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NWA Founders is a voice for Founders, Owners, and Builders driving growth in Northwest Arkansas, and is hosted by Cameron Clark and Nick Beyer.
'NWA Founders' is a voice for Founders, Owners, and Builders driving growth in Northwest Arkansas, hosted by Cameron Clark and Nick Beyer.
To recommend a guest or ask questions, reach out at nwafounders@gmail.com and follow us on YouTube and LinkedIn for video content.
[00:00:00] Burt Hanna: We were buying three truckloads of wax a month back then. This thing works. We, I ain't gonna work. We're gonna go from three truckloads to 27 truckloads next month. No way. I'm not gonna make this Donna. I need to tell the buyer. She goes, if you tell them that you can't do it, you'll never get another chance.
What's the most challenging thing about the candle business right now? Today? Finding about the wholesale gift markets was the ticket. When did you make the transition from potpourri to candles? I take $75 worth of old potpourri and trade it to her for a stove to make my first candles in, and my raw materials increased three times.
So all of a sudden I'm losing a dollar a candle on that, trying to save a sinking ship. What kept you from throwing the hat in? That's a good question.
Bert Hannah, thanks for coming on. You bet. Yeah. We're sitting here in your, one of your warehouses. Tell us where we're at right now. We're the candle factory. [00:01:00] It used to be the old standard register, uh, plant. So this building was built in the fifties. It was a, a plant that had been a staple in Fayetteville for years, you know, for 60 years.
And then they went bankrupt because of the changing market standard register. You know, they did stuff like tickets. Yep. You know, ticket business has gone away. It's all become digital and
[00:01:20] Nick Beyer: mm-hmm.
[00:01:21] Burt Hanna: And so I think their market declined and declined and we were lucky enough to be able to buy it right when they filed for bankruptcy.
And I bought it from, uh, CBRE, Dave Stein. Yeah. I think that's who you worked for. Is that right? Oh, I worked with with Clinton for a while, but yeah, they, they worked together. Yeah. Yeah. Uh, so it was really God's blessing to get this plant here. This has been a game changer for us. It's perfect for making candles because it's rectangular uhhuh.
Uh, so candles need a lot of length to, to 'cause you pour 'em and they cool as they travel down a conveyor. And this is like. 575 feet long. This is the best candle factory in the world. Well, I mean, I don't, everyone probably can't see if they're not watching a video, but like there's, yeah. [00:02:00] The long, the very long, uh, we, uh, conveyor belts that are right here behind you.
It's pretty cool. We can see it, we can see into everything right now. Um, and did you, did you, did you know that when you
[00:02:11] Nick Beyer: Oh yeah. Saw this place, you knew it was gonna be the perfect
[00:02:14] Burt Hanna: Oh yeah, I knew it. Yeah. It was lucky. I didn't ever think I'd get to buy this plant. In fact, I, I knew when they filed for bankruptcy, standard Register got bought by a company called Taylor Products and they're a $2 billion company.
And I wrote a letter to the president lady whose family owns her last name was Taylor. Mm-hmm. Sent it, FedEx and asked her just to let me have a chance to buy this building. And, um. She had her, their realtor out of Denver call me, and then they gave it to CBRE for David Stein. And man, the first time they sh I was the first person they showed it to and I made an offer.
Yeah. And the cool, this is it. Cool thing. Oh, this is, this, this is the best candle factory in the world I've been to a lot.
[00:02:55] Nick Beyer: Mm-hmm.
[00:02:55] Burt Hanna: This one is it, what's, what's the most challenging thing about the candle business right now, [00:03:00] today? Oh, the, the bad part about the candle business is it's, uh, no barrier to entry.
You could set up a, something in your garage today, go buy some wax, get a hot plate and cattle, and be pouring candles. Buy in two hours or five hours, sell on Etsy. Yeah, that's exactly right. And they don't know what the real cost to, uh, there's, they don't understand what the real cost to be at scale is.
Mm-hmm. Now, you know, there's a big trade off between cost. You know, we see these candles on Etsy for 40 bucks. Yeah. And we sell that to our retailers for $4 or $2 or whatever it is.
[00:03:35] Cameron Clark: Yeah.
[00:03:35] Burt Hanna: Uh, but you've got to have a lot of capital investment to make a hundred thousand candles a day, day in and day out.
Wow. Geez. Well, tell us about the beginning. So when you grew up here, college here, and you started the business in college? Yeah, I did. I was a senior at the University of Arkansas getting my degree in accounting. I was married at the time. Uh. We, [00:04:00] she made some potpourri that we, uh, that is a craft project.
And I said that that's back when Potpourri was popular, that if y'all know what Popery is, and, uh, that was, uh, this beginning of the something to do. She did it as a craft project. I tried to figure out how to sell it and I want to thank Call Your Drug. Uh, my buyer was Cheryl Willis. She's my first buyer ever.
She bought $18 worth of, uh, potpourri from me. No way. So, yeah. And she, you know, Cheryl Willis will always get my, I'll always answer her phone call.
[00:04:29] Cameron Clark: Yeah. That's awesome.
[00:04:30] Burt Hanna: And so, like, that was, so you start, you started during your senior year of college Uhhuh while she was, and then it was just, Hey, let's, we gotta make some money.
Let's go sell, let's go sell this. Well, my goal was only making extra a hundred dollars a month. Okay. I mean, that's, back in the old days, my house payment was 187. Mm-hmm. I didn't have a job. I was gonna school full-time and I was just looking for a way to make money. I had no idea it could get this big.
Yeah. And, and so talk about, you know. You didn't [00:05:00] graduate, you left, you left college early. 'cause it was going, you made some money. Good money that first year, right? Well, for fact, for the time, maybe it takes about 30 years before you ever really make any money. Yeah, yeah. It's the, it is the the uh, uh, let's see.
So. Uh, I was a, going to college, I had a scholarship, had nine hours left to get my accounting degree, uh, full. I didn't have a full scholarship. They gave me like 400 bucks. That's back when tuition was $400. Um, that's hilarious. I was working till two at night and I stopped doing my homework in advanced accounting.
And the, the, um, head of the accounting department was teaching advanced accounting. Her name was Doris Cook. She's dead now, so I can talk bad about her. But anyway, one day she, uh, came into class. I had done my homework and I was, you know, I, I went to bed at two and woke up at eight, eight Tuesday, 30 classes started at eight, last an hour and a half.
And she, uh, um, asked me. She said, Mr. Hannah, if you'd bought these two businesses and [00:06:00] you're consolidating these balance sheets, how would you do it? And I hadn't done my homework. I said, well, if I just bought these two businesses, I had my accountant, Steve do it. That's the guy next to me. He is a lot better at accounting than me.
And she got so mad at me. She made me come to her office after class, Uhhuh. And uh, I went into class, she yelled at me, fussed at me, said, you better, blah, blah, blah. And so I did the coolest thing ever. I just turned around, walked out, and I used to ride a motorcycle at the school. I had a, uh, I had a Honda XL two 50.
I'd ride up at the, back in the old days, ride up the sidewalk. I park right next to ba, I hopped on my motorcycle, drove down to the, uh, went down to the bookstore, Arkansas Bookstore, back in the old days, sold all my books and never went back. I didn't know that drop. I didn't do anything. So I'm sure that's last semester, which would be 1986.
No, 87. I'm sure it just got, uh, what's, what's a W or whatever. Yeah, I F's on everything. Yeah. Yeah. Never went back, never ask. So I started working full-time, that [00:07:00] was in March of 1987 and my goal was to make an extra a hundred dollars a month. I started trying to figure out how to make and sell this stuff.
So you go to these little gift shops in Eureka Springs or whatever, and back then there was a little gift shops everywhere. Uhhuh, there's thousands of them. Everytown had a lot of little gift shops. Independence, me and my wife at the time, I said, let's go on a sales trip for spring break. And I took off and this was probably the spring break trip was before I quit.
Okay. We drove from Tulsa to Dallas and I was driving through Dallas and I looked up and saw World Trade Center. I didn't know what that meant, but I pulled in there and she's like, why are you going in there? And she was hagging at me about why I wanted to do that. And I walked into the World Trade Center and I picked up a magazine, you know they have magazines out in the lobby.
Yeah. Giftware News Gift and Decorat Accessories and Giftware News. And that showed how, that's where people, when you say go to market. That's where the market was. I learned about these wholesale [00:08:00] trade shows from stopping into the World Trade Center. And you know, back then I'd go to like Dub Ashton, who's head of the marketing department and say, dub, how do you sell this stuff?
And, and those guys don't have a clue.
[00:08:11] Nick Beyer: Yeah.
