Hobby Lobby founder: Dream ‘of where you’re going or you won’t get there’
11/09/2012 6:30 AM
11/09/2012 6:30 AM
Hobby Lobby founder and CEO David Green told a nearly packed lecture hall at Wichita State University on Thursday afternoon that a love for the retail business and a vision to grow his company explain, in part, how the arts and crafts retailer got to where it is today.
Green was in town for the last of WSU’s fall Entrepreneurship Forum Series.
In a question-and-answer format, Green told the audience of students, faculty and business people that his Oklahoma City-based company has more than 500 stores across the country, employs more than 20,000 people, and has annual sales of $3 billion.
He started the business in 1972, making miniature picture frames in his garage with an investment of $600 – $450 of which went to buy the machine to make the frames.
When asked by an audience member if he envisioned creating the kind of business Hobby Lobby is today, he confidently answered yes.
“I think you have to dream of where you’re going or you won’t get there,” Green said.
Green, who was born in Emporia, said his roots in retailing go back to when he started working at a five-and-dime store when he was in high school.
“I just latched on to it,” he said of retailing. “I knew that it’s what I wanted to do.”
Green also said his faith plays a central role in everything he and his family do in the business world, and that includes how stock in the privately held Hobby Lobby is handled. He said neither he nor his children can cash out of the business.
“We can’t touch it,” he said of the company’s stock, adding that if the company was sold, 10 percent of the proceeds would go to an education and health trust fund for his family and the other 90 percent would go to a trust fund set up for Christian ministry.
“It’s a very, very understandable, clear structure,” said Green, whose father was a minister. “It’s a business owned by God that our family happens to run.”
That philosophy is reflected in Hobby Lobby’s hours: Stores are closed on Sunday. And Green said his stores don’t stay open past 8 p.m. because he wants his employees to be able to tuck their children into bed, something he said he couldn’t do when he was working in retail before launching Hobby Lobby. He said the company’s minimum wage is $13, compared with the federal mandatory minimum of $7.25 an hour.
“We really want to care about our people,” Green said. “We have an incredible team at our corporate offices, just incredible people that serve our company.”
He said he thinks the company has been successful for several reasons. One is that the company focuses on the long term, not the short term. It also does not carry long-term debt. It has only one warehouse to supply its stores, which stretch from coast to coast. And it owns the trucks and employs the drivers who deliver the merchandise to those stores.
Store inventory and replenishment is controlled by 10 department managers in each of its stores, not by a computer system tied to its cash registers, he said.
Green told students that he thinks the key to starting and growing a business is to have a passion for what they are doing and, once they begin to make money, to put as much as they earn back into the business.
“You need to feed the business,” he said.