answers to your questions I think most people would find very interesting about what is different today than what was different in 2000.
Karl Eggerss: Yeah.
Lisa Fullerton: So when I started in 2000, because the food business is very capital intensive-
Karl Eggerss: Right.
Lisa Fullerton: People would probably not think that to start a quick serve restaurant, which is the industry or the segment of the industry that we are in, it’s a 250 to 300 thousand dollar investment. Now that is leasehold improvements, equipment, franchise fees, start up on your food costs-
Karl Eggerss: I wouldn’t imagine … I mean, if you’re not franchised is a dramatically different? There’s still a lot of those costs.
Lisa Fullerton: With the exception of the franchise.
Karl Eggerss: Yeah.
Lisa Fullerton: I would say it’s probably all very much the same cost.
Karl Eggerss: But you may spend that on advertising if you’re not using the franchise, right?
Lisa Fullerton: Correct. Yeah. And doing a lot of the work yourself.
Karl Eggerss: Sure.
Lisa Fullerton: But I think one of the toughest things is, is when you’re going to get a loan it’s very hard to get a loan in our industry because banks can attach any of those assets. It’s pretty hard to say the bank wants to attach the loan to HVAC.
Karl Eggerss: Right.
Lisa Fullerton: Right? So because we are so heavy on the leasehold improvement, it is a very difficult arena to get started in.
Karl Eggerss: Yeah and as far as … I know it wasn’t as if you thought, I’m going to go into the food business. Your path kind of led you there, but knowing accounting, knowing finance, that’s a challenge in business. What is it, 90% or so of first year restaurants and food vendors close down and it’s a low margin business, right?
Lisa Fullerton: Very low margin.
Karl Eggerss: You need a lot of volume.
Lisa Fullerton: You point out two really, really important things that I think are important to let people know. In the food industry, 80% of businesses fail within the first five years. I think one of those reasons are the margins really are so low. If you have a loan, typically you’re doing well if you have a five to seven percent net income at the end of the year. But what people, I think, underestimate is the taxes-
Karl Eggerss: Right.
Lisa Fullerton: -That you have to pay. So the federal taxes are significant. The franchise taxes are significant. The property taxes are significant. So I always tell people, if you’re thinking about getting into business for at least the first five years, you need to make less than you’ve ever made. So pay yourself reasonably but not excessively. And you’re going to work harder than you’ve ever worked. But I have to say when I started that first one, I never envisioned that we would have nine stores open in this area. And I think because we grew slowly, smartly, and we’re focused on paying off debt and trying to reserve cash that’s really why we never … We’ve been successful and have never really been in a lot of trouble.
Karl Eggerss: I would imagine too, there’s economies of scale with nine versus one.
Lisa Fullerton: Absolutely. So I found that when we got to three stores, we could hire a regional manager. So the beauty is when I worked the … I actually worked my first store. I worked the first three years doing … Working at home, doing all the accounting, finance, food orders, hiring, terminations, scheduling. And then I would work the stores, the closing shift from three to close.
Karl Eggerss: Wow.
Lisa Fullerton: So I would be up, take kids to school, work from about eight to three, grab the kids from school, take them in, switch, let my husband bring them home, and then I would work the closing shift. So it was 70-hour weeks for the first year.
Karl Eggerss: And let’s remind listeners you made that choice.
Lisa Fullerton: Yes.
Karl Eggerss: Which is amazing.
Lisa Fullerton: And that’s what people said, is “what were you thinking?” And I think … Honestly, I think we all probably underestimate the time and energy, the physical resources, the emotional resources, maybe even the disappointments, how much of the work you really need to do yourself. But I do believe that was very helpful and setting a foundation that my staff, who saw me do everything I was asking them to do, realized I had skin in the game.
Karl Eggerss: Yeah.
Lisa Fullerton: I was not afraid to do anything I was asking others to do.
Karl Eggerss: Yeah because that can be a high turnover business, which is a whole ‘nother element of taking time to interview new employees that you know may be working there for the summer or what have you. That’s very challenging. And when you start multiply that times five, seven, nine locations … I mean I’ve got to ask you … You have five kids, three grandchildren. How do you … And by the way, you probably didn’t want to mention this, but I will, very philanthropic, involved in a lot of other things. So it’s not as if you just went in there and hunker down. You were still balancing that and family life and philanthropic, which we always talk about the shows about lifestyle, legacy, philanthropy and you were doing all of those. There’s only 40 hours on a week.
