American Dream Achieved

IBA, as an approximately fifty-year old business brokerage firm serving the entrepreneurial community of the Pacific Northwest, has been uniquely positioned since before the American Bicentennial celebration of 1976 to witness and hear the stories of thousands of people who have lived the American dream through entrepreneurship creating beloved businesses by employees, customers, and communities while finding personal fulfillment and financial prosperity through execution of their ideas, hard work, perseverance, and ability.  In an effort to share these stories heard throughout the years by our team of business brokers, who are commonly regarded as the “best listeners” in the M&A industry, IBA has retained highly regarded writer, Nesha Ruther, to tell their stories.  It is our goal to share one story a month. It is our hope that you will find the stories as inspirational and motivational as they are to us and the buyers who bought the businesses in IBA facilitated transactions in Washington, Oregon, and Alaska.

The Story of Jim Butler (Rush Team Apparel & Tacoma Sign Company)

By Nesha Ruther

Lesson #1:  Failure IS an Option!

When Jim Butler was in his early 20s, he would spend the summer visiting the house of a family friend, Mr. Scott, who lived on Lake Washington. Jim was still green behind the ears, having just started his first company with his father. “[Mr. Scott] had an open invitation on any hot day that we could go swimming there,” Jim says. “He would yell down from the deck, and he’d say, ‘Hey Jim, have you failed yet?’ and I would say, ‘No, Mr. Scott, I’m still in business.’ He says, ‘Well, you will (FAIL)!’ I look back on those conversations, and Mr. Scott was right.”

Jim sees Mr. Scott’s comment not as a personal insult, but as a universal truth about business, everyone will fail at some point. “I had read that most guys fail three or four times before they make it, so I completely understood where he was coming from. When he would yell that down I would just smile a bit.”

Mr. Scott was right, and Jim did encounter business failures, yet each of these failures taught him an important lesson that contributed to the success he has today. All entrepreneurs can benefit from Mr. Scott’s wisdom: failure is not a humiliation to be avoided, but an inevitability to be embraced as a step to greater success.

Background of an Entrepreneur

Much of Jim Butler’s career trajectory was shaped by memories of his parents’ financial struggles. The youngest of four children, Jim’s parents moved to the United States from Toronto in 1959. His childhood was a conventional middle-class upbringing, but into his adolescence, Jim’s father began to experience some tough times financially. “As the youngest of four, I was around to see all that unfold. That impacted a lot of my goals and aspirations. When there’s not enough money to fix the car or the oven, those are things you remember as a kid,” Jim says.

The lack of autonomy and control Jim’s family faced when it came to money made the idea of owning his own business appealing. “I don’t know if I had looked around and seen a bunch of really successful small businesspeople,” he says. “I think it has more to do with controlling one’s destiny.”

In college at Seattle Pacific University, Jim pursued a degree in management with an emphasis on entrepreneurship. After graduating, he took a job working for a small printing company. In 1987, he and his father decided to open their own printing business. They called it Jaguar Press

Jim’s father was an unobtrusive business partner; he supported Jim and his ideas while still giving him the room to run the business according to his own wishes. “I appreciate that I was probably very difficult to work with,” Jim says with a laugh, “but Dad just let me go. He was the silent partner and let me do the work.”

After five years, Jim and his dad sold Jaguar Press to another printing company. The business was marginally profitable, and the pair were losing money more often than not. Selling the business was a good option. Thankfully, the pair found a buyer, but the whole ordeal taught Jim a valuable lesson.

Lesson #2:  Work from Solid Financials!

A consultant told Jim that most small businesses have very little knowledge of where they stand financially. Some businesses being “dead men walking” without even realizing it. “They are unaware of the extent of their financial challenge. There is a neurosis that sets in when a business reaches this point, they feel like next job is going to bail them out, or the next capital infusion will immediately right the ship,” Jim says.

Many business owners in this situation think that selling the business will be their saving grace, “They think that selling the business they built is the best way to jump off a sinking ship,” Jim says. “Truthfully, it is difficult to sell a business that is losing money. I’ve been there.”

As part of the sale, Jim signed a non-compete agreement, when it expired, Jim got back into the entrepreneurial game and in 1994, started a company called Discover It! which focused on science education. Jim invested $60,000 of his own money into the business, but it never took off. While that experience was challenging at the time, it too taught him something critical.