[00:08:12] Burt Hanna: But finding about the wholesale gift markets was the ticket. And we started going to trade shows and we'd set up a booth at a trade show. And, uh, so my first real trade show was in July, June of 2000 and, um, of 1987 I went to a trade show in Chicago, um, set up a booth, drove all night up Chicago, set up a booth and figure out how not to have to pay the union fees to set up your booth.
Yeah. 'cause they'll hammer you on that stuff. We ended up selling $20,000 the first day, so
[00:08:43] Cameron Clark: Wow.
[00:08:44] Burt Hanna: It's, it kind of took off from, you know, it kind of took off from there. So that first nine months I sold about $180,000 worth of potpourri from, from March until December. Yeah. Then the second year, the first full year, I sold about $800,000 worth of potpourri and we're working out a little [00:09:00] crappy building and, you know, I was, I was always outta money.
Yeah. Broke. Yeah. Trying, just like, trying to get more product, I assume. Just like trying and like, well, you start a business and you buy stuff, you never thought you had to buy a desk, a computer, a filing cabinet. Yeah. A pallet jack inventory.
[00:09:15] Nick Beyer: Mm-hmm.
[00:09:16] Burt Hanna: You know, just goes on and on. And I was, my dad's a, a great man and, um, he had this building in South Fayetteville that he rented to me.
Uh, you know, father Teal probably didn't even charge me rent. I don't know what it was. He actually sold it to me. I think. And started the business. And, uh, I didn't know anything about anything. I didn't know what pallet rack was. I, you know, tried to build my own pallet rack out two by fours. Of course, nothing was square and it all looked like junk, but built the business up.
And then I was just, you know, I started out with $4,000 in savings and I didn't have, I didn't realize what it was. My dad said, you need a line of credit. I didn't know what a line of credit was, but he took me up to, [00:10:00] I went, before that I went to McElroy Bank, which is now Arvest on the square. Uhhuh. I went to see a loan officer who I knew, 'cause I had worked at Arvest as a kid, and um, her name was Karen Martin.
And she loaned me $2,500. That's all she'd loaned me, uh, without a co-signature. Mm-hmm. Which is reasonable. And of course that 2,500 didn't last. Yeah. 10 minutes. And, um, my dad, my dad said, you need a line of credit. And he took me up there. He co did the coolest thing a dad can do. He co-signed a line of credit with Gary Head, who was my banker and head, gave me $50,000 for, uh, with my dad's signature line of credit.
Of course, man, I blew through that like crazy. 'cause you're buying stuff you never think you need. I mean, just expenses everywhere. And I blew through that. And then I needed more. My dad did the coolest thing ever. He co-signed a 250,000 line of credit for me back in 1987 or 88, 87, 87 or 88. [00:11:00] Um, a lot of money back then.
Yeah, it was. And the business was growing and, uh, just, just continue to grow. So my second year in business, my second full year in business, I sold $2 million worth of potpourri and what Gary Head did, the coolest thing ever in February, Valentine's Day of 1989, I'm walking through McElroy Bank and Gary gave me my dad's signature back.
[00:11:25] Cameron Clark: Wow.
[00:11:25] Burt Hanna: Bankers don't do that anymore, so that's crazy. Big shout out to Gary Head for doing that now. Our best probably wouldn't even gimme my dad's signature back now. It's crazy. But thank you Gary Head. So I, I've been standing on my own since 1989. I've been able to borrow all the money and that's one of the beauties of America.
You get a kid who shows up in there and shorts and t-shirt and tennis shoes and you know, they loan you money. Yeah, they probably don't do that anymore. Banks were a lot pickier, but back then, you know, Gary could shoot from the hip. And, uh, so that's how I got started. [00:12:00] Banks are a little bigger here now too.
Well, banks, the Fed federal regulations are, yeah. Different. But then I started having to build buildings to grow the business. 'cause you couldn't find buildings in Fayetteville, Arkansas at that time.
[00:12:11] Cameron Clark: Yeah.
[00:12:12] Nick Beyer: So tell us why. I mean, 800 k in sales in the first year In 2 million sec. Yeah. Sec first 12 months was 800.
Okay. Two second year was 2 million. So what was different about your potpourri? Or why do you think the growth was so, so quick?
[00:12:26] Burt Hanna: It was a growing market. It was everywhere. Oh. And there's a company in Heber Springs named Hebrews, uh, named Aroma. She was the market leader. Her name was Patty Upton. And she was a wealthy woman.
Uh, you could tell by the way she presented herself. And she's a, she was always in the Gazette at the time. Yep. Bragging about how rich she was getting, making re. So I thought that was a good business to get into. And, uh, she is a lot more fancy than me and she sold to Dillard's and we sold the independent gift shops.
Her packaging was [00:13:00] fancier, stuff like that. But that's why, uh, I guess what was really the question is why, why, yeah. Why it grew. So you
[00:13:07] Nick Beyer: think it was more the market than your product or your go to
[00:13:10] Burt Hanna: go to market strategy? I mean, it was just kind or rising tide floats all boats. Okay. Yeah. Okay. And when the tide goes out, you find out who's swimming without their baiting suit on.
So anyway, the potpourri was hotter and hot, you just couldn't get enough of it. Everybody was on fire and we were always trying to give value. And so I, uh, after about my second year, I got an appointment with a Walmart buyer. So I'm here I am, 26, 25, working out of a building, not much bigger than his office.
And, um, I get, uh, uh, just me and this buyer named Doyle Parker. And he was looking for potpourri and I, I, uh, had appointment with him. He was looking, this is in January. He writes me an order with a pencil and a piece of accounting paper. He writes me a $750,000 order with a Pentel pencil [00:14:00] on a piece of accounting paper.
I got 45 days to figure out how to make three quarters of a million dollars for the Potpourri in 45 days in building, not this big. Wow. And so, um, um, of course my wife at the time, she was big on vacationing. She is already gone. She wasn't, didn't even know. And so, uh, didn't even know or wasn't even there.
So I was so excited. This big order I got, my dad, me and him went down and looked at my building that I had, and I figured out it was gonna take like twice as much space I had, but somehow we figured it out. Uh, one of the guys that helped me get that done still works for me today. His name is Cecil Smith.
So big shout out to Cecil Smith, um, for sticking with me this much, uh, wow. So long. But Cecil and I, so I got this humongous order. And I mean, I, I, I, and I was so broke at the time. I used to burn my trash instead of a dumpster.
[00:14:52] Nick Beyer: Mm-hmm.
[00:14:52] Burt Hanna: And I carried a light around in my pocket and I'd light a box and burn, you know, burn trash out there over on where the Walmart neighborhood [00:15:00] market is now.
And, uh, when actually two of those employees are still with me. Linda Frederick was with me too. I was burning trash. Uh, and then I got a phone call back in the old days and had a phone that was hooked up to a wire. I had to go in and answer this phone call. And Linda came in and said, the building's on fire.
I said, don't call, don't call the fire department 'cause it's illegal. Right. And I walked out the building, it looked like the towering inferno, man. The thing, flames were coming up over the roof. I said, call, call the fire department. So they called the fire department. Total loss, no insurance. Oh my gosh.
Had all my inventory in there, all of my inventory. Um, of course my wife was on vacation, still down in Florida with her sister. Uh, I didn't, I, I don't know if I told her I burned a building down, but me and Cecil, we got all that shit cleared off of that slab and I went out and bought some old, uh, old, um, uh, uh, dryers from a laundromat to figure out a way to [00:16:00] dry our wood chips.
[00:16:01] Cameron Clark: Yeah.
[00:16:01] Burt Hanna: We were running in three days. Boy, it looked terrible. I mean, what we made look, looked like something outta a Snuffy Smith, but we got it running. We are back up and running three or four days. Wow. So that guy still works for me. And the lady who called the fire department still works for me.
[00:16:15] Nick Beyer: So talk about that because I feel like that is, I mean, talk about top three traits of an entrepreneur, the ability to figure it out.
Right. Those three words, figure it out. Yeah. Don't give
[00:16:25] Burt Hanna: up. Yeah. I mean, anything, I don't know that you would tell someone who's in college right now and trying to start something kind of outta school. Anything you would advice you'd give that person spend less than you make and outwork the competition.
Yeah. You'll work out. It usually does. You know, a lot of these guys, I get people come and see me and they wanna start, like, I've had people come and want to want my advice and these, or they rent a building from me and they're taking more salary than I was taking. And it's like you guys, if you get to a certain, the best time to [00:17:00] start business when you're broke.
