Sandy Keathley and Ben Kinnebrew of Bellingham were not looking to open K&K Industries in 2004. The small business found them.
Keathley was working as an accountant at Western Washington University in the college of education. Her husband was working for a Canadian firm that had a metal fabrication shop in Ferndale, north of Bellingham.
It offered the only laser metal cutting between Vancouver, B.C. and Seattle. When the Canadians closed the shop and moved the operation across the border, Keathley and Kinnebrew decided to buy a metal-cutting machine.
“It didn’t happen overnight,” said Keathley. “Between March and September of 2004 we operated out of our house. Ben would job-out the work, taking orders for laser cutting to be done in Seattle,” she said.
Keathley was keeping the books. At the same time she was meeting with a Small Business Development Center (SBDC) counselor at Western Washington University, which hosts an office for the Washington Small Business Development Center network.
The SBDC office in Bellingham is part of the WSBDC network of 34 advisers, counseling at 24 different locations. The service is partially funded by the SBA and Washington State University, along with other public and private entities throughout the state, and offers free, confidential, one-on-one business advising and classroom training.
Coincidentally, Keathley had worked for the SBDC office as a graduate student while finishing her MBA. She helped others with their businessplans; now she was working on her own plan that would justify buying a half-million-dollar piece of equipment with an SBA-guaranteed loan through a local bank.
“One of the first things I did was call the SBDC and set up monthly meetings,” Keathley said.
Despite her own knowledge and background, having the assistance of the SBDC was reassuring.
“I wasn’t used to such big numbers,” she said, or the notion that everything the couple had worked for up to that point was on the line – including their house, pledged as security for the loan.
“It was a leap of faith,” she said, although a calculated one.
“Ben and I are a good combination,” Keathley said of her husband for 23 years.
“He knows metals,” having started work as a welder when he was 19, eventually becoming general manager of the Canadian operations in both Richmond B.C. and the Ferndale Washington operation that was shutdown.
“I had an MBA, worked at the SBDC office and knew accounting.”
Plus, she had entrepreneurialism in her blood: in the mid-1950s, her father built a lodge in Alaska near Anchorage at Portage Glacier. Portage Glacier Lodge was built with financing from the SBA, making her a second-generation SBA borrower.
Everyone worked at the family-owned and operated business, serving busloads of tourists on the way to view the glaciers.
“As an eight-year-old youngster, I would stand at the door so long greeting people and waiting tables, my feet would hurt” at the end of the day, she said.
“At the time I really resented it, because my friends would go to summer camp and I would be waiting tables. But that experience served me so well, learning about customer service and employees. Between that and the SBDC, I became the boss I had always wanted.”
The business kept growing, and by 2007 the couple knew they needed more space. At first they planned to build a new building, but after investing a year and a half and $150,000 on plans, surveys and plat/application costs, they gave up on building; as the permitting process was too long and cumbersome.
But as it had many times before, serendipity struck again for K&K Industries and the couple found “the perfect building.” She said when she saw it, it reminded her of the house her dad built in the style of Frank Lloyd Wright.
It turned out the building’s architect went to the Frank Lloyd Wright School of Architecture. The business was on a roll.
The new facility was filled with new equipment, also financed by the SBA through a 504 equipment loan. K&K’s financial plan, put together by one of the best accountants around – Keathley – projected continued strong growth for the business.
To celebrate the business expansion, an open house was scheduled. About two weeks before the open house, the financial crisis of September 2008 occurred, followed by the recession.
All the best planning could not have prepared the couple for what lay ahead. Keathley said she and Kinnebrew managed the crisis without laying off a single employee as well as retaining all their benefits, although they had to cut back on hours and put their own money and savings into the business to meet payroll.
Their SBA lender at the time, Elizabeth Rusnak, didn’t panic. Rusnak, who manages the SBA’s 504 loan programs for Northwest Business Development Association for Whatcom County, said Keathley and Kinnebrew “are amazing to work with.
Ben knows the business inside out, and Sandy – she has been a bionic financial manager. When I received a financial statement from her, I knew I could count on it.”
An SBA 504 loan, in coordination with a private commercial loan, offers long-term fixed financing for commercial property purchase or construction, and for equipment financing. Rusnak said the SBA program for equipment purchase, as it was used for K&K Industries, should be a first consideration for other small business owners needing to buy expensive equipment.
“Not many people know they can buy through the SBA,” she said. “They think they have to lease, and our rates are going tobe more competitive.”
With the help of the SBA-backed financing in 2004 and the later 504 loan, the firm has manufactured some remarkable products, including all the cut aluminum for the three new Washington state ferries including The Chetzemoka, The Salish , and The Kennewick.
“When you see all the different things we do and all the customers we have, it’s pretty amazing,” she said.
“It is important to stay focused: we do not export, we sell to companies that export. We don’t do government contracts, but our customers do. We just cut and bend metal,” she said, adding there have been opportunities to add welding and powder coating to their services, but they stuck with what they do.
K&K’s success and growth in the metal fabrication market did not go without notice. In June 2012, Keathley and Kinnebrew sold their business to NaiMor, Inc.
Keathley said the deal means they will not have to work ever again if they don’t want to. But it was vital that their employees were taken care of too, and the deal guaranteed them their same job at the same pay with the same benefits for six months if they wanted to stay.
She said there were 24 employees at the time of the sale, up from 3.5 "plus Ben, and me working half-time” when the business opened eight years earlier.