Lesson #3:   Find a Great Production Manager

Jim took on a production management role at Discover It! but he hated it and struggled to balance the variety of responsibilities the position entailed. “Production management is critical,” he says, “Every entrepreneur needs that one person who can help the company deliver on their product/service scenario. The manager likely has a lot to do with controlling production costs, labor, and meeting customer expectations.” Jim was not meant to be that person; it was like fitting a square peg in a circular hole.

After closing Discover It! Jim decided to reevaluate and focus on an industry he knew to be successful: printing. In 1996 he opened another printing company and named his new company JB Graphix.

Lesson #4:  Evenly Distributed Client Base Reduces Risk

Jim decided that in order to ensure the success of his business, he was going to focus on securing many high-margin clients, rather than a few large clients. “It is tempting and sexy to land that big fish customer,” he says. One such customer was so large they boosted JB Graphix revenue by 40%. Business was great, until suddenly, that same customer abruptly stopped paying. “We lost $125,000 the day we learned that they filed for bankruptcy,” Jim says.

While relying on one or two large clients is easier than the constant hustle, it makes the company vulnerable. “I regret not committing more money to sales and marketing and creating a marketing model that consistently generates new clients. A large base of customers is critical–with revenue easily distributed, it’s the best way to build a business.”

While JB Graphix went out of business, Jim’s knowledge of ink-on-paper printing grew to include apparel printing and sports merchandising, and he started a company called Rush Team Apparel that supplied State championship athletic apparel for Washington, and eventually Oregon. Rush Team Apparel was extremely successful and is still in business today. It is currently run by Jim’s nephew.

Jim’s success prompted him to consider scaling his business through acquisitions. It was in this moment that value in Jim’s failures revealed themselves. He reached out to Gregory Kovksy and IBA, asking for help brokering a sale. In 2003, Jim purchased a company called Documart.

Lesson #5:  Growth through Business Acquisition

“It sounds like a good idea,” Jim says of acquiring a company “Let’s buy that guy’s business and all in one swoop we’ll get their customers, their people, and we’ll get rid of a pesky competitor. However, there are some things to consider.”

Firstly, the pricing structure of the acquisition must be similar to that of the buyer’s company. If someone buys a company that has much lower prices and expects their clientele to seamlessly transition to paying more, they will be in for a rude awakening.

Secondly, it is important to consider personnel make-up. In moments of change and transition, employees tend to revert to a “What’s in it for me? mindset.” Some may outright resist all changes the new leadership tries make. This is especially common among employees who have been in their current position for a long time.

Lastly, involves the role of the previous owner. Are they staying on with the business in a new position, or leaving? If the former, the previous owner can either be the biggest advocate for the changes new management is making, or they can be incredibly divisive and sow discontent among the staff. “I have seen it unfold both ways,” Jim says.

Acquisition proved an incredibly lucrative route for Jim. Businesses tend to acquire companies that are about 30%- 50% of their revenue. Therefore, if a business is doing one million in sales, the target acquisition would be likely in the $300,000 – $500,000 gross revenue range.  “Merging or buying a business is an excellent route to pursue.  We have used IBA and Gregory does an excellent job in understanding where the synergies come together.”

Jim’s previous failures lent him a keen eye in identifying businesses that could prove lucrative, and ones that were too dysfunctional to be worth the purchase.  His time at Jaguar Press taught him the importance of having a complete understanding of a businesses’ financial position, Discover It! taught him to pay attention to the role of Production Manager and whether they are well-suited for the job, and JB Graphix taught Jim to look for businesses that had a wide range of clientele.

Having run his own businesses for so long, Jim is familiar with all the different areas of knowledge one must accumulate to make a company successful. “There are plenty of elements in everyday life that you are underqualified for, and other tasks that you are way overqualified for,” he says. “You do them because that is what needs to get done to make it all come together.”

As rewarding as entrepreneurship is, it is rarely easy. Jim recognizes the creativity needed to find ways to generate revenue in a competitive market. “Sometimes I felt like I was a jack of all trades, not necessarily super strong in any one area,” he says. “What I enjoy is bringing the different elements together that allow something to get launched. That was true of the printing company, the sports apparel business, and the science business.”