Yeah. Uh, you get up to where you had a expensive house payment, car payment, and kids are going to private school, you gotta make money from the get-go. And it's hard to start a business that makes money from the get go. I have never been able to do that. Mine take about 20 years to start making money.
[00:17:16] Cameron Clark: Yeah.
[00:17:17] Burt Hanna: Geez.
[00:17:19] Nick Beyer: So talk about you didn't need to raise capital early on. You had some savings and then took some lines of credit and that's kind of how you started to accelerate the business. Is that correct? Right. Bank debt. Bank debt, yeah. And then anything else just on what those early years look like? When did you make the transition from Potpourri to candles?
What year was that in 1990. So three
[00:17:42] Burt Hanna: years in ish? No, it was, it was like really It was 92. Okay. 1992. Okay. So I started in 87, 92 to five years. We're already doing about three or $4 million in sales in Potpourri. And I was at a trade show for a chain called Ben Franklin. [00:18:00] And the buyer came, one of my buyers had small, had a store out in someplace in Oregon is, um, anyway, he came up to me, uh, and said you should, um, get in the candle business 'cause Yankee candle, uh, I placed mortar for Halloween Yankee candle back in May, and they shipped it to me and it was only 40% complete.
You should get in the candle business. So Wow. Uh, his name was Adrian Taylor. Uh, I don't know if he's still alive. I've thought about writing him and telling him thank you. He told me Get into the candle business. I came home, I got a book at the library I went to. There was a store in that, that there was a store in that building You just bought where Rick's Iron Skillet does?
Yeah. It was called, once Was New. It was a secondhand store. It was owned by Roger Israel. Who was Ben Israel's brother. Mm-hmm. His wife Judy ran it and she used to buy Old Junkie Pope Seconds from me 'cause it's a junk store. [00:19:00] And I traded her $75. Okay, so here's a guy running a three or $4 million business.
I take $75 worth of old potpourri and trade it to her for a stove. To make my first candles in.
And so I bought this little junky stove for $75 worth of potpourri. Threw it, put it in my truck, took it up to a building. I'd already built a several buildings up there, put it in a corner, and I, I went to the library and got a book on making candles and went to food for Less and bought 10 pounds of canning wax.
I went to Walmart and bought some jars. Wow. And I started making candles with a pot, melted that 10 pounds and poured wax in there and started making candles. That was in 92. Like I said, I went to the library, got a book on making candles, and, uh, told my brother Thad, who's down in the office downstairs, he, I said, uh, you run the office, I'm gonna go out and work in the plant for a couple months and learn how to make candles.
[00:19:55] Cameron Clark: Yeah.
[00:19:56] Burt Hanna: And so made my first candles in 92, he went to the [00:20:00] Dallas Trade Show, which they have a summer gift show. And uh, after the first day he called me and said, you better learn how to make candles 'cause these sell a lot better than potpourri. Wow. So from nine, fat was changing. That's right. Home fragrance was changing the candles in my, um, so we went from about, in 92, we were 90, a hundred percent Potpourri by 96 we're 199% candles.
Geez. So 96 I've gotten, we'd gotten up to about eight, $9 million in say 8 million. Six to 8 million in sales.
[00:20:34] Nick Beyer: Mm-hmm.
[00:20:34] Burt Hanna: And we had about 5,000 independent customers across the country. A lot of like boutiques still. That's right. Mom and pop.
[00:20:42] Nick Beyer: Yep. And how were you doing sales back then? Going to these trade shows?
The trade shows. Okay. That's
[00:20:47] Burt Hanna: right. And they would place an order of the trade show and then for the year or clipboard and they'd place an order and you'd take an order for two to five, you know, a hundred dollars to a thousand dollars. And yeah, you'd sit at tra Another lady is with me, [00:21:00] still here, her name's Donna Whittle.
She used to go to a lot of trade shows with us. And uh, we'd go and stay in cheap hotels and drive most of the time now. Thad and Anita, thank them. Uh, big shout out to them. My brother and sister-in-law, they worked for American Airlines. They gave us lots of free passes back then. Yeah. So lots of free travel.
Uh, we found the cheap hotels and cities, I mean mm-hmm. Man, you're talking about 88, 89. We found a hotel in Chicago that's 30 bucks a night. Yeah,
[00:21:26] Cameron Clark: yeah.
[00:21:28] Burt Hanna: And so we'd go to those shows, write orders, come back and, you know, figure out how to fill 'em.
[00:21:32] Nick Beyer: And then you'd ship them at that time.
[00:21:34] Burt Hanna: Yes. You know, most of that was pretty well, not, not too far out.
And then every once in a while you'd get a big customer outta the deal. Like Michael's, Inc. I was sold to them. Hobby Lobby. I'd pick them up at a trade show. Uh, those were two of my bigger customers back then. But then these independent stores were very important to me. But that's business went away.
[00:21:56] Nick Beyer: Okay.
So talk about those days. You, you're getting into candles, you're at the [00:22:00] trade shows. Seems to be the fad. And home. Home fragrance is changing. What were your candles different than your competitors back then? Was it just like they couldn't order enough from Yankee candle? Why? Why do you start to see that acceleration in the mid nineties?
[00:22:16] Burt Hanna: Well, those guys are always, Yankee was selling 'em for $7 and 50 cents and we were selling 'em for three or three 50 or whatever. Mm-hmm. So we're about half the price of Yankee, and that's still the case today. I've, I've only been good at selling at a low cost, not at high cost. Why is that? It takes a different personality.
I mean, you know, different personalities sees value in it. A brand zealot, you know, someone who's good at selling a brand can sit there and convince you that this is worth three times more than what theirs is. Yeah. I'm more like, here's the price. We can deliver you a hundred thousand tomorrow if you want it.
Yeah. Execution. Well, we're, you know, we're just, uh, you know, it is just not, just not been very good at selling a high margin product. [00:23:00]
[00:23:00] Nick Beyer: Yeah. So you're taking a hit on margins as part of that, or your ingredients difference, you're able to kind of solve some of that. I mean, how different can a candle be made?
And that's an honest question. I mean, I, yeah. Well, how can
[00:23:12] Burt Hanna: it, you know, it's your wax. We all have about the same wax. Okay. We have good formulations. Some people don't have as good a formulations as us, but that's just from years of trial and error. And the guy running my lab's been with me probably 25 years, and he's smart.
His name is Mark Turner. And I see all my competitors put all this crap on LinkedIn. Like one of my competitors listen to this. They, they say they got 18 people in their lab, 18 scientists, Mark Turner does it all. Wow. And, and. I, I went to another company up in Pennsylvania that sells fragrance oil, beautiful lab, smartest woman, you know, she sits there and tells me all about the chemistry and their fragrances to make 'em burn good and candles and how great they're doing.
And you, you feel dumb. And then you go into their test room, they're burn test room. They're not getting as good results as us. Wow. [00:24:00] So we got a lot of, we got so many talented people that have learned how to do stuff. I mean, mark makes his own whiskey or whatever his own still He is a chemist.
[00:24:09] Cameron Clark: Yeah.
[00:24:09] Burt Hanna: He's just not titled a chemist.
Wow. And were you. Were you acquiring any other companies back then, or was this just pure hate sales growth? No sales growth. Sales growth. I bought several. It's never worked out for me. I'm not a good acquirer and we're better ready to turn in internal growth. But I did have a company in the Potpourri business.
There was a company over in Memphis, Tennessee, and this guy was a great salesman. His name was Bill McCauley. He had a company called Agape Products.
[00:24:37] Nick Beyer: Mm-hmm.
[00:24:37] Burt Hanna: He's a good salesman, a bad accountant. So he is losing money. And uh, he'd gotten his business up to about $6 million. And he is a good manufacturer.
He is smarter at me than making stuff, and I don't know if he is still alive or not, but he got in trouble and he had a financier, you know, he borrowed money from a guy named Kimmons Wilson. Okay. Kimmons Wilson was the guy who started Holiday Inn. Oh, [00:25:00] wow. So he's over in Memphis. He's renting a building from Kimmons.
Kimmons, whenever you get private equity money, what they do is they'll send in their accountants and you gotta pay intercompany fees and all that stuff. Yeah. He's renting a building from him. Well, all of a sudden, Bill's losing money and Kimmons won't give him any more money. So I pick up some of his Dollar General business, two or three truckloads of Potpourri.
Back then, it seemed like a big deal all of a sudden, a Dollar General. And actually Kmart started filling for Kmart, uh, for him. And he ended up owing me, no, Kmart owed me a quarter of a million dollars. And they, when they found out I shipped it, instead of him from his company, they wouldn't pay me. So I'm sitting there, I'm fixing, I have to eat a quarter of a million dollars when I'm your age or younger.