Lisa Fullerton: Well, I didn’t sleep many of those in the first, I’d say, three to five years. But I think what was helpful and foundational in those early years was working with the people that I realized had core values that were in alignment with my own. So when I realized those people that felt the same way I did, treated customers the same way I did, had the same work ethic I did, you really invested in those people. And fortunately that paid off because the director of operations for our organization, he was the only 15 year-old we ever hired and he is now a 34 year old director of operations for the company.
Karl Eggerss: That’s awesome.
Lisa Fullerton: So we have worked together for 19 going on 20 years. So I think when you put your efforts into people that do understand what the core value of the business was … And mind you, in the early years, I knew what those core values were. I didn’t know that’s what they were called. We didn’t talk about them.
Karl Eggerss: Right.
Lisa Fullerton: It was in my head, my heart. I didn’t share that. So it wasn’t until years later, my husband and I worked with a business coach to help us say, “you got to get what’s in your head and heart onto paper and you need to get it out in front of your staff-”
Karl Eggerss: Sure.
Lisa Fullerton: “And you need to not only have a as a plaque up on the wall, but you need to live in accordance with those core values. You need to use them as part of training, their evaluations, their corrections.”
Karl Eggerss: Well, just like parents they’re going to look … The children are going to look at the parents and the parents can have placards on the wall, they can say things, but it’s what do they do? What are their actions?
Lisa Fullerton: That’s exactly right. That’s exactly right.
Karl Eggerss: By the way, I’m looking around the studio and I don’t see any samples.
Lisa Fullerton: Oh!
Karl Eggerss: I’m just saying.
Lisa Fullerton: Okay, I’ll leave you some free pretzel and Cinnabon cards when I leave here.
Karl Eggerss: Okay, that’ll work. Deal.
Lisa Fullerton: You can get them at your own leisure.
Karl Eggerss: Deal. So, those people listening right now that are considering … And just to spend a couple of minutes talking about franchise or not … Considering even just a small business, whether it’s food related or not, what are the pros and cons, you looking back in the rear view mirror, going to franchising versus doing it on your own?
Lisa Fullerton: I really have a lot of respect for people who started a business out on their own and it has their name on the front of the building, but I think the benefit of franchising-
Karl Eggerss: Or people like me that used to have their name on the front of the building.
Lisa Fullerton: Right. But I understand how sometimes you have to come together with like-minded people-
Karl Eggerss: Yeah.
Lisa Fullerton: -Because there really is economies of scale. And the reason that Lisa’s pretzels might not be successful is that means that Lisa would have to worry about the recipes, she would have to worry about menu innovation, she would have to worry about technology and that is absolutely rapidly changing.
Karl Eggerss: It’s huge.
Lisa Fullerton: What register? I’d have to worry about the food suppliers and the vendors. I’d have to worry about-
Karl Eggerss: And you had an interesting perspective because you get to see the inside first as opposed to going online saying, “Best franchises of 2019. Oh, I’ve heard X is great, I’ll go give it a try and invest my money,” only to find out it’s not that great. You actually got to see it first and then work from the inside out, which is unique.
Lisa Fullerton: And if I could tell you kind of an interesting story about why Annie Anne’s probably resonates with me is it’s personal and I think most of us, when we do what we love and it doesn’t feel like work, then it really isn’t work. So when I was newly married and living in my first home, my next door neighbor was the founder, Anne Beiler and her husband. And so, she was a very, very conservative Amish. They’re an Amish couple. Had a very, very strong faith and she was literally a waitress and her husband was a mechanic. So she used to cut and perm my hair and serve me lemonade in her house back in the early to mid 80s and that’s the … Ironically, that’s the lemonade recipe we serve in our stores today.
Karl Eggerss: Wow.
Lisa Fullerton: So talk about come full circle.
Karl Eggerss: Yeah.
Lisa Fullerton: But I think a lot of it is, I knew who she was as a person and I trusted her and I knew what she stood for. And our core values are in alignment. So even today she and her husband are personal friends of ours and have been for 35 years.
Karl Eggerss: So that’s worked for you to go the franchise route. For folks who can’t go from the inside out, I guess the due diligence they have to do … Obviously you have to have a passion for whatever you’re going into, but there’s a lot of due diligence on finding out who that … And some of those may not be able to get that type of experience you did.
