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Start for freeIn April 2024, JD Hassley took a leap of faith by leaving his career in finance to purchase a small frame shop in Dallas, Texas. One year later, he has transformed the business, growing revenue by 50% and creating a semi-passive income stream. In this article, we'll explore JD's journey from finance to framing and the lessons he learned along the way.
The Path to Entrepreneurship
JD's entrepreneurial journey began long before he purchased the frame shop. As a teenager, he shadowed a family member who had bought and grown a printer copier sales company. This experience sparked his interest in business ownership and set him on a path to study finance at the University of Texas at Austin.
After graduation, JD worked in commercial real estate lending, eventually landing at a private credit shop called Crestline Investors. It was here that he gained exposure to small, local businesses and their owners, which further fueled his desire to become an entrepreneur.
Finding the Right Opportunity
When JD decided to search for a business to buy, he had several criteria in mind:
- Cash flow that could replace his base salary (around $130,000 to $150,000)
- A simple business with a good reputation
- An excellent location if it was a retail business
- The ability to capitalize on the purchase and secure SBA financing
- Proof of staying power through economic downturns
After searching through various listings, JD found a frame shop that met his criteria. The business had been operating for 20 years and had weathered both the Great Financial Crisis and the COVID-19 pandemic.
The Acquisition
JD purchased the frame shop in April 2024 for $645,000, which represented a multiple of about 2.6x the seller's discretionary earnings (SDE). He secured an SBA loan for $600,000 and invested about $120,000 in equity, including closing costs and initial investments in the business.
The acquisition process was relatively straightforward, with the main challenge being the training period. Since JD and his brother (a minority investor) had no framing experience, they negotiated a six-week training period with the previous owner's son, who had been managing the shop.
Growing the Business
In the first year of ownership, JD implemented several strategies to grow the business:
1. Improving Online Presence
JD invested in a new website, search engine optimization (SEO), and Google Ads. These efforts have significantly increased the shop's online visibility and lead generation.
2. Enhancing Customer Service
The team focused on providing exceptional customer service, including quick response times to inquiries and a "say yes first" mentality to taking on challenging projects.
3. Expanding B2B Relationships
JD recognized the potential for growth in the commercial sector, particularly with interior designers, artists, and galleries. He's working to increase the B2B portion of the business from about 20% to 30-35% of total revenue.
4. Streamlining Operations
The team has developed standard operating procedures (SOPs) for different types of framing projects, which has improved efficiency and consistency.
5. Offering Additional Services
JD is exploring the possibility of adding installation services to create a one-stop-shop for designers and their clients.
Results and Future Plans
One year after the acquisition, the frame shop's revenue has grown from about $900,000 to nearly $1.1 million annually. JD has been able to step back from day-to-day operations, spending only 5-10 hours per week on the business.
The investment has proven to be highly profitable, with JD reporting a levered cash-on-cash return of over 120% in the first year, even after paying himself a salary.
Looking ahead, JD is considering several options for growth:
- Organic expansion of the current business
- Adding complementary services like art installation
- Potentially acquiring other frame shops or related businesses
Key Takeaways for Aspiring Entrepreneurs
JD's success story offers several valuable lessons for those considering buying a small business:
1. Look for Overlooked Industries
Framing may not be a glamorous or high-tech industry, but it has proven to be a stable and profitable business with growth potential.
2. Focus on Location and Demographics
The frame shop's success is partly due to its location in an affluent area with a high demand for custom framing services.
3. Invest in Your Team
JD attributes much of his success to his employees. By treating them well and giving them ownership over their roles, he's created a motivated and effective team.
4. Embrace Technology and Marketing
Even in a traditional industry like framing, investing in digital marketing and streamlining operations can lead to significant growth.
5. Balance Work and Life
One of the benefits of business ownership for JD has been the flexibility to spend more time with his family, including his newborn son.
Conclusion
JD Hassley's journey from finance to framing demonstrates that with the right approach, even a small, traditional business can be transformed into a thriving enterprise. By focusing on customer service, embracing technology, and empowering his team, JD has not only created a successful business but also achieved the work-life balance he desired.
For those considering a similar path, JD's story serves as an inspiration and a roadmap for finding success in unexpected places. Whether you're looking to leave the corporate world or simply invest in a small business, the key is to find an opportunity that aligns with your skills, interests, and lifestyle goals.
As JD's experience shows, with careful planning, hard work, and a willingness to learn, it's possible to turn a small business acquisition into a life-changing opportunity.
Article created from: https://www.youtube.com/watch?v=ERk8r_21sG0