Lesson #6:  Love Your Employees – People are the Key

Printing in particular is a very deadline-driven industry. When an employee quit at an inopportune moment, the whole business was thrown into jeopardy. It takes time to hire and train new talent. A replacement is not waiting in the wings ready to complete the job. “When you have a printing project that is slated to run, and the employee sends you a message the night before saying that they’re quitting and there’s virtually no notice, those are the times where you feel like it’s more of a ‘screw you’ quitting as opposed to something that just happens in the course of business,” Jim says.

While it was difficult to not take such moments personally, Jim tried to use them as opportunities for self-reflection and to identify how he could be a better leader. “It all comes down to leadership,” he says. “When things go wrong with [employees], you look in the mirror and say, ‘What am I doing that’s creating the challenge with keeping consistent, cohesive staff?’”

Jim took the opportunity to grow and brought in a consultant who had spoken to employees at printing companies across the country. He learned that many employees, particularly at family-run businesses, felt the owners did not care about them as individuals. “One of the problems with small companies is that the owner doesn’t come in and say hello to the employees, doesn’t ask them how they are doing,” Jim says. “[The owner] will come in and walk straight to his office and get to work. At the time, I was not real fond of saying hello to every employee.”

While many people struggle with leadership, not all can admit when something is not working, and a different approach needs to be taken. “I learned that you need to do a good job of loving every employee and understanding where they’re at in life. You have to try to help them accomplish their goals through knowing how their job fits into their personal life. I hate to say it, but I was probably slow to jump on that bandwagon.”

Jim wants others to learn from his mistakes and realize that small business owners need to take a more active role in the lives and careers of their staff. “These days with the younger generation coming up, we need to jump on that bandwagon because our industry is not nearly as sexy as some of the industries they would prefer to migrate towards. You have to meet them at a different spot in order to keep them around,” he says.

Lesson # 7:  A Multi-Generational Workforce Needs to be Openly Addressed

Jim recognizes the generational differences when it comes to how people approach work. For Jim’s generation that came of age in the ’80s, there was a strong sense of putting your head down and working away at something over time. Millennials on the other hand, who entered the workforce during the Great Recession of 2008, often feel a greater sense of urgency in their relationship to work. “There were some things about millennials that we had to learn,” he says. “They like to operate on their own, when you ask them to do something, they want to understand why, they want a greater purpose within their work. They’re quick studies and tend to get bored with coming up through the ranks, they don’t necessarily see the value in doing a repetitive task for a year or two.”

While no generation is entirely homogenous, Jim finds this attitude prominent among those who have had relatively comfortable upbringings and saw work as an extracurricular rather than a fiscal necessity. “I like the kids who had to find their own source of income because they had to buy a car and pay for school; I think they have a stronger grit about them. Those are the employees I move towards these days.”

Lesson #8:  The Business is ALWAYS on One’s Mind

Being responsible for every facet of the business meant that even when Jim was not technically working, he was always thinking about work. “The types of questions that run through my mind in the shower are: are we going to get this job coming in? Is there going to be enough work to keep the workers busy for 8 hours? For the jobs we do have, are we going to get it out the door in a satisfactory way for the client? Are we going to have enough money to meet payroll?”

Lesson #9:  Tread Carefully with Partnerships

To help balance the stress of management, Jim has maintained many partnerships through the years. The partner relationship can be a fragile one however, and a bad partnership can cause even more stress. “’Being a minority partner is like falling of a horse, but with one foot in the stirrup and being drug through the mud!’ I still remember Lou Nichols telling me that when I was a 20-year-old ambitious young man, working at Glendale Country Club,” Jim says.

“Some have worked and been very rewarding, some have been exactly like what Lou described. Make no mistake, partnership is a marriage- there is no way around it. There are emotions, money issues, philosophical discussions, and disagreements. Risk tolerance comes into play, there are issues with dominant personalities, capital contribution issues, and politics between the employees. And then there is success and the evolutions and transformations that sometimes come with success. My mother told me to marry someone with the same values – and I think the same is true of partnerships.”

Jim advises that for anyone in a business partnership, success relies on communication and constantly revisiting expectations and common values to ensure both sides are on the same team.