Gosh. And that's back when a quarter of a million dollars meant something, you know? Mm-hmm. And this guy's in financial trouble. Kevin Wilson's son, who's his lawyer, uh, tells him, quit putting money into it. Mm-hmm. [00:26:00] Bill's going broke. Kim is, Wilson calls me, he's about like Sam Walton. So Kim is himself, calls me up, says, I want you to come and buy my company, buy his company from me.
And I said, and I was real busy. I was fixing to go to Baltimore. So they're talking about, he is on the cover of Time Magazine. This guy calls me up and says he wants me to come to Memphis and buy his company from him.
[00:26:21] Nick Beyer: Mm-hmm. And
[00:26:22] Burt Hanna: I was fixing to go to Baltimore two days later and I had to go and I was driving up to the county courthouse to pay taxes, property taxes.
So it must've been in October. And, 'cause they're always due October 10th. Yeah. And it hit me driving a ship ball, yell if I buy his company for less than what Kmart owes me, I'll get it for free. Yeah. Oh yeah. So I called him back. I, I, well, when he told me to come and see him, I said, Mr. Wilson, I said. Your company's got the flu and if I buy it, it's gonna, I said, I said, your company's sick and if I buy it, it's gonna give my company the flu.
I'm not interested. Yeah. And then it hit me driving to pay [00:27:00] taxes. I go and buy it thing for less than a quarter of a million dollars. It's gonna work out, it'll be free. So me and my brother Thad chartered a plane. We went to Memphis the next day. Someone with junkie 180 2, I don't even know who flew us over there, probably Bill Smith or somebody like that.
We, we, we go to Memphis and Kim and Wilson owns the FBO. So here's this 82-year-old man, big Cadillac meets just him.
[00:27:24] Cameron Clark: Yeah.
[00:27:24] Burt Hanna: Meets me and my brother. So we go to this factory, which is three times the size of mine. And Bill was making, had all, you know, he is making stuff and he just bought a big expensive bag of machine to bag potpourri and had a bunch of inventory.
And we, we start going it and his, he has this big. Computer printout back of that old green bar stuff. I don't even know if anybody knows what that is anymore, but Uhhuh, it's big computer printout. And he'd pull out a line item and it'd be plastic bottles. And he goes, we paid 23 cents for these bottles. I got 5,000 of them.
[00:28:00] Give me a dime. He did this for about 20 minutes and I said, Mr. Wilson, I said, we're on two different pages here. I gotta go. Yeah. I, I'm not interested. And I said, we gotta go. And he goes, hang on a second, boys And Thad's with me. And, uh, he, he said, let's go to lunch. So we go to this, to the first Holiday Inn in Memphis, Tennessee, and just me and him.
So That's pretty cool. Yeah. You're with the founder of, and he tells me a story of starting Holiday Inns. It's a great story. Mm-hmm. And, uh, he's, he says, now, let's get back to this. Pulls out that book again. He starts saying, I gave $10 for, I mean, we gave. 3 cents for these labels. Give me a penny.
[00:28:40] Cameron Clark: Yeah.
[00:28:41] Burt Hanna: I said I gotta go.
And I said, uh, I gotta go. And, uh, he said, hang on, boy. He, I said, Mr. Wilson, all I give you is $175,000 period.
[00:28:56] Nick Beyer: Mm-hmm.
[00:28:58] Burt Hanna: And uh, he goes, you [00:29:00] got a deal. So he stuck his hand over, he shook on it. And uh, we go back to his office, got a big office, uh, bigger than this, big as this whatever. And he starts, we start going over the deals.
His son's the lawyer. Yeah. Kinda like that as my lawyer now. And, uh, Thad looks at him and goes. He goes, 175,000 that goes, and now you'll finance that, won't you? He said, hell no. I, I called your banker, who was Gary Head. He goes, you can buy anything you want. So we write him a check for 175,000. He absorbed that company kind of turned out to be a dog, but at least I got my quarter of a million from Kmart.
[00:29:39] Nick Beyer: Yeah, you got it back. Yeah. And so did the operation stay in Memphis? No. Did y'all move a bunch of products? It's 26 truck close.
[00:29:45] Burt Hanna: We bought that stuff to Fayetteville and started, used it up and I probably broke even on that and I bought two or three companies like that. Mm-hmm. They never work out. I just bought one in California two or three years ago for a million dollars.
It's, it's been a dog? Yeah. [00:30:00] Candles or, yes, it was a candle company. You're primarily buying inventory on inventory and shelf space. Okay. It's hard to keep that shelf space. Okay. When a company starts getting in trouble, man, those buyers will cut that shelf space out and. Yeah, if they miss a shipment or two.
So if you buy a troubled company that hadn't been shipping good to somebody, man, they'll cut you out in a heartbeat. Mm-hmm. Which they should. Yeah. They don't have time for it. They need some more reliable, they need to get some, they need to get some sales off that counter. Yeah.
[00:30:28] Nick Beyer: So talk about the late nineties and early two thousands.
Read something about a factory or an, sorry, an outlet in Tawny Town. Did y'all end up building that or what was I did, I built that. Okay,
[00:30:40] Burt Hanna: man. Then, so I got this deal in 97 with a buyer from Walmart. Her name is David Richardson, still alive. Thank you, Debbie. Forgive me a chance. Um, she came down, my salesman, got her talked into coming down to see our factory.
She had a, there's a big pillar candle that was called [00:31:00] a, it's a six inch, but six inch diameter candle. She came down, we didn't have any experience making candle, those kind of candles, but she came down and said, I want this. And it was super popular at the time, and there's only one company in the United States that was making it.
They were up in Pennsylvania and they couldn't supply Walmart. So she came down, looked around, saw what we were doing, and she goes, if you can make this candle for me for seven bucks, I'll buy 189,000 of 'em from you. This was May of 2000 and No, 1997. She said, I'll buy 189,000 from shipping in September.
So I said, that's the deal. We shook on that deal and then I bought a thousand candle molds and I thought, you know, a thousand candle molds. You pour wax in there. Uh, they'll set up in four hours, turn 'em six times a day. Uh, six times a thousand, 6,000 a day. That'd be no problem. I got those candle molds in.
We started pouring that stuff I wasn't getting, but it turned over every [00:32:00] 24 hours and my scrap rate was 60%. I'm like, oh man, I'm gonna go broke. There's no way I can make this order. Yeah. And, uh, I have a lady works for me named Donna Whittle. She's fixing to retire. And I said, I'm not gonna make this Donna.
I need to tell the buyer. And she goes, if you tell them that you can't do it, you'll never get another chance. That's good advice. Wow. And that would be like June 1st. So I said, I said to, I had a, a mechanic and a electrician that worked for me. They were kind of my maintenance guys at the time. I said, let's go to, they're the, the machines for making candles were made in Germany at the time.
[00:32:40] Cameron Clark: Yeah.
[00:32:40] Burt Hanna: I said, let's go over to Germany. Look at those machines.
[00:32:43] Cameron Clark: Yeah.
[00:32:44] Burt Hanna: And there's three companies making those machines in Germany at the time. And I went to all three of 'em, the first one. And they have a process where you turn the wax into a powder and then you press it. Okay. And I, I went to the first company, I said, I wanna make this six inch by six inch candle with a press.
Can you [00:33:00] do it? They said, it's not possible. So we went to the next company and sold 'em the same thing. And they said, it's possible, but nobody will buy it and we're not gonna spend the effort on engineering to make that, that machine.
[00:33:12] Nick Beyer: Yeah.
[00:33:13] Burt Hanna: And the third guy, he's more like an American, his name Michael Ian.
And I said, uh, he said, no problem. We can make you a machine, but it'll be 18 months. So this is June 1st, I gotta deliver 189,000, September 30th. Wow. So it's amazing. I didn't smoke, isn't it? So anyway, he said, I can't get it to you for 18 months. Well, I saw one of those machines laying on his floor and I, this, when it hit me, he didn't make the machine.
He drew it out and had machine shops make that stuff for him. Yeah. I said, let me buy those parts and put it together. He said, we're not a kit. We're not a kit shop. Yeah. So we came home on the plane, decided how we were gonna build that press back before the internet [00:34:00] got out, the yellow Pages, started trying to find machine shops.
There was a machine shop in Fayetteville called Bargo Engineering. He didn't have time to mess with, and I didn't know him at the time. Now we're good friends. Um, and I found a couple other machine shops, but I found one in Fort Smith, and this guy's name was Mike Barnett. He was working for a company called Copco.
[00:34:22] Nick Beyer: Mm-hmm.
