Building A Legacy – Clem’s Garage
For Dennis Clem, running a service station has always been a family affair. It started when he was a young boy sitting next to his father in a tow truck responding to calls from stranded drivers. Years later Dennis’ own son, Bill, would sneak down and sleep across the front door so his father would have to wake him up when a call came in.
Clem’s Garage was opened back in the 1940’s when servicing tractors from the local farms was bigger business than servicing cars. Dennis remembers whole families would come into town with the tractors and spend the day visiting friends and picnicking next to the garage while the technicians completed their repairs and maintenance. But Dennis’ fondest memories were of the pool table his Dad had at the garage where farmers would play to pass the time. Dennis learned how to play pool from one of those farmers and enjoyed spending time watching and playing with the men who visited his Dad’s garage. Clem’s garage was more than just a service station, it was a gathering point for the community, and the center of the universe for Dennis and his six other brothers and sisters.
As a teenager Dennis received his qualifications to conduct state inspections and started working for his father. Eventually his father retired and turned the garage over to Dennis and three other of his siblings. The technology changed, cars and not tractors became the mainstay of the business, and the service station expanded into a larger garage, more tow trucks, but the same family with the same commitment to the community. Eventually Dennis’ two sons Bill and Craig had started working for Clem’s Garage. Like their father, they started by sweeping floors and running errands until they were old enough to get their state inspection license and starting working on cars. The small family garage became a growing mainstay in Winchester and by 2010 had become a repair and maintenance garage with 4 bays, a towing service with 8 trucks, and employed close to 30 people.
The Clem family believed in paying for everything in cash so with each expansion or new building they saved and bought what they could afford. But in 2010 Dennis saw an opportunity to create more than just a great family owned service station; he saw the opportunity to create a legacy. After talking with his siblings it was decided that Dennis would buy out his brother and sisters. While that decision was simple enough; to complete the buyout Dennis would need to do something that Clem’s Garage had never done its more than 60-year history, borrow money. To reserve working capital and maintain its flexibility to expand and grow in the future, Dennis looked at acquiring a loan to complete the buyout and retain ownership of the company. He looked to his local banker to help guide him through new challenge of obtaining a loan. Due to the size of the loan and the collateral requirements, Dennis’ local bank contacted Dave Phillips with Wells Fargo bank to help complete the deal. Clem’s Garage was in a good financial position, had plenty of collateral with equity, but being in a service industry made it a risky loan for most banks. Dave recognized this and called upon the Small Business Administration’s lending program to provide the guarantee that would make the buyout possible. The 7(a) Program is SBA's primary lending program. It provides loan guaranties for small businesses unable to secure financing on reasonable terms through normal lending channels. The program operates through private-sector lenders who provide loans which are, in turn, guaranteed by the SBA. A maximum loan amount of $5 million has been established for 7(a) loans. The eligibility requirements are designed to be as broad as possible in order that this lending program can accommodate the most diverse variety of small business financing needs. Thanks to the Small Business Jobs Act, the loan to Clem’s Garage carried a 90% guaranty to Wells Fargo Bank and business was not required to pay the SBA guaranty fee, a savings of over $30,000 to the business.
Today Dennis Clem owns and operates Clem’s Garage with both his sons and five grandchildren as part of the overall staff. The operation has truly become a family affair. Dennis and his sons Craig and Bill built homes on the 10 acres that include the service station and main office building. And one of the best upgrades to the location is the conference room that Dennis remodeled this year. There is a conference table and chairs where Dennis meets with his grandchildren once a week to provide mentorship and hear their ideas on how to improve the business. There is a kitchen for large family meals that often happen when someone has to work late. He’s even built a room above the office to serve as an apartment for one of his grandchildren. But with all the changes and remodeling, the pool table that served as the hub of activity some 60 years ago still has a place in the corner of the new room and still draws a pretty good crowd. What used to serve as a gathering place for the community, now serves as an ongoing legacy for one man’s family. The art of passing down a trade to multiple generations in one family is becoming more and more a thing of the past. And that might have been the case for the Clem family if Dennis had not had the vision to create a business centered on just that. Dennis Clem has built a successful business that has continued to serve the community for over 60 years, but what he is most proud of is building a legacy for his family.
Martin-Star Cabinetry and Design, LLC
1610 W. Main Street
Richmond, VA 23220
Martin-Star Cabinetry started as a sole-proprietorship in 2005. The owner, Joshua Kayer, had no formal training as a cabinet maker but loved the creative process and challenges from taking pieces of wood and turning them into functional and beautiful pieces of art. Prior to starting this business, Mr. Kayer was a member of a very successful rock band, traveling the country, and recording under Madonna’s record label. He always knew he wanted to eventually settle down and have a family, and that he needed a “Plan B”. His “Plan B” evolved into Martin-Star. Mr. Kayer has entrepreneurship in his blood. His great-grandfather, grandfather, and father were entrepreneurs, running Mama Kayer’s bakery in Norfolk for over 100 years before selling it in 2007. Josh said that he always knew that one day he would run his own business.