In 2018, Jim reached out to Gregory once again and purchased Printing & Office Supply. “Gregory does a good job of figuring out what is needed to get a business ready for sale,” he says. “He does a good job of putting the strength of the business forward and planting a vision for where the business can go. He understands his seller and can interface with the buyer in ways that come to a successful middle ground.”

When looking to purchase a business, Jim recommends thinking about the skillset needed to run it; “Each owner will bring a skill set that makes the business tick,” he says. “The prospective buyer has to ask whether to not they can replicate that skillset, through themselves or another employee.”

All entrepreneurs have a natural inclination towards one facet of the business, for Jim it was sales. If he is purchasing a business whose previous owner was more inclined towards production, Jim needs to know he has staff on hand who can fill that gap.

Jim currently owns a piece of Rush Team Apparel and is a partner in a real estate business. In 2020, he started another company, Tacoma Sign Co.

Running multiple businesses taught Jim how to balance different obligations and responsibilities. This has allowed him to grow and expand his business even with limited resources. For example, right now Tacoma Sign Co. is scaling to increase production for vehicle graphics. Jim now must not only keep the rest of the business running smoothly but identify a space they can rent out, and secure all the necessary equipment, materials, and staff. “These are the things I like to do,” Jim says, “And I think I’m good at picking up on the resources that are available [to me]. Not only from a personnel standpoint but a knowledge and equipment standpoint to get the service up and running.”

Lesson #10:  Undercapitalization Forces Efficiency

Jim started all his businesses with a minimal amount of cash, which meant that he had to be very precise in terms of where money was invested and allocated. “It would be nice if I was Bill Gates and there was a bunch of money, or if I had gone the route of venture capital, but that wasn’t a resource that was ever available through all of my different businesses.” Jim prides himself, however, on only securing funding through banks, so that he never has to sacrifice equity or ownership of the business. While this meant that funding was limited in the early years of a business, at the end of the day it was always his business.

Jim encourages new entrepreneurs to not be so focused on day-to-day fiscal obligations that they miss long-term opportunities for growth. “There’s good and bad [aspects] to being under-capitalized. The bad is that sometimes you’ll make decisions on limited resources that may not allow you to reach the upside, later down the road,” he says. On the other hand, however, lean times taught Jim to be highly resourceful with what he had and think outside the box in terms of generating revenue. “We’ve always been very, very careful with our expenditures, and I appreciate that I was able to get my businesses up and running from the bootstraps.”

As much as Jim learned from being in the younger, hungrier stage of business where money was tight, he is happy to have reached a place where he can take on more passive leadership, and let his businesses run themselves. At some point, the overall management of Tacoma Sign Co. will transition over to his son-in-law, so Jim can focus solely on what he really enjoys, which is sales.

For Jim, the American Dream is one of trial-and-error; having the ability to fail, fail, and fail again, while still learning from those lessons to use and find success. “I think it comes down to freedom, and a government structure that gives us the freedom to pursue our dreams,” he says.

While Jim was always ambitious, he never imagined having access to the financial freedom he has gained throughout his lifetime. He appreciates that in the U.S.A., those that can commit to working hard will likely have an excellent chance of financial success and changing financial platitudes.

“My father said you learn more from a bad situation than from a good one,” Jim says. Mr. Scott was right those days at the lake house, and while Jim did fail, each failure opened the door to unimaginable success.

Nesha Ruther

Nesha Ruther is a writer and editor from Takoma Park, Maryland. She received her BA in English Creative Writing from the University of Wisconsin Madison, where she received a full tuition scholarship through the First Wave program based on academic and creative merits. She was a 2016 Young Arts winner in spoken word, a 2016 winner of the DC Commission of the Arts Larry Neal Writing Award, a 2017 winner of the Mochila Review Writing Award, which was judged by Nikki Giovanni, a 2020 winner of the University of Wisconsin’s Eudora Welty Fiction Thesis Award, and a 2022 Tin House Winter Workshop Participant. She has been commissioned to write and perform for the National Education Association, and has had work published in NarrativeNortheast, Angles Literary Magazine, Beltway Quarterly and more. She currently lives in Cincinnati Ohio and is the Lead Manuscript Developer at Holon Publishing and Collective Press.