[00:34:22] Burt Hanna: And I called him and I said, this is what I'm trying to do. And that guy understood what I was saying.
[00:34:28] Cameron Clark: Yeah.
[00:34:29] Burt Hanna: He understood what I said to him over the phone. He got it. Yeah, me and him. Got it. So I drove down Fort Smith next morning at six o'clock 'cause he is so busy working at this company. He didn't have time to see me except at six or so.
So I was there. Fort Smith six o'clock, explained to him what I wanted done. He drew it out on a piece of paper and he had me, the first one built in about four weeks. Wow. And so he's fixing to retire. He is worked for me for 30 years. He's worked for me since 1997. He's down there in the engineering office.
Wow. But he [00:35:00] made me the first two in, in four, in about four to eight weeks. No way. Yep. And so we got those presses running about September 1st. And I told my wax company, I said we were buying three truckloads of wax a month back then. I said, if this thing works the way I think it'll work, we're gonna go from three truckloads to 27 truckloads next month.
Geez. And it worked. And so we went from three truckloads of wax in one month to 27, then September to 40 in October. Oh my gosh. That thing took off like the once in a lifetime thing, that six by six candle.
[00:35:41] Cameron Clark: Yeah.
[00:35:41] Burt Hanna: And it was selling as fast as we could make 'em. And you know, we went from a six or 8 million company to about a 60 million company in about 36 months.
Wow. Yeah. And that, that was primarily through Walmart. That's right. Yeah. Mm-hmm. Most of my success has been, been through Walmart [00:36:00] or a couple other big retailers. I mean, it's a blessing to be here. Yeah, that's right.
[00:36:05] Nick Beyer: So the six by six back then, was anyone else making
[00:36:09] Burt Hanna: that or you Not in the United States.
I mean, there's one company up in Pennsylvania that was pouring 'em in those molds and they were called American Candle Company. And they're gone now as an old. And that thing, we sold more of those than anybody in the world for about five or 10 years to Walmart. Man, we sold. We were making 70,000 of 'em a day at one point.
Geez. And so that was like year 2000 when you were like, mm-hmm. 60 million revenue from 97 to 2000. That's when it really blew up.
[00:36:38] Nick Beyer: Mm-hmm.
[00:36:39] Burt Hanna: And then, so talk about the, from 2000 to the up to the recession, kind of what that was, what that was like. Which recession? Oh, oh oh 8, 0 8,
[00:36:49] Nick Beyer: 0 8. Oh eight through 12.
[00:36:50] Burt Hanna: Yeah.
Uh, you know, we, the, that. That product has, all products have a lifecycle. And by about 2005 that was [00:37:00] waning and we couldn't come up with a new hit. So our business suffered not so much because of the recession, it's just because our product was losing steam. And I made the traditional mistake that vendors do with Walmart, it's keep lowering your price till you go, almost go broke.
And thank God I survived that because I cut my cat cost a half and my raw materials increased three times. So all of a sudden I'm losing a dollar a candle on that, trying to save a sinking ship. And, uh, we survive that, thank God. Um, but that, you know, that's a traditional trap that vendors get in with Walmart or any other big retailer thinking volume will solve their problems and it won't.
[00:37:42] Nick Beyer: Hmm.
[00:37:43] Burt Hanna: Well, and it's, I'm sure it's hard, like easier said than done of like, Hey, this is just a season. Let's just push through for this, you know, six months or how, however long. Is my guess is what you're, what what you're probably thinking at the time, or I know. Well, you got 200 people that need a job. You feel obligated to keep 'em working and think you can [00:38:00] work through it, but you can't if the money, if it doesn't add up, you're losing money on every piece.
It doesn't matter how many pieces you sell. Actually it's worse to sell more. But we survived that. Now we've, we've transitioned our sales, listen, arch sales went from 60 million in 2005 to 9.6 million in 2012. Wow. That's like flying a 7 47 with three engines out. It was terrible. Had a 600,000 square foot factory in the industrial park.
I mean, it was terrible. And what, yeah. So keep a big shout out to Darst for financing me during that time. Yeah, well see. Said go more into that. So it was a, how, how long, how many years was that period where the just decline, decline. Decline. Oh God. It was the seven or eight years of decline. Losing money more than you can imagine.
You know, losing millions of dollars a year. It's crazy. What, what kept you from throwing, throwing the hat in? I didn't have any choice. Mm. You didn't have any [00:39:00] choice. I, you know, you got debt
[00:39:02] Cameron Clark: and
[00:39:02] Burt Hanna: obligations. You just gotta get up and go to work every day. Hope for the best.
[00:39:06] Cameron Clark: Yeah.
[00:39:07] Burt Hanna: Did you prep well before that?
Would you say? Like, I mean, from a, you stashed some cash away? Well, or, well, I bought a lot of real estate Yeah. In the buildings. Yeah. Yeah. And I didn't do a very good job of managing that until the last couple years. We're still polishing that up some, but, you know, the, the, the reason why I was able to survive is that we always focused on value, everything in value, so,
[00:39:31] Nick Beyer: mm-hmm.
[00:39:31] Burt Hanna: Most people had already had a jet and a yacht and a house in Florida by that time, and I was, I didn't, yeah.
[00:39:37] Cameron Clark: Yeah.
[00:39:38] Burt Hanna: That, that, that made the biggest difference. Hmm. Always living below my means. I'm sure it was pretty hard not to what, live below my means. Yeah. Well, I don't know, but I'm talking about even during good times.
Yeah, that's, that's I'm saying pretty hard not to and Oh, I don't know. You don't really care. Yeah. I mean, if you don't care, you don't care. Yeah. You know, maybe you don't care about, [00:40:00] and now I like good stuff. Like there's a lot of stuff I buy that makes no sense. But it's 'cause I like to go fast and I like, you know, but I got a Hellcat instead of a Lamborghini.
Yeah. And that Hellcat gets you way more bang for the buck. You know, you had a motorcycle this whole time. Oh yeah,
[00:40:15] Cameron Clark: yeah,
[00:40:16] Burt Hanna: yeah. Of course. It never, never start anymore because I don't use 'em. But I got three or four of 'em.
[00:40:20] Cameron Clark: Yeah.
[00:40:21] Burt Hanna: You know, all but you know, instead of buying a uh, you know, buying an expensive rocket, you know, rice rocket, you get probably gotta cut that rice rocket out.
But you know, instead of rice rocket, I had an old Honda this fast it was. Fastest production motorcycle for 10 years at VF 1100. Man, it's a great motorcycle. I still have it. Won't start. Need to get it running. Yeah. So let, let's, let's go back to the, the eight year period of declining sales Uhhuh from 2005 or six to 2012.
So aside from, Hey, just show up, just show up to work every day, what, what else would you tell somebody that like, that's going through something similar right now? [00:41:00] Okay. So, you know, talk to your banker, explain to him what you're doing. And my banker, Craig Shea Ourves been a great banker to me. And he said, he says that my plan that I told him was, we're gonna grow out of this.
So he says, I've done it, you mean? Yeah. And that was our plan was to continue growing out of that, that problem. But it's really, I'm God's blessed me and this company in ways I can't understand, but that's really what I think we're favored
[00:41:30] Nick Beyer: by God. So talk about 2012. Sounds like you're starting to come up for air.
Oh, yeah. What, what gives
[00:41:38] Burt Hanna: that air? What, what, what happened? I can tell you exactly where I was. I was getting off a plane in Syracuse, New York when my buyer from Walmart named Amy Bagley, big shout out to Amy, called me and said, congratulations, you've been awarded, uh, the the triple Poor Melt business and a couple of candle items at Walmart for [00:42:00] 2013.
So that would've been July of 2012 and that, so we went from say, $12 million to $28 million in one year. And wow. We came up, thank, thankfully to Mike Barnett. We, I came up with this. We came up with this idea of making a melt, which is those things that go into a melt warmer that has three fragrances in it.
And Mark Mike. Guy I hired down at Copco, uh, he worked for a guy named Chester, sorry, Chester that hired Mike. Anyway, uh, Mike figured out how to make these melts with three fragrances in there, and, uh, we sold it to Walmart and that, that really pulled us out, started making money again. Yeah. And uh, we got that Walmart business that lasted about three years until we got cut out with Walmart.
There's always a, you'll do real good and then your product will lose shelf space and your business drops off. So you gotta save up to, to [00:43:00] survive that. It's not just Walmart. All retailers have done to me. Yeah, sure. But anyway, so since 2013 on it grew up until it dropped back down in 2017. Dropped about 10 million in sales in 17, and then from 17 on, it's really continued to grow.