Like most small businesses, sales and profits were meager in the beginning, and for most of the first few years, the business consisted of Josh and 1-2 creative folks he employed on an as-needed basis. Revenues began to grow in 2007, at which time he converted to a LLC and hired more staff. He also took on some of his first commercial work, providing cabinetry and seating for area restaurants. It was during this time that Fulton Bank began to work with Josh, using an SBA guaranteed loan to provide the financing he needed to grow his business.
His reputation for quality craftsmanship and timely completion of his jobs helped Josh grow the business even through a time of unprecedented economic turmoil, and in 2010 the bank provided him additional funding (again on a SBA-guaranteed basis), to enable him to update his shop and purchase additional equipment to help him meet the needs of his clients.
The 7(a) Program is SBA's primary lending program. It provides loan guaranties for small businesses unable to secure financing on reasonable terms through normal lending channels. The program operates through private-sector lenders who provide loans which are, in turn, guaranteed by the SBA. A maximum loan amount of $5 million has been established for 7(a) loans. The eligibility requirements are designed to be as broad as possible in order that this lending program can accommodate the most diverse variety of small business financing needs.
According to Mike Austin, senior vice president of Fulton Bank, “It has been exciting to watch Mr. Kayer grow this business from an idea to a viable small business, and none of the funding he needed to grow would have been available without the support of the SBA via its various loan programs.”
Mr. Kayer noted that without the SBA loan programs he would not have been able to secure the financing he needed to grow his business and he also added, “Mike Austin has been a great asset to our business.”
The James River is central to all that is Richmond; history, recreation, jogging on the canal walk, bird-watching, kayaking, nature hiking and even swimming. Add to that list elegant dining, either open air or behind floor-to-ceiling windows, that offers a panoramic view of the James River and Richmond skyline. Richmond can claim such a restaurant: The Boathouse at Rocketts Landing, 4708 East Old Main St., Richmond, Virginia, that opened in August of 2009. Partake of blue sky, blue water and blue goblets on a balmy day.
The Power Plant now housing the restaurant was built around 1910 and was used to generate steam power for Richmond’s trolley cars. Contemporary glass and steel are now meshed around the baked-brick smoke stack and other industrial remnants of Richmond’s past. The Alliance to Conserve Old Richmond Neighborhoods (“ACORN”) honored the project with its 2009 Golden Hammer award for “best commercial renovation.” Also, the Greater Richmond Association for Commercial Real Estate (“GRACRE”) has listed the Power Plant at Rocketts Landing as a finalist in several categories for their commercial real estate awards to be announced at a Gala on April 21, 2010. The categories are: Renovated or Historic Rehabilitation: Mixed Use; Interior; and Retail or Restaurant awards.
The mastermind behind the restaurant is Kevin Healy. Healy brought entrepreneurial experience from his first restaurant location, The Boathouse at Sunday Park at Brandermill in Chesterfield County. His vision was in tune with the developers, WVS companies, and he added his own insight to the interior space. Healy maintained that the restaurant should be like the precious jewel of the development. His vision was to make the time spent in the restaurant into an experience to be remembered and revered.
The vital missing link the business needed was access to additional capital. No money was flowing from the big lenders despite Healy’s experience, equity injection and his innovative business plan. Lean times and a tender economy were closing the more conventional lending outlets. Healy remarked “the banks seemed paralyzed by fear.” Healy was aware of the U.S. Small Business Administration’s (SBA) guaranteed lending program. The 7(a) program is SBA’s primary small business loan program providing a guaranty to participating lenders who submit small business loan applications that meet SBA’s eligibility and credit requirements.
The business plan for The Boathouse at Rocketts Landing was presented to preferred lender Sonabank, headquartered in McLean, Virginia. The preferred lender program called “PLP” is another step in SBA's process of "streamlining" the procedures necessary to provide financial assistance to the small business community. Under PLP, SBA delegates the final credit decision and some servicing and liquidation authority to carefully selected lenders. Healy needed the missing piece, money for equipment and working capital, to implement his plan. Finally that piece was beginning to take shape. Sonabank came through with a SBA guaranteed loan.
There was even a positive side to the down economy. The enactment of the Recovery Act meant that his business saved $10,000 in fees and that the lender was able to get a 90% guaranty. After having doors shut in his path, Healy said the process was “quick, easy and painless and approximately done within 60 days.” Healy advises that the most challenging part was “to always stay engaged in making things happen. If the lender happened to need a certain document executed, I was not averse to personally driving it there—I needed to stay on task to see that it was done,” he explained.
The James River is only part of the story of The Boathouse at Rocketts Landing. It also is about the perseverance of an entrepreneur with a vision to stay focused on the task of securing and directing the flow of capital. Now the challenge is maintaining the quality and ambience that the Boathouse at Rocketts Landing has created. Measured by the positive reviews and a number of customers, the success of the Boathouse at Rocketts Landing is flowing as smoothly as the river that runs past it.