He moved back to Cincinnati in the early 1940s and opened a record store, Syd's Record Shop, initially selling used jukebox records. In 1943 he started King Records; after it failed initially, he refinanced it with the support of family members. The label was originally intended to produce hillbilly records, but Nathan diversified when he discovered the demands of African-American teenagers for what were then called race records. Early records were pressed in Louisville, Kentucky, but because of their poor quality Nathan set up his own record-pressing plant in 1944 on the premises at 1540 Brewster Avenue in Cincinnati, the home of King Records for the next 25 years. He also set up a recording studio at that site and made his own distribution arrangements across the Midwest rather than relying on national companies.