Customer Wise: A picture of perseverance
Dave Hanson is a model of perseverance and small business savvy. Currently one of our business banking clients, he got into the bicycle business in 1976, when he was a high school sophomore. Ten years later, Dave and his wife Liz won the TV game show “The Newlywed Game,” sold their prize for cash, and bought a first home in Southern California. Determined to own his business, Dave borrowed against his home to buy a bike store, which has now grown to eight locations.
As you’ll see in the Q&A below, great vendor relations, smart use of capital, and investments in real estate are a few of the things that have contributed to the success of his business, Jax Bicycle Center.Q: What’s been the key to your growth? A: Hard work and perseverance. The one word in our house that sits under a picture of President Lincoln is “perseverance”: One of his kids died young, his wife was cuckoo, and he lost multiple elections before — bam! — he’s president.
Because we worked hard, and our vendors know we work hard, they wanted to team up with us. And we wanted to team up with them. The best example has been Trek, who’s been a great partner through the toughest of times. Trek continues to work with us on favorable terms and programs to help Jax succeed.
The growth has come from having great vendor relationships, perseverance, working hard, and taking chances.Talk about taking risks, and how do you know when a risk is too big to take?
I don’t know if I’ve ever come across a risk yet that’s too big to take. Sometimes people say I’m lucky. I define “luck” as when opportunity meets preparation. For example, the opportunity to own a store might not have been available when I was working as a manager, but I worked hard every day, learning how to buy, how to make clients happy, how to balance my register at night, even how to clean the toilets. Then, there’s a store in La Habra for sale.
I remember coming home and telling my wife, “Liz, I want to borrow against our house, which will raise our mortgage; I want to cash in my 401(k) and quit my current job; and I want to go buy this bicycle store that’s underperforming, because I know I can do it.”
Any one of those things by themselves could be a deal killer, but I did them all. Calculated risk? I think most of the time I just knew I could do it and was going to persevere.What has business taught you about hiring good people?
One of my favorites is Jack Welch, former CEO, president and chairman of General Electric. In his book called “Jack,” he says, “Everyone you meet is an interview.” I love that.
My son just interviewed our food delivery kid for a sales position on our bicycle company because he’s just so friendly and always remembers our names. We can take somebody who’s a wonderful person, and we can help him or her become great at selling and/or servicing bicycles. I can’t take a bicycle person who’s a creep and make him a nice person. It’s too late; his mom should’ve done that. Everybody I meet is an interview. We’re looking for great people; we can make them great bike people through our training.What has business taught you that you wish you had known when you started?
I wish I had known how to establish affordable capital. That would be a biggie. When you’re young and new, no one wants to give that to you. You’re a risk. What I would’ve liked to have had was a better cash base. We had less than zero cash base.What have you done to obtain affordable capital?
We have been very fortunate with the real estate moves that we had. We now have eight stores, and we own three of the buildings. Not outright; we’re making payments on the buildings. We’ve used the cash flow of our business to secure SBA loans. We’re on our third SBA loan now. The other two we paid back. Property and cash flow have helped generate our ability to borrow, to expand.