Jabs: An all-American entrepreneur

Finding the need and filling it has been the foundation of Jake Jabs’ career. He began his entrepreneurial journey by purchasing a small guitar studio is Bozeman, Mont. It made sense: Jabs loved to play guitar – he used to play for Marty Robbins in Nashville – and Bozeman lacked a music store with good guitars.

When Jabs sees an opportunity, he exemplifies the spirit of “Carpe diem.” Twice, recessions have been the catalyst for his ventures – first in buying a struggling music store, then in buying a defunct furniture company. Today, Jake Jabs is the sole equity owner of American Furniture Warehouse, the largest furniture retailer in Colorado, which he founded in 1975. AFW has more than 1,300 employees and over $300 million in annual revenue.

I had the opportunity to sit down with Jabs for my book “50 Interviews: Entrepreneurs Thriving in Uncertain Times.” This is a portion of that interview.

Q: What was your initial startup cost and source?

A: $80,000 I had saved. I bought the defunct American Furniture Co. They had over $1 million in assets on the books and wanted to get whatever they could for the old assets.

Q: How long until there was a positive cash flow?

A: Two months.

Q: Did you use a business plan?

A: No.

Q: What was the genesis of the idea?

A: In 1974-75, Colorado was in the middle of a big recession. Lots of furniture stores went out of business and it looked like a great opportunity to get into a major market like Denver with a small investment.

Q: What was the vision of the company and the community you serve?

A: My vision was to sell furniture for less than anybody. We provide an opportunity for the community to buy furniture at a reasonable price and people love us because of that.

Q: What were your biggest challenges? Looking back now, is there anything you wish you had done differently?

A: I have no regrets in life and wouldn’t change a thing.

Q: What have been your biggest rewards?

A: Having the ability to contribute to charities I believe in. I enjoy the opportunity to speak to high school and college students, as well as business groups.

Q: Are there one or two things you can attribute your success to?

A: Timing was key, buying a defunct company at the end of a recession when business started to pick up. Plain old-fashioned hard work has been a vital key to our success. Being honest and up front with the customer has always been our core value, conveying the fact that furniture is not a perfect item. Although nothing is more costly than returns, I’d rather have the furniture back than an unhappy customer.

Back in the ’80s, we were really struggling, and on the brink of closing. But I worked hard to maintain impeccable credit and since I always treated suppliers as partners, they stood behind me during those difficult financial times. They would often give us a lower price than anyone else, even our competitors who were purchasing higher volume.

What differentiates us and our competitors is that we rarely return damaged furniture to the supplier. Instead, we have a full time staff doing repairs, just as the supplier would have in their own factories, but doing it in our stores allows us to save time and shipping costs.

Q: What is the most important attribute you look for in an employee?

A: We pay better than the other furniture stores and I give them freedom and responsibility to do their job. I spend an entire day with new employees. Doing so allows us to maintain a culture key to our success, to under-promise, over-deliver, and above all else, be honest with the customer. I also always try to first promote from within instead of hiring from outside.

Q: Any recommended training and resources? Do you recommend an MBA?

A: No on the MBA. I use my own book, An American Tiger, as a training tool for our employees.

Q: What would it say on your tombstone?

A: If you like what you are doing, you may never have to work a day in your life.

Brian Schwartz is the founder of 50 Interviews Inc., and can be reached at www.50interviews.com.

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