Hello, Florida

Hello, Florida

DEVELOPMENT by Janet Leiser | Senior Editor

The land development firm of Atwell-Hicks is on the move, chasing Florida's building boom. The firm's leaders know they can't wait for business to knock: Survival isn't guaranteed, not even after 101 years.

Last year, Atwell-Hicks Chief Executive Officer Robert G. Macomber opened a Tampa office, the firm's first location outside the Midwest. The office, whose clients include Fifth Third Bank, Target, Wal-Mart and Pulte Homes, is expected to generate $7 million in revenue in 2006, its first full year of operation. An Orlando office will open later this year, and the company expects to open an office in Jacksonville as well.

Atwell-Hicks, which employs about 460, including 26 in Tampa, fared well as a local company based in the Midwest. Over the past 20 years, it averaged 25% annual growth, with 1979 revenue of $660,000 climbing to $62 million last year.

But construction is expected to slow down in Michigan and other cold states as more baby boomers retire and move to warmer climes such as Florida and Arizona. Macomber, who first worked for Atwell-Hicks in 1971 as a high school intern, and the other eight board members decided the firm should follow the boomers.

It would be foolish to ignore the demographic trend, he says.

Building permits in Michigan and Ohio, where the firm has offices, are expected to decline by as much as 2% annually over the next several years, Macomber says. But the Tampa Bay area and most of Florida presents a different picture, with continued growth projected at as much as 15% annually.

"We really saw that we'd have continuity of program in Michigan," he says, "but the growth of our program would occur in Florida."

About 20,000 permits are issued each year in the southeastern Michigan market, compared to 24,000 in the Tampa Bay area.

"We were very focused on southeast Michigan," Macomber says. "But we realized we had a 35% market share in southeast Michigan, and it was unlikely we were going to go to 70%. If we wanted to continue to grow we had to move outside of southeast Michigan."

In May 2001, Atwell-Hicks opened an office in Naperville, Ill., a western suburb of Chicago. In 2004, it opened offices in suburban Cleveland and in Grand Rapids, in western Michigan.

When the firm's leaders began talking about heading south, clients urged them forward. They said Florida firms were having trouble meeting demand.

Then Atwell-Hicks President Brian Wenzel asked Macomber if he'd lead the southern expansion.

"That night I came home and mentioned it to my wife, Jane, and she said, 'Give me 15 minutes to pack,' " he says. "She has always loved Florida and always thought that one day we'd move here."

Macomber, 51, with the help of Wenzel and the firm's directors, is pushing Atwell-Hicks to become a dominant player in the Florida development market.

The firm is expected to pass the $100 million mark next year, Macomber says. He declined to say how much is profit, except to say Atwell-Hicks usually does twice as well as the industry average of 9% to 11%.

But Atwell-Hicks' strategy of growing aggressively isn't cheap.

"We invest in the firm, in business development in the good times," Macomber says. "We invest in people so that when things get lean, Atwell is positioned to be the firm of choice."

He attributes the company's success to strategic planning and to shared ownership of the company. About 28 employees hold equity in the firm, including Macomber and Wenzel. Each owns about 10%. But the business doesn't have a majority owner.

"It keeps our great people with us," he says.

Macomber joined the firm full time in 1976 after graduating from Ferris State University in Grand Rapids. Three years later, he and four other firm members bought 50% ownership from retiring president, Bob Jagow.

Within a couple years, a real estate recession hit the country.

"We really hit rock bottom," Macomber says. "We went down to 14 people - seven owners and seven employees.

"When we came out of it, we said, 'We'd never, ever go through that again.' So we began doing strategic planning every year, starting in 1984. We first focused on becoming consistently profitable. Then we began to focus on growth and building a lot of the [organizational] systems we would need to grow."

Atwell-Hicks invests heavily in its support structure, Macomber says. The company recently compared its overhead, which includes the cost of operating the human resources, marketing and accounting departments, to other land development firms and found it was about 20% higher than the industry average.

The firm also studied its return on investment, he says, adding, "Our return on overhead was 50% higher than the industry."

Without an adequate support system, Atwell-Hicks wouldn't be able to sustain its growth - the key to its prosperity, he says.

"We really believe that growth is the backdrop that allows us to do some of the other things that we've done," Macomber says. "With our client organizations growing like they are, we're talking about companies like Wal-Mart and Target, they can quickly outgrow a consultant if a consultant isn't growing with them."

The business does more than plot its annual growth. Each June, the leaders at Atwell-Hicks gather to talk long-term strategy.

"We get into a more abstract discussion of where do we want to be in five to 10 years? What services do we want to provide? What type of clients should we have?"

They formulate a document that is later used in preparation of the annual plan. Local competitors include Heidt & Associates, WilsonMiller and King Engineering.

At the June meeting, partners aren't allowed to discuss equipment needs or employee growth or any of the nuts and bolts of running the business.

"If somebody brings that up we literally fine them," Macomber says. "They aren't able to talk about that."

In five years, Atwell-Hicks plans to have multiple Florida locations and a presence in Arizona, another state attracting baby boomers. By then, the Michigan-rooted firm expects to employ more than 1,000 people, with its business distributed more evenly between all of its markets.

AT A GLANCE

Atwell-Hicks

Revenue Growth

2002: $25m

2003: $31.5m

2004: $43m

2005: $62m

2006: $76.5m*

2007: $102m*

Source: Atwell-Hicks. *Projected

HOW TO GROW YOUR BUSINESS IN A NEW STATE

Atwell-Hicks Chief Executive Officer Robert Macomber suggests these tips for growing a business in a new state or area:

Support systems: Investment in business support services such as office space, equipment, finance, human resources, technology, etc. is imperative, even before it is apparent that it is needed, to sustain substantial growth.

Training: Development and implementation of a staff training and development program is essential to not only orient and train new staff members, but to promote significant advancement to meet the ever increasing demand for leaders in a rapidly growing firm. This also reduces staff turnover and enhances recruiting efforts.

Reward excellence: Provide ongoing ownership opportunities to key leaders based on relative contribution to firm success, not tenure with firm or age.

Client is king: All of the above initiatives must be grounded on the single principle of being in business to serving clients. Strive to understand the client's strategic plan and help them achieve it.