We, we, we used to try to make all candles for all people and then we concentrated, say in 2021, just focusing only on a jar Candles. A candle. A candle that has wax in it. Yep. With wicks and fragrance. And that's, so that's what we concentrate on. Being real good at that. Why'd you choose that? That's where the market is.
Go where the fish are. Yeah. Instead of trying to make the fish up. I tried to for 20 years to make the fish. We're just gonna go where the fish are.
[00:43:45] Cameron Clark: Yeah.
[00:43:45] Burt Hanna: Fish where the fish are.
[00:43:49] Nick Beyer: That's good. So, talk about some of the customer consolidation, because I think you have, out of the founders that we've interviewed, you have a unique business in that you [00:44:00] were working with a lot of these big retailers that they've all gone, bro.
Grew up. Yeah. You know, our kids will never see a Sears. They'll never, you know, they may not see a JC Penney's. I don't all of 'em. Some of these, right. And so talk about what that looked like. You, you get word, A company's going bankrupt, they owe you mm-hmm. Half a million dollars.
[00:44:17] Burt Hanna: How does that work? Oh man.
So one day when I was younger, I used to come in a lot earlier. And as a thank God, I came into work, there's a company called Service Merchandise. Service Merchandise. Uh, y'all don't even remember them. They're out. Memphis or Knoxville. Nashville maybe. I came into work one day, I couldn't sleep. I came in at five and I used to get the Wall Street Journal and I opened it up and service merchandise owed me about $500,000.
And I read in the Wall Street Journal, they'd missed an interest payment the day before. Oh no, it's a bad sign. They owed me a half a million dollars. I called Bill Smith up in [00:45:00] Springdale. He had a flight service, chartered a plane, and I sent my CFO and my sales manager over to service merchandise to collect from that buyer.
Yep. And of course they're having all kinds of financial difficulties and those guys sat in the lobby all day and told the CFO nobody'd see 'em. They sat in the lobby till I took, they, I said, y'all stay there. And finally they got ahold of somebody and the CFO or somebody said, we'll get you a check in next week or two.
So service merchandise, thank God they sent me a check like the next week for a half a million dollars covered their receivable. Wow. That's before they filed and they sent this check and then about a month later they filed for bankruptcy and there's what's called preferential payment. Mm-hmm. Y'all know what that is?
Uh, no. It's like who, who's the highest in the totem pole? Yeah. If a company pays you off within 90, it's around this. If they pay you 90 days before they file for bankruptcy, you gotta give it [00:46:00] back to bankruptcy court. 'cause they pay, like, they'll go pay all their friends or whatever. Yeah. So we got a preferential payment.
No, they charge so that bankruptcy court want us to pay 'em back. So big shout out to Chuck Tranum. Tom Stockland, my lawyers. So Chuck Tranum talked him into, said, oh, this is just a little company working outta their basement. You can't give that back. And I think we end up giving $10,000 back on that deal.
Wow. So thanks to Chuck Tranum on that deal. Geez. In fact, we've had Kmart go broke on. So does a quarter of a million service merchandise, JCPenney, uh, oh God. Um, man, who else? Oh, we just, within the last couple years, three years ago, we had a rep group just, why won't you sell bed to Bath and Beyond? My brother said, they're dying.
We're not taking that risk. Oh, you're crazy. Whatever. Linens and things, bed Bath and beyond, you know, bed, bath and Beyond's Gone. It'll never come back. So there's been a consolidation [00:47:00] and it's, it's really, it's Walmart. Several others. That's who we wanna sell to. And are you selling online at all, or any direct consumer?
No, we don't. Yeah. We mean we, it that's, we sell a product that retails for $3 and 97 cents for 20 ounces.
[00:47:18] Nick Beyer: Mm-hmm.
[00:47:20] Burt Hanna: A pr, you know, with the glass and the wax. There's 11 and a half ounces of wax in. It sells for $3 97 cents. The glass weighs about oh, 200 grams, whatever that is. Three quarter of a pounds. So you're talking about 20 ounce, 28 ounces total.
Mm-hmm. There's no way to ship that to a consumer or less than the retail cost at Walmart.
[00:47:40] Cameron Clark: Yeah. So we don't even chase That makes sense. Yeah.
[00:47:43] Burt Hanna: Now, these people who have brands, they'll spend $20 per item promoting that brand.
[00:47:50] Cameron Clark: Yeah.
[00:47:51] Burt Hanna: It's to sell a candle for $40.
[00:47:52] Cameron Clark: Yeah.
[00:47:53] Burt Hanna: We just stick to what we know. We're gonna, I'm gonna, I'm 62 and I'm gonna stay in those, in those two yellow [00:48:00] lines.
What I know.
[00:48:01] Nick Beyer: Hmm. And for the other retailers, do you white label to to their, yes.
[00:48:06] Burt Hanna: Okay. Okay. But that's all we do is store brands. Okay. We have a brand that we own called Timber Wick. It's in Publix. Yeah. Yeah. It's a pretty good brand, but we're just not good at managing brands.
[00:48:17] Nick Beyer: Did you start that or buy it?
Yeah,
[00:48:18] Burt Hanna: no, I started that. It's a wooden wick candle. And was it, was that new? Was that up and coming? Uh, 20 years ago when wooden wicks were coming out. We, it's just, it's a maybe a million dollar brand. It's nothing huge. Okay. Mm-hmm. That's cool.
[00:48:33] Nick Beyer: And then talk about how the technology, how the packaging, how things have changed over the course of 97 to, you know, 2024.
Okay. Talk, talk through some of that. Um,
[00:48:46] Burt Hanna: efficiencies increase if you gotta keep pushing it. But for instance, one of these candle lines, same width, almost the same length. Um. 10 years ago, we'd be lucky to get [00:49:00] 8,000 a shift off of it. 8,000 a shift maybe 10 years ago. Mm-hmm. On one line. One line.
[00:49:06] Nick Beyer: Okay.
[00:49:06] Burt Hanna: Now we get 28,000 a shift.
So three times more productivity. Well, and that's because paying attention to little stuff like the wickers going down, we bought all good equipment. When we moved this plant, I threw out all the old stuff, put in all new equipment, spent a lot of money, uh, standardized it. Everything's the same. Pretty much put a lot of money into the software system that runs the factory.
[00:49:33] Cameron Clark: Yep.
[00:49:33] Burt Hanna: Um, you know, manages the wax. Mm-hmm. Uh, so, uh, that, that's made a big difference is paying attention to that, not having a, I started looking at candle lines. Like you look at a printing press. Printing press, you know, they'll spin. Four hours getting a print and press everything in registration. And when they turn that on, that sucker runs fast and they produce a lot of stuff in a few minutes and then they're done.
WW I've started [00:50:00] looking at the value of what we can get off of each line every hour and not taking jobs that don't make the cover the cost of the, the fixed cost of running that line. Yeah. And, and so, and talk and talk about the, I think I read a few, I forget when you said it, but, uh, maybe a few years ago about just your competition overseas, I guess particularly inmates in China.
Mm-hmm. Is where most, most of it is that Vietnam and in India? Yeah. Okay. And has that, I mean, is that still the case? Like Oh yeah. Today. And how did the, I mean, are you, with, with the, the, the tariff situation, are you, did that help you, hurt you? What was the, how, how's that kind of impacted Always. Yeah.
Terrible competing with Vietnam and China and India. Yeah, those, those guys get paid. The India pays. I mean, India pays their help a dollar a day. Vietnam and China pay their help. $10 a day, maybe our costs hundreds of dollars a day per person. Yeah. So you gotta, that's one thing you make it up on is, is how do you [00:51:00] get it to the consumer for less?
'cause nobody cares about anything but price in my business.
[00:51:04] Cameron Clark: Yeah.
[00:51:04] Burt Hanna: Everybody talks about buy America. They'll buy America as long as it's within, very close to what China or Vietnam costs. Yeah. Or India. So you are competitive with their costs. I think nobody will tell me they're paying more, but I, I think we're actually, they do sell some stuff that you can't understand how they sell it for so little, but those governments will give them 15% of selling price back.
[00:51:25] Cameron Clark: Yeah.
[00:51:26] Burt Hanna: Subsidized. Yes, that's right. Just to get us dollars into their economy. Yeah. Yeah. Let's talk about the business now. Kind of where, where it's at. Um. Your son's in the business now? Yeah. Working the, yeah. Maybe give us an overview of like how many employees you got and, and, and then kind of we wanna also talk about what's going on maybe in the future.
Yeah. My son's in the business. He is been with me for about 10 years in the business. He's just gotta decide whether or not he wants to take it over or not.