Lisa Fullerton: Correct. Well, so I would say a couple of things. It’s very important that if you are getting into business where you require foot traffic, stand in front of the location you’re considering and do traffic counts.
Karl Eggerss: Yes.
Lisa Fullerton: A good capture rate is five to seven percent, so if-
Karl Eggerss: I’ve heard the airport’s good.
Lisa Fullerton: Yeah, I would take 10 more of those if I could.
Karl Eggerss: Yes. Yes.
Lisa Fullerton: It’s a very … because traffic is abundant.
Karl Eggerss: Captive audience.
Lisa Fullerton: That’s exactly.
Karl Eggerss: Yeah.
Lisa Fullerton: So that’s one, so that you could at least have an estimate of how many customers you could expect to capture. And then if you’ve got an estimate of what each transaction averages, then you could do some estimation about what your revenues could be. Also, be sure that you understand what the expense structure is and those things that are hidden or surprise. So I would ask … I would do my research about other brands and what their expense ratio is so you have a good idea. But the third thing I would tell people is, be realistic about what you’re good at and hire somebody else to do those things. I mean, I’m fortunate that accounting is my love. That’s my background, my expertise. So I love that piece. But marketing, I like it, I enjoy it, but that gets my leftovers. So we actually have a marketing director in our company who handles customer comments. She does field trips. She takes care of catering. So she’s really good at the customer interface piece.
Karl Eggerss: The knowing your numbers, I meet a lot of clients who, it’s usually in real estate where they have a real estate investment and I kind of analyze the numbers, and they’re not making as much as they think they are. And I’m going to talk in future podcasts about that because when you really run a lot of the numbers, it’s not as easy as people think, especially if you’re just watching HGTV and think, “I can go do this and flip a house,” or, “I can rent it out, do whatever I want.” Real estate’s got this love around it, and people don’t always do their homework. But it seems like when you’re considering a franchise or not, you’ve got to know your numbers. And there’s certain probably little formulas that every restaurant, every even small business owner really needs to kind of stick to for it to be successful. And you have to know your numbers, I would think.
Lisa Fullerton: Well, I think something that you brought up in that question is that I made sure that we were open a full entire year so that I was around for every season. Right? So I may have been successful for six months and thought, “Man, I’m ready to open multiple locations.” But I think until you really get good at your foundation, be careful building too fast. Because it is, the biggest challenge we face today is getting enough people to work. It’s very challenging out there. There’s a saturation of food competition. I challenge you to go look at any strip center and I’ll bet 50% to 60% of what’s in there is food. People now get stuff catered in. So I would tell people, make sure that you know foundationally what you’re doing in a year or two. Don’t overcapitalize. Don’t think that just because you see the money coming in, it doesn’t mean it’s there to be spent. So try to stock away as much as you can and pay down your debt as fast as you can. Those are just some things that worked for us.
Karl Eggerss: So, Lisa Fullerton, 20 years now versus 20 years ago, what things, when you look at from the 30,000-foot view, not that you would change necessarily, but as a business owner today, what are you doing different than you were back then?
Lisa Fullerton: I’m probably not-
Karl Eggerss: And primarily about balance, right? I mean-
Lisa Fullerton: Yeah. I think I’m not taking things so personal. I think because I am so deeply invested in my business, my staff, my customers, I have learned not to take myself so serious. And I’ve also learned a little bit about balance by learning, I have to say no. So I get a lot of invitations to come speak. I love those. I sit on several boards. And there’s so many good organizations out there that I would love to contribute to, but I have to be realistic about my time, because if it’s all work and no play, I’m going to have a pretty sour attitude.
Karl Eggerss: So you have to learn to say no, not only to work sometimes, but you also have to say no unfortunately to philanthropic things or committees or organizations that you may really want to do. You just can’t over commit because then everybody gets a little bit of Lisa as of opposed to-
Lisa Fullerton: Well, and I have a saying that if I can’t commit all the way, then I don’t like to commit at all. So I’m not somebody who feels good about saying that I’ll be engaged in something and then never show up because I don’t think that speaks very highly of me or my level of commitment. And because I believe so strongly and I’m so committed to what it is I invest my time, energy and talents into, I want to make sure I do a good job and represent those people well.
Karl Eggerss: Last question, would you do it again? Would you leave again and start your own, knowing everything you went through in terms of the hours, sacrifices, having a franchise, multiple locations, all the red tape, all of that? Would you do it again?
