Sarasota's Jim Abrams 'accidental entrepreneur'
Story by Chris Wille
BUSINESSMAN BUILDS A WEALTH OF SUCCESSFUL FRANCHISE OPERATIONS
Aug 27, 2018, SARASOTA — Jim Abrams is supposedly retiring — again. Maybe the third time will be the charm. With energy to spare even at 71, Abrams could settle into a life of leisure, except that’s not in his genetic makeup.
Perhaps Mormon missionaries will enter his life once more and create another hallelujah moment. Recruits from Utah brought him his first major success with door-to-door salesmanship in St. Louis.
Over his long and prosperous career, various publications have called Abrams the Franchise Emperor; the Pied Piper of Plumbers, Air Conditioning Repairmen and Electricians; and the Dale Carnegie of HVAC Success.
Abrams describes himself as an “accidental entrepreneur.” Some say there’s no such thing as coincidence. His wealth is a testament to his insight, intelligence and commitment, as are his Entrepreneur of the Year awards.
He shares his business principles and marketing acumen during hours-long presentations in front of large crowds, gaining an almost celebrity-like status. Abrams has mentored hundreds of owners of contracting businesses, showing them how to improve customer service, efficiency and profitability.
He’s finishing up his second book, “The Baby is on the Island.” The title of his first book, “A Contractor’s Guide to Greatness,” gives a more direct message but the second follows the same business theme.
John Young connected with Abrams in the mid-1970s. “Jim is a fantastic businessman and just a great guy, impeccably honest, creative,” Young said. “We’ve had an amazing 30-year partnership.”
Terry Nicholson began working for Abrams in St. Louis after they met in 1994. At one point, he was drawing paychecks from five of Abrams’ companies. “Even Jim’s accountant would laugh,” said Nicholson, who became Abrams’ business partner in several startups.
Nicholson, who became a motivational speaker like Abrams, describes his mentor as the Dale Carnegie of HVAC success. Today, Nicholson is president of their latest venture in Sarasota, Pricefixer.com and Praxis S-10.
He calls Abrams “a very unique individual who has the ability to take a task that many would perceive as difficult and build a business plan.”
Three of Abrams’ companies currently sit on either the Inc. 500 or Inc. 5000 lists of the fastest-growing privately held small companies in the United States. Although no longer involved in day-to-day business operations, Abrams continues to serve as chairman of the board of all three.
Today, Abrams has embraced a new challenge, food service. He owns three downtown Sarasota restaurants, all within steps of one another on Main Street: Duval’s, Element and PBNT: Pizza Burgers N Tacos. Duval’s ranks 2929 on the Inc. 5000.
The parent company, American Dreams Restaurant Group, was formed about a year ago. One of his sons, Sean, runs it.
One of the key components of Abrams’ business philosophy is the creation of a meritocracy. He shares the wealth. His senior managers and top performers earn equity shares. A senior chef in his restaurant group owns 15 percent of the business.
10 STEPS TO SUCCESS
Here are Jim Abrams’ 10 steps to business success from “The Baby is on the Island.”
1. Do people want or need your service?
2. Is your service: Less money? More convenient? Better, superior, more creative or unique?
3. What is your name and message?
4. What are your “Pillars of Success”?
5. Do you have the necessary capital?
6. CAN you lead and do what is necessary?
7. WILL you lead and do what is necessary?
8. Have you defined your organization chart for the present AND the future?
9. Do you have a very specific five-year plan AND have the knowledge to create and execute it?
10. Will you develop a business culture of a true meritocracy, focusing on the success of each individual working in the company? Will you delegate authority and responsibility? Will you do it legally, ethically and morally?
In the beginning
Abrams initially attended Western Michigan University as a history and English major with the intention of becoming a teacher.
“One summer I worked for a CPA while I was in college and he said, ‘You better back it up with something to generate more income for your family. You’re going to be in a difficult position with a history-English major. Where are you going to play that out besides in a classroom?’ ”
He switched to accounting and earned a bachelor’s degree in 1969. After graduation, he taught history and business at Mumford High School in Detroit.
He later taught accounting on the college level at the Detroit Institute of Business. During a night class in continuing education, a CPA approached him and said he thought his boss could probably use his help. That boss was the owner of the country’s largest Weight Watchers franchise.
He found the franchise in disarray and was hired initially as the administrative manager in 1972. “I got promoted very quickly to general manager and then actually had the opportunity to work with Jean Nidetch, who was the founder of Weight Watchers,” Abrams said. “I was working in reorganization at a very young age. I got the opportunity to kind of envision a puzzle about how that business might become more productive.