[00:51:53] Nick Beyer: Mm-hmm.
[00:51:54] Burt Hanna: Um, we're committed to staying in Fayetteville, Arkansas, which means that we're committed to not selling and getting pe [00:52:00] private equity in here, venture capital, that kind of stuff.
Why is that? Oh, you know, that's the death of a business. They will come in, they'll borrow a lot of money against it, they'll stop investing in the factory and then, you know, 90% of these small businesses that sell to PE move from their location within 10 years and it's over with. Less than 10 years. And why do you wanna be in Fayetteville?
Oh, I love Fayetteville. Uh, I grew up here, this beautiful town. Uh, Fayetteville is very anti-business, but you know, Hannah's candle company and Hannah's Potpourri has probably hired thousands of people in the last 30 years here. Yeah. We get a lot of warm bodies in the fall because we have non-skilled work in a nice environment.
It's not, you know, uh, not hanging chickens on a cone. Sorry, Georges, you know, I mean, I'm friends with the Georges, but this is better than working in chicken factory.
[00:52:57] Cameron Clark: Mm.
[00:52:57] Burt Hanna: And you sit there and think, you know, my [00:53:00] question is, I asked my plant manager named Ralph Green, he's a good, he's great at managing these people in this plant.
They're happy and they like him for some reason, which I'm not sure why. He'll, he'll listen to that and hear me say that. But no, he's got a great relationship with people in the plant. His retention out there is incredible. I don't know how he does it, but he said to me the other day, which made a lot of sense, uh, he said, you know, this might be the nicest place they go all day long.
This is the safest place they may be in. Wow. I never thought of it that way. It's warm, nice break room. Yeah. Uh, they like the people they're not worried about getting yelled at or whatever. Yeah. So maybe that's why we have such good retention out in the factory. I never thought about it that way. So. Are you running day, day shift, and night shift?
Just day. Okay. Right now. And, uh, so the people, Fayetteville, Arkansas, even though, you know, we never really gotten anything, especially from the Fay, from Fayetteville, we don't ask for any of these government programs. We don't have any press conferences. When we moved in here, we didn't have a groundbreaking.
We wanna build that building. We don't have a groundbreaking, we don't care about that stuff. We just want to get in, do our [00:54:00] job. Nobody really know who we are. I and I, I felt I, I shouldn't even be giving this interview, but I don't anybody know. We're doing, we're glad. Yeah. I mean, what, nobody knowing what we're doing, but, uh, you know, business staying on its own two feet.
So we don't want any kind of government handout. It's good. And what I said about jobs, Fayetteville, Arkansas, not everybody can work at the university or whatever. People need jobs. Yeah. They need to start out and kids need to, people need to come in and learn how to be on time and be dependable and all that stuff, and then they can move on.
So, we'll, we have a revolving door of unskilled labor that comes and goes and there's no hard feelings when they get a better job. Go on. It's fine with us.
[00:54:42] Nick Beyer: Yeah. So talk bur about, um, your history. I mean, I, I'd say cyclical, maybe not cyclical, just, just based off economy, but like you could get a product cut and your business could go from up here to down here.
Exactly. That's exactly right. That's very unique to any of the founders that we've [00:55:00] interviewed.
[00:55:00] Burt Hanna: Really.
[00:55:01] Nick Beyer: Yeah. I mean, just, just heavy concentration.
[00:55:03] Burt Hanna: It is.
[00:55:04] Nick Beyer: How are you protected against that in the future? As you think forward
[00:55:08] Burt Hanna: you're not,
[00:55:09] Nick Beyer: and is there a way to do that?
[00:55:11] Burt Hanna: No. Okay. We don't think so. Okay. Yeah. Our business strategy is to be so good.
They have to buy from us in the United States. Mm-hmm. So good at the product, so good at the price, at everything. Good at the value, all of it. Okay. Managing the business be the best. That's right. We are not, so, we're not the best by any stretch, but we're, we need to, we can't change our customers. We can only change us.
[00:55:33] Nick Beyer: Mm-hmm. That's good. And, um, yeah, I guess as it relates to that, and I, I feel like I know the answer you're gonna give me based off of your concentration and your focus on being the best. But have you looked at the fragrance category? I assume, and this is an assumption, I don't know it half as good as you do have these, uh, you know.
Things you put on the back of your toilet that you send. Oh [00:56:00] yeah. All that stuff. The oils hurts.
[00:56:01] Burt Hanna: Those plugins really have hurt the
[00:56:03] Nick Beyer: candle business. And so for you, you, you're, you're not interested in that space as a, as a way to protect the long-term?
[00:56:10] Burt Hanna: No. You know, I used to be, but we're just not good at that.
So we're gonna stick to what we know.
[00:56:15] Cameron Clark: Yeah. We
[00:56:16] Burt Hanna: know how to buy wax. We know how to put the wick in it and size the wick and get the fragrance to burn. Right. There's a lot more to making a candle than you think. Making a good candle is a lot harder than you think. And, uh, we're just gonna stick with what we know and we don't really, the only reason why we care about growth is just for the people working
[00:56:31] Nick Beyer: for us.
Mm-hmm.
[00:56:32] Burt Hanna: You got to have a business's either growing or die. It's hard to have a, a business stay level and you gotta inspire the people. So we're growing, we grew, we're growing a lot this year, but, uh, but it is a highly si cyclical and very risky business. It's a lot like a farm.
[00:56:49] Nick Beyer: Yeah. Some farms
[00:56:50] Burt Hanna: have a great year, they have a good rain, and then some years they have a drought.
[00:56:54] Nick Beyer: Mm.
[00:56:55] Burt Hanna: And so our business philosophy is to, to have enough [00:57:00] financial wherewithal to make it through the droughts.
[00:57:02] Cameron Clark: Yeah. That's good. I like that.
[00:57:04] Burt Hanna: So talk, so I I, you know, you've been here for such a long time. What, what are maybe some of the other businesses that, that, that are, that coincide with Hannah's candles that you're involved in?
Or that, that, that, uh, I know you kind of like the warehouse space. You self performer, con construction, correct. Mm-hmm. And kind of learned that Yeah. Learned that with it. Right. Um, and then is there a Greenland composites? Yeah. What's that? I've a company in Greenland run by a great man named Tim Moore. He is been with me for 37 years.
Long, long time. Uh, he runs that company. We take recycled plastic and we extrude it. Okay. Like trax? Yep. There's a company in Springdale called A ERT. We, I got in the business 'cause A ERT was always talking about how they couldn't keep up. So I thought it'd be a good business to get into. And Tim's turned that into a good little business in Greenland and we recycle millions of pounds of plastic every year and [00:58:00] Wow.
And we make door parts for some of the major door companies in the comp country. Okay. And all outta northwest Arkansas here? Mm-hmm. Yeah, that's right. Yeah.
[00:58:09] Nick Beyer: So you take the plastic extrude, it means melt and filter it or what?
[00:58:14] Burt Hanna: You, you extrusions like pushing it through a dye, like a Play-Doh, ex Play-Doh machine.
Okay. It's got a screw, screws it through and heats it up, turns it into a, from a solid back into a semi-solid state and Okay. You form it into the shape you want it. So the door parts that we make are the bottom rail on exterior doors. You know, back in the old days the door used to rot out at the bottom and exterior door would, yeah, you'd see rust there.
We make a part that goes in the doors that keeps that from rusting. Okay.
[00:58:43] Nick Beyer: Okay. Okay. And did y'all choose that product specifically because you saw a market for it or? Well, I wanted
[00:58:48] Burt Hanna: to be in the decking business, but we couldn't give that stuff away, so we made decking and then there was a class action lawsuit against the company in Springdale and I said, you know what, let's get [00:59:00] out.
And then we concentrate on door parts and thank God we're still cranking along the door parts. Yeah. Yeah. And so, and, and so with, with, with Hannah's candles, what's, what's the next year, five year, 10 years? What's the, is there vision or direction for where you're. Trying to get to or with the goals or, yeah.
The really, the vision is for Thad and I to live to where 95. So that gives us another 30 years. And then compound interest that happens from 60 to 90 will be incredible. Yeah. Compound interest, not only in ability, but knowledge, market reach, all that stuff. Mm-hmm. And then if Jake wants to take over, he can, you know, he's doing a good job now, my son.
And, uh, that's really the, the long-term strategy.
[00:59:48] Nick Beyer: Mm-hmm.
[00:59:49] Burt Hanna: And, you know, really, if we do a good job, there'll be a candle company in Fayetteville, Arkansas, a hundred years from now, there's a candle company in Medano, Ohio called Root Candle. Been in business 150 years. Wow. [01:00:00] So, uh, it, we will have done our job if in, if your kids drive by and, um, there's a candle company in this factory in 50 years, that's what happened at Standard Register.
