The Nightmare of Buying too Small of a Business | JD Klein Interview
Open on YouTube ↗JD Klein, a 20-year corporate technology veteran (Microsoft, AT&T, startups), bought a struggling Minuteman Press franchise in Redmond, WA for $100k in late 2013 after being introduced to the concept by a broker who showed him multi-million dollar operators building real wealth through printing. The business was doing $175k in revenue at acquisition — far too small, as JD later reflects. Despite impressive organic growth (doubling revenue in year one, reaching ~$900k by 2019 through wide-format equipment investment and strong customer service), the absolute take-home was never sufficient to support a family of five in the Seattle metro area, and the family endured severe financial stress including selling their home in 2014. Additional setbacks included an 18-month city construction project that devastated foot traffic, a failed acquisition attempt, a COVID-related buyer withdrawal, and ongoing key-employee losses. JD finally sold in January 2021 for over $400k after a buyer resurfaced post-PPP. The episode is a candid cautionary tale about buying too small — the central lesson being that below $1M revenue in services, margins rarely produce enough cash to support an owner's livelihood, and the cheaper the acquisition price, the more the business depends entirely on the owner.
Deal facts
- purchase price
- $100k
- revenue
- $175k at acquisition (grew to ~$800k+ by exit)
- financing structure
- ~$33k cash equity + ~$67k seller note (amortized over 2 years)
- notes
- Sold in early 2021 for over $400k (including vehicles). Minuteman Press franchise in Redmond, WA. Acquired late 2013, sold January 2021 (~7 years). Peak revenue approaching $900k in 2019. No SBA loan used on acquisition.
Why this business
A business broker introduced him to Minuteman Press and showed him a blueprint of multi-million dollar operators building wealth through printing services and real estate. He saw it as a platform for entrepreneurship, leveraging his community ties in Redmond (Microsoft network, little league, wife's real estate network) and his corporate sales background. He wanted to test his entrepreneurial instincts after 20+ years in corporate technology.
What's working
- Doubled revenue in first year (from $175k to $350k) and continued strong organic growth through 2019, reaching nearly $900k
- Investment in wide-format printing equipment (vehicle wraps, window graphics, banners, apparel) increased average ticket from ~$200 to ~$380 and differentiated the business from commodity competitors
- Built a strong team culture emphasizing customer service; high employee retention through explicit 1-year commitment agreements with staff
- Launched 'Hi Redmond' shop-local campaign during city construction that built goodwill and brand presence
- Pivoted quickly to COVID return-to-work graphics in April 2020 (floor dots, distancing signs, laminated menus), limiting revenue decline to ~15% year-over-year
- Ran the business at 15-22% net margin, far above the printing industry average of 1-3%
- Won a franchise territory dispute and gradually captured the competitor's customers through superior service
What's hard
- Bought too small a business — at $175k revenue, 10-20% margins meant take-home pay was never enough to support a family of five in the Seattle area
- Had no financial planner going in; projected family P&L was too optimistic and relied on wife's real estate income that did not materialize in 2014
- Sold their home at end of 2014 to stay afloat — lost a beautiful property and moved into a rental, deeply affecting the entire family
- City of Redmond construction project lasted 18 months and cut downtown traffic 70%, suppressing foot traffic and new customer discovery
- Losing developed employees was emotionally devastating and operationally disruptive; a key lead designer/assistant manager left with no notice right as the 2020 sale was progressing
- Lost a promising acquisition of a retiring local printer at the last minute to an out-of-territory franchisee who concealed the purchase
- Cash-poor and unable to borrow once self-employed; could not access credit lines they should have established before leaving W-2 employment
- Revenue grew but the absolute dollar take-home (15-18% of $600-800k) was still barely livable in Seattle given healthcare costs (~$20k/year) and no employer benefits
- COVID in early 2020 caused a buyer to pull out of the first sale attempt just as the business was on track to organically hit $1M
- Franchise royalties and marketing fees (8-10% of revenue) represent a significant fixed cost drag at lower revenue levels
Notable quotes
I call like sub million dollar for any small business the death zone especially in a Services business and if you can buy into something that is at or above a million dollars look at most of these businesses will net 15 maybe 20 if you're really operating at a high level right and so just do the math on especially what it costs to live in the Seattle area.
I got from making you know two three hundred thousand a year in corporate technology so now I'm digging change out of my ashtray to pay for gas.
Burned the boats we're all in I mean it's yeah and at that time again like once we had sold the house right and committed to this austere lifestyle um you know it's you're in here.
Don't get your heavenly scorecard mixed up with your business scorecard.
We will never make up the millions that we've lost in this business between not being real estate owners selling what we had stock from you know income um I will catch up eventually and get ourselves a better place for retirement but um yeah like you know the financial piece um I don't look back and say entrepreneurship and buying a business was a mistake.