“And then I also got engaged with some of the national advertising, which was very, very interesting and fun.”
His personal experience came into play. “I’d been very heavy and I lost weight under Weight Watchers. I knew what motivated fat people to get thin and was able to apply some of that to the advertising side.
“I loved my job at Weight Watchers.”
But the son of the owner came of age after graduating from Harvard. “I was training him to effectively take my job,” Abrams said. “That’s one of the risks in a family-owned business.”
Still in his early 20s and married with one child and another on the way, he pursued other opportunities.
Introduction to HVAC
He began his career in the heating, ventilation and air conditioning industry at Trane’s national headquarters in La Crosse, Wisconsin, in 1976. “They were looking at building a consumer-products division,” Abrams said. “In those days, Trane did mostly commercial air conditioning work and they wanted to start to build for the residential market and they thought franchising might be the way to do it.”
His experience in the franchise-oriented Weight Watchers helped him establish Trane’s consumer-products division.
“I did a very good job there and was promoted and became the top guy in the organization in that division,” Abrams said. “That was in 1980.
“In 1981, I was asked to acquire the GE division in heating and air conditioning. At that time, General Electric used to produce air conditioning for the home. They were the second-largest in the world behind Carrier.
“Trane had grown to about $180 million in my division from scratch, but GE was doing almost a billion dollars. We succeeded in buying it.
“So once again I put myself in a position where it wasn’t a very pleasant place to be.”
He got bounced down the executive hierarchy.
“Trane made the right decision that the GE division guys would be heading up the division and I would be very subordinate,” he said.
By this time, his family has grown to three children. “I’d been traveling forever. In those days, there was no internet. The fax machine was created while I was at Trane. It was a changed world in the way that you managed national businesses. In those days, it was to hop on a plane Monday morning and come back home late Friday night.”
And then he went into his office on Saturdays to catch up.
“I’m not sure my children recognized me,” he said.
When Trane moved to GE’s residential division headquarters in Tyler, Texas, it was a turning point for Abrams.
“I didn’t want to move my family and be on the road anymore, so I started looking for other opportunities.”
Becoming an entrepreneur
Instead of returning to the uncertainties of a corporate future, he took a risk. “So I’m an accidental entrepreneur,” he said.
He took stock of his career so far. He had worked in a family business and that didn’t work out. Then he joined a big Fortune 500 business and again the rules changed.
“I did everything right, but I’m not where I want to be. I’m not getting what I want. So I left and I opened my own company, called Home Energy Services in St. Louis, Missouri, in 1981.”
But the experience was a school of hard knocks.
“I made every mistake known to man,” he said. “In those days, the Yellow Pages was the place to be for marketing. The book closed in March to be published in October, and I opened my business in June.
“So the Yellow Pages were closed. I had not done my research well enough. So I was not to be in the Yellow Pages for almost a year and a half after opening my business.
“Massive mistake. It drove me to do really tough things, so I walked up and down the streets of St. Louis, knocking on doors and asking homeowners if I could be their service company. I telemarketed when it was raining or snowing.
“So I built my business the hard way.”
From hard knocks to a knock on the door
Then destiny came calling.
“I got very lucky one day. I was home at dinner — it was in the summertime — I think we were saying grace at dinner and I was praying to God for help. ‘Please help me with how to get customers.’
“Two young men knocked on my door. I opened the door and there they were in white shirts and ties and their bikes were lying in my yard. They said, ‘God sent us to talk to you today.’ And I said, ‘I think he did. Come on in.’
“Because they were knocking on doors selling God, I thought it would be easy for them to knock on doors and sell air conditioners.
Abrams couldn’t hire them, though he tried. Instead, they advised him to recruit in Utah. So he flew to Salt Lake City and drove to Provo, home of Brigham Young University, to find former missionaries.
“I brought 22 young Mormons back the following summer and I blew my business up,” he said. “I became the largest company in the United States almost overnight. Back in those days, it wasn’t that big of a business, but by 1988 I had $12 million in sales. And for residential heating and air conditioning service in 1988, that was the largest in the United States.
“I was making over a million dollars a year in personal income, so it was, like, hallelujah.”
He morphed Home Energy Services into Air Experts and then Service Experts, retaining ownership.
Teaching business again
As he saw Blockbuster, Circuit City and other companies buying up small mom-and-pop operations to gain mass-marketing abilities, Abrams figured consolidation would overtake the home-service industry, too.