They're here for 60 years, but you know, they sold out and lost their KU and. You get a bunch of people that really aren't working and that's what kills a company when you get people that are living outta the company and not providing value. Yeah, it's easier said than done, especially when you go through different cycles.
Oh, I know. It's sometimes you wanna just throw the keys in. Yeah, that's right. Uh,
[01:00:35] Nick Beyer: yeah. Talk a little bit about that, Burt, I mean, how involved you still are with the business day to day.
[01:00:41] Burt Hanna: Uh, I only work till about five every day. Okay. Mm-hmm. I mean, I'm come in every day. Yeah. Well, we, uh, my wife and I, we take a vacation as much as we want.
We get to go. Beauty of my business too is I get to travel around the world and look at stuff. Yeah. So, you know, we're going to Paris to the Maison Gift [01:01:00] Show in January. Last year we went to, uh, the trade show in Germany, go to Europe a couple times a year to see trends mm-hmm. And stuff like that. And I come back and tell these.
People that work for me who are real talented how to, what I think is happening and mm-hmm. We got this super big candle going into Sam's this next year. I think they're having a meeting with Sam's right now about it. That's, I saw at the, a gift show in Barcelona Uhhuh this past year. It's really cool.
Big old, huge candles. So hopefully that'll be in Sam's this next year and Cool. If it's a good idea, it'll sell like gangbusters and it's a bad idea. We'll get charged back a lot. We'll lose the money, see what happens. That's right. So I, that's the great thing about business. Get to go travel to Europe a couple times a year and go see stuff and mm-hmm.
Going to New York a couple weeks from now, go visit a couple vendors. I went to a vendor in Pittsburgh last week, um, went to one in New Jersey two or three weeks ago, so I get to travel around a lot and see what's going on. Yeah. But for [01:02:00] people who are listening, it's like, you're very dialed in for what's going on here at Hannahs candles.
Try to be, yeah.
[01:02:06] Cameron Clark: Yeah.
[01:02:07] Burt Hanna: But I got a lot of good people who take care of the details. I just know the big picture stuff.
[01:02:12] Cameron Clark: Yeah.
[01:02:13] Burt Hanna: I mean they, they, I mean I got so many good people in this company. It's incredible.
[01:02:18] Nick Beyer: Hmm.
[01:02:19] Burt Hanna: I wonder why that, you know, it's just, I don't know how I got so many in our tenure here. It's like 16 years.
Wow. Average tenure, man,
[01:02:27] Nick Beyer: that's crazy. Crazy.
[01:02:28] Burt Hanna: Yeah. Um,
[01:02:30] Nick Beyer: especially in manufacturing. I mean that's that. I mean that you look at segments of the market across the US over the last probably 10 years, people who were in warehouses. I mean, it's hard to keep staff.
[01:02:41] Burt Hanna: Oh yeah, absolutely. It still is. But that Ralph and Rhonda, Rhonda Freeman's, my HR lady, that also is my CEO accountant.
CFO, whatever she is. I think my brother's really CFO. But anyway, Rhonda, she does a good job managing people. We use some temporary services that do a real good job managing their people. And [01:03:00] so we're lucky to be able to keep people. Yeah. Yeah. Well, last couple questions we ask every guest at the end of the PO podcast.
Uh, first one, uh, why build a business in northwest Arkansas? Well, I grew up here, so, and I had no desire to go anyplace else. I've lived, I've lived in California, I lived in Germany, I've lived in Missouri, I've lived in, um, that's probably about it. Uh, and I travel a lot, man. This is a great place. Yeah. So we need to preach the gospel of Arkansas and especially northwest Arkansas.
Man, this is a great place. And we're in America. We need to preach the gospel of the United States.
[01:03:40] Nick Beyer: Hmm.
[01:03:41] Burt Hanna: Yes, this is, we're very lucky to live in the United States where these opportunities are, but, you know, northwest Arkansas, and, you know, thankfully for the Waltons, Tom and Stewart putting in these bike trails.
Oh my gosh. It's crazy. It is nice. Yeah. So big shout out to them too. I don't know 'em, but [01:04:00] thanks for doing that. Gary Vernon, who's doing those bike trails for them, that guy that, that, it's amazing. They just continue to grow. I love 'em. I, I, yeah, I'm out there on, on those trails all the time. That rail, that rail park up in Roger, I can't goy that thing's great.
[01:04:14] Cameron Clark: Yeah,
[01:04:14] Burt Hanna: and I hadn't been to that stuff in Bentonville in a long time, but that's, you can get on bike trail here and go all the way to Bentonville. That's pretty incredible. And the bike lift that's coming in, I can't wait. That's come on about. Mm-hmm. Yeah. Yeah. I hope some sometime here next year you can't see in northwest Arkansas, you're not trying the right thing.
Right. Hmm. Well, and so last question, how do you define success? Oh, how do you define success? Oh, it's, it really, that's a good question. You know, like I stopped by on my way to work today and saw my grandkids. They came, stopped by to see me yesterday. That, you know, ha, having good in just having [01:05:00] good relationships, you know, longevity.
There's a study from Harvard. Longevity, longevity in that study is done for, I think it started in 1930s. Your relationship with people is one of the things that determines how long you live. Wow. More so than diet or exercise. You gotta have reason to live. Um, so success would be your, you know, your relationship with your Everybody really.
Yeah. I mean, wanna have good life. Uh, you know, I, like, I don't care much about showing off what I got, but I like to have cool stuff. Yeah. Stuff that goes fast and good relationships. Yeah. And, you know, do people, all the people work for me. I want them.
[01:05:44] Nick Beyer: No one hate me. Mm-hmm. Well, one of the things we do at the end of every episode, Bert, is kind of summarize what we, what we learn.
Cameron and I learn from you today, we think that people who listen to this are gonna learn. And that's the goal, is really to inspire entrepreneurship in northwest Arkansas. And so [01:06:00] I think the first word that I would use to describe you is committed. Um, I watched this with my dad. I've watched this with other people.
A lot of people we've had on the podcast be committed not selling to private equity. They're just not interested. And, and a lot of that comes from how much they care about this area, how much they care about their employees. And I'm not saying it's wrong to, to sell to private equity, but I, I just think it shows a level of commitment and intensity for, and appreciation for what you built and what you look forward to for it, for the future.
And I think when you, when you said, Hey, if there's a candle company when you drive down this road in 50 years, we did a good job. I think that's something that all of us can learn as we're building businesses and being in the business world, just. How to be committed to that, to that vision and helping this area grow in a healthy way.
So that's the first piece. I think the second piece is just being really, really focused, um, knowing what you do well, knowing the exact product that you do well and not focusing, and, [01:07:00] and especially when your company's growing and you're successful. Opportunities come from everywhere. And I'm sure you have opportunities to, you know, buy a, a DA, uh, what am I saying?
The aroma company or something like that. Yeah. Like, I'm sure there's tons of those opportunities that exist, but you, you have s stayed very focused on, hey. We make these candles really well and we're gonna figure out how five years from now we can make 'em even better and 10 years from now make 'em even better.
Yeah. Even with Greenland composites, you said, we're focused on door parts. That's what we make. Mm-hmm. And uh, I think there's just a level of focus as we're talking with you that we can all learn from and integrate into our own businesses and things like that. And then I think the last piece, I think that the clearest piece about you, Bert, as an entrepreneur is your ability to figure it out.
And you started at the beginning figuring it out, didn't have a degree, didn't have a ton of money saved up. You just figured it out. You walked into the [01:08:00] World Trade Center and you figured it out. And the story about 190 thou, 189,000 units at Walmart. You flew all across the globe to find a machine, couldn't find it.
Went through a phone book, found someone in Fort Smith. To figure out how to make the machine in four weeks like that captures this story. And I think if there's nothing, no one hears anything but this. It's if you are growing a business, if you're working in a business, if you're, uh, starting a business, if you wanna start a business, you've got to learn to just figure things out.
Yeah.
[01:08:34] Burt Hanna: Yeah.
[01:08:35] Nick Beyer: Well, thanks. Thanks for coming on. And You bet.
[01:08:37] Burt Hanna: Thank you for listening to this episode of NWA Founders, where we sit down with founders, owners and builders driving growth here in northwest Arkansas. For recommendations are to connect with us, reach out at nwa, founders@gmail.com. Lastly, if you enjoyed this episode, then please consider leaving a rating, a review, and sending it to someone who you think would benefit from it.
We'll see you in the next [01:09:00] episode.