Lisa Fullerton: As crazy as it sounds, yes, I would. As hard as some of those times have been emotionally for my family. I mean, there were some years that were really difficult. All those hours worked, just some personal difficulties that transpired during those years, but I think that’s probably made me the person I am today, which is why I can take myself a little less serious. I can say no because I realized, had I known then it would be this good, I probably would have relaxed a little bit more. But I don’t know. Maybe that chaotic, frenetic busyness was what got me to where I am.
Karl Eggerss: Yeah, because you think, “If I don’t work the 80 hours this week, then it may not be successful.” And now you’re at a point where, if I don’t, yes, I may leave some money on the table, but it’s not as important as a trip, a grandchild’s baseball game, whatever it might be there.
Lisa Fullerton: I’m absolutely there. And another point about leaving money on the table is, I think I’m to the point in my career, or I’m certainly on the downside because I have been in this business for 20 years, and it’s the average life cycle of somebody in our industry is about eight to eight and a half years. So we’re over double the life cycle, and we take a lot of pride in that. But I believe the other important thing is to make sure that you take care of the people who take care of you. So if that means I pay them more to get a little more freedom, that’s also a principle I’ve applied.
Karl Eggerss: I’ve seen it at organizations that are startups where they think they start struggling and they start cutting employees or cutting benefits as opposed to themselves first, and those are the workers. Those are the ones moving the ball forward, and it’s sometimes done backwards.
Lisa Fullerton: Well, and the hard thing is, you never know, can I do a little price increase to cover this ordinance, this compliance issue, the cost of the compliance, or do I cut expenses? Because no customer ever walks to your counter and says, “You’ve officially charged too much, and I’m not coming back.” It’s more organic than that. You’re just an attrition of customers. So it’s a really difficult … there is no magic elixir. There is no guaranteed formula.
Karl Eggerss: When I asked you would you do it again, the last, last question would be, could you do it again today? In other words, if somebody is listening out there, saying, “I want to go that path. I want to start whatever it is today,” are things so different now than they were 20 years ago, or is it just the same? Obviously there’s differences, but can people still start a business with as much confidence now as they could have 20 years ago?
Lisa Fullerton: I think the cost of compliance is greater, the cost of labor is greater, but I also think as long as you have technology that can help you replace some of the things that were more laborious when I started, I think that’s an area that we’re going to have to realize some efficiencies. I know even I’m on a leadership advisory council for one of our two brands, Auntie Anne’s Pretzels, and we constantly look at, do we need to simplify the procedure back behind the store? Do we need to change the type of oven we have where it would be more automated? Because it’s all hand-baked, hand-rolled, it is handmade. So you don’t want to give up any of the core of who you are and what you’ve become known for by automation. But we have to keep an eye on the past and what made us successful but continue to keep our eye on the future to say what’s going to keep us relevant today.
Karl Eggerss: Yeah. That’s no different than a home builder. They all tell me now, just to even start the home, connecting the local public utilities to the home, all of that, I can’t remember the term they used, from the curb to the house, that cost is so high now that not only is the land cost high but it’s squeezing them. So what do they have to do? Same thing. They have to rely on more technology, more efficiencies and again, economy’s a scale, which is really what you did. So, Lisa Fullerton, a novel idea. Again, a great story. Appreciate you coming in, and you’re always welcome back, with one caveat.
Lisa Fullerton: Samples. Thanks for having me, Karl.
Karl Eggerss: Thank you. A couple of things Lisa mentioned to me after the interview, off air, that I wanted to share was the fact that she really couldn’t do some of these philanthropic things she wanted to at the beginning because, obviously, new business. And so it was once she was being very frugal at the beginning of the business and was able to save some money, was she able to start giving that back to the community, getting back into the community. And so that was really big for her.
And the second thing she mentioned that I wanted to share is, once she got her staff in place and was able to trust some of those folks, really, they took over as leadership and it freed her up to start doing more philanthropic things and really continue to help balance her life in terms of her kids and things like that. So training that staff and trusting them and having their leadership skills was huge for her. And so just wanted to throw that in as well. All right, everybody, thanks for joining me. I hope you enjoyed that interview. Have a wonderful weekend. And just a reminder, creatingricherlives.com is our website, and our telephone number is (210) 526-0057. Have a great weekend everybody.
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