“So I became concerned that what I built in St. Louis would not be sustainable.”
A friend from his Trane days, John Young, had moved to Fort Myers to head a Service America heating and air conditioning franchise, but the business was underperforming.
“We saw a way that we could perhaps consolidate the industry. So (in 1990) we put up a consulting group called Contractors Success Group,” a best-practices college that taught contractors how to manage their businesses, since trade schools did not.
“And that was when I began teaching other small-business people how to be successful. We ended up with 292 clients across the United States. It was a very successful business model.
“They paid us $25,000 to access our consulting services and then they paid us an ongoing $12,000 a year to maintain the relationship with us. We would take those dollars and provide them with tools they could use in the marketplace — sales manuals, training, marketing methodologies, management, software.
“We were the first consolidators in the industry,” Abrams said.
The first retirement fails
By the summer of 1996, he owned five companies plus Contractors Success Group. Along with 12 key clients, he rolled them into one business and took the $65 million company public on the Nasdaq exchange. Less than a year later, in March 1997, Abrams, as company president, did another stock offering, this time on the New York Stock Exchange.
By September 1997, the company had logged $288 million in sales.
“So I went from knocking on doors all the way up to $288 million in sales,” he said. “Very profitable. No debt on a very, very fast-growing business. Very well regarded on Wall Street.
“I grew up in a family where my dad was an autoworker and he always said, ‘Hey, Jim, if you get rich, get out and enjoy your life.’
“So, at 50 years old, I retired. I was a very wealthy man.”
He bought a beach house on Siesta Key. By then he was divorced.
“So I was living there by myself, bored to tears. Mentally, it was not a good experience being retired at 50.”
Back in business
Abrams came out of retirement in 1999 and started what became Clockwork Home Services in Sarasota. “The business grew very rapidly,” he said.
It became the home of Mr. Sparky, One Hour Air Conditioning and Benjamin Franklin Plumbing, the latter two founded by Abrams in 2003 and 2002, respectively. Abrams bought the original Mr. Sparky from its Atlanta founder and began franchising it as well.
In 2000, he invested in the Mutual Funds Store and franchised the company. “That grew very rapidly as well,” he said. Back then the company managed a $100 million portfolio. “We took it to $3 billion,” Abrams said. He sold his interest back to the original owner in 2004.
In 2008, he became very concerned about the economic meltdown. Clockwork was doing $220 million in sales. “The franchise organizations were growing very rapidly,” he said.
Both One Hour Air Conditioning and Mr. Sparky were the top brands in the country in their line of business, and Benjamin Franklin was No. 3 in franchise sales combined at that time, he said.
He and Nicholson had the idea of taking the company public, but the banks and public markets were effectively closed for business.
Two major companies came calling with purchase plans. A multinational British energy and services company, Centrica, prevailed and its subsidiary, Direct Energy Services, of Toronto, closed on the $183 million deal in 2010.
“I retired for a second time,” Abrams said. “I wasn’t quite certain what to do next, and that’s when I started thinking about the restaurant business.”
He came back out of retirement in early 2012 and founded a family business called Angel Shot to invest in new ideas. That business then spawned BizZoom, a small private-equity firm that advises startups and invests in profitable businesses ripe for franchising. BizZoom’s initial investment was the launch of Fyzical Therapy & Balance Centers in 2013.
The Fyzical national health care franchise operation focuses on physical therapy, balance retraining and total well being. The operation now has more than 350 franchises nationwide.
The Fyzical parent company, based in Sarasota, ranks 498 on the Inc. 500 list. He owns a Fyzical franchise in Las Vegas, Nevada, established in 2014, that ranks 2395 on the Inc. 5000.
In 2016, Abrams and Nicholson launched two websites with a symbiotic relationship. Pricefixer.com markets low-cost heating-and-cooling equipment and provides quotes to homeowners based on residence size; Praxis S-10 works as a membership service for independent contractors and installers, connecting them with Pricefixer customers. Today, the sites serve more than 120 independent HVAC contractors across the country and the Praxis members do approximately $300 million in combined sales.
Since two of his five children live on the West Coast, Abrams and his wife, Kathleen, whom he married in 2001, are considering buying a home there. But Sarasota will remain their primary residence.
Abrams can’t commit to a total retirement.
“What’s in my future? I’m trying to get free of all my business obligations so I can actually determine that.
“I’ve been doing this for so long that it’s a little challenging to get away from it. So I’m kind of weaning myself out this year from all the different responsibilities I’ve had all these years.”