“This is testament to (the idea that) everything you do in life leads you to where you are,” she said. Keathley reflected upon the couples' life and the opportunities, challenges and coincidences along the way, including the chance meeting Keathley and Kinnebrew had in a calculus class at Whatcom Community College more than two decades ago that lead to marriage and a business partnership.
“It’s been an amazing ride,” she said.
As far as what’s next, Keathley said the couple will take some time to travel, visit family, and sort it out. And maybe do some gardening.
She won’t rule out another small business, but doesn’t have any plans for that.
“You never know,” she said, “you might see me back at the SBDC at Western Washington University” helping others with their businesses, sharing first-hand knowledge about how to build a successful small business.
For 60 years, the family owned and operated B&G Machine has specialized in remanufacturing diesel engines and component machining. From its start serving the timber industry, the company has broadened its client base to more industries and today, its engines operate in locations around the world, both on land and at sea.
Western Washington’s timber industry was the main source of customers for B&G engines until logging began to decline in the 1990s. Surviving meant modernizing the company’s operations and reaching out to new industries.
By 1998, the nimble B&G had expanded to mining, marine, power generation, oil and gas with customers throughout the western U.S. and Canada. The company’s state-of-the-art facilities in Seattle’s SoDo industrial district now include a new engine assembly operation with one of the largest engine dynanometers in the world.
Having reaped the benefits of diversification, the company next set its sights overseas where the complexity of tariffs, customs agents and cold calls to international buyers required yet another adjustment to meeting customer demands. As B&G’s vice president of finance and administration, Johnny Bianchi, along with his brother, David, vice president in charge of sales and marketing, successfully marshalled the company’s entrée to global trade.
Some obstacles were a little easier to overcome with assistance from the Washington State Department of Commerce. B&G had begun remanufacturing diesel engines from China, but raninto trouble when it was time to ship them back.
Tractus Asia, Commerce’s long-time representative in China, stepped in to negotiate with Chinese customs brokers and freight forwarders. “It was like trying to thread a needle,” Johnny Bianchi said. “Tractus understood how to thread that needle.”
The company also encountered challenges close to home. Trying to send a B&G employee to Canada to work on an engine became expensive; the company almost abandoned the project.
Before the company gave up for good, Commerce trade specialists helped B&G make the right connection with the Canadian border service. That connection helped B&G find the procedures and requirements for temporary foreign workers so they will be in full compliancewhen the B&G technician was standing with his bags at the border.
Now, Bianchi said, “Commerce is on the call list when we have an international problem.”
That trust and confidence played a role when Commerce was recruiting companies for a delegation to the 2012 Hannover Messe industrial trade show in Germany. International trade shows are costly, and the Bianchis wanted reassurance the show was worth the investment of time and money.
Commerce helped defray the cost by awarding the company an export voucher. Export vouchers are funded through Commerce by the U.S. Small Business Administration’s State Trade and Export Promotion (STEP) program, which helps small business begin exporting or increase their export sales.
Along with the voucher, Commerce also helped B&G make high-impact connections with potential customers in the European market. “One of the big things for us was meeting the right people,” said David Bianchi. “Commerce helped match us with prospective companies,and kept us on track for meeting all our appointments.”
The company also came away with a potential new market to explore — rebuilding gear boxes for wind turbines — and a first-hand look at the strategies of their European competitors.Since the April Hannover show, B&G Machine has closed several deals and is well on its way to meeting its target of raising export volume by 19 percent for 2012.
Currently international sales account for 40 percent of B&G sales volume. “We really took big steps forwardat Hannover,” said Johnny Bianchi, “and having the support of Commerce was huge.”
Danny Farrow created Farrow Concrete Pumping, Inc., in his home-town of Pebble Beach, Calif., in 1997.
From its humble beginnings with a single concrete pump and pick-up truck, Farrow grew this business to a full-line of five pumps and vehicles of varying capacities and capabilities.
He was so successful that a larger, frustrated competitor bought his company in 2003 generating $100,000 in after-tax profit.
Investing these retained earnings Farrow relocated to Tacoma, Washington and created Farrow Concrete Specialties, Inc. (FCS. He began the company performing concrete pumping and quickly expanded to include concrete forming, placing, and finishing.
Over the next few years, FCS grew in size and scope to move from small residential projects to heavy commercial and government infrastructure projects. In fact, in 2006, FCS was recognized by the University of Washington as the fastest growing minority-owned business in state of Washington.
From here, FCS gained greater capabilities, to include light general construction and earthwork and began to pursue larger projects such as dams, parking structures, and public facilities. To reflect its growing capabilities and future direction, the company’s name was officially changed to Farrow Construction Specialties, Inc. in 2009.
In 2010, Farrow further enhanced its growth capability by becoming 8(a) certified by the U.S. Small Business Administration. Under Farrow's leadership, Farrow Construction Specialties, Inc. has built considerable operating expertise in the concrete and earthwork arenas and is expanding into design-build and general construction.
Farrow developed numerous strategic partnerships and working relationships with some of the best general contractors in the state of Washington. Additionally, Farrow has received numerous awards as a General Contractor with the U.S. Department of Defense.
Although currently a small, minority-owned enterprise, it is their intent to grow the organization's financial strength, core capabilities, and human resources to compete as a strong regional general contractor in the Pacific Northwest.
Farrow Construction Specialties, Inc. showcases the value of developing a creative, competitive and competent workplace with an eye on the future.