King of the City

King of the City

Development by Mark Gordon | Managing Editor

An engineering and planning firm overcomes expansion anxiety. Its antidote is success, such as a 126% revenue jump since 2003, to more than $32 million in 2005.

With the Florida housing and population boom in full blast earlier this decade, Keith Appenzeller was starting to get the now-or-never feeling about growing the mid-size engineering and planning firm with which he was a top executive.

Several of the Tampa-based company's clients had been asking for assistance on projects south of its headquarters, in Sarasota and Manatee counties. And there were bushels of opportunities northwest of Tampa, too: City leaders in Jacksonville had recently passed a tax increase to fund more than $1 billon worth of road and building construction projects.

Still, the patient and deliberate Appenzeller had his doubts. Growing the company, King Engineering Associates Inc., was risky. Says Appenzeller: "We turned down opportunities because we didn't want to stub our toe and hurt our reputation by failing."

Ultimately, though, the potential rewards overruled any worries. After turning away four or five clients, Appenzeller and other top executives decided passing up work "was getting stupid." The firm opened an office in Jacksonville in 2002, followed by a second location in 2004 on University Parkway in Sarasota.

The results were overwhelming: In the past four years, revenues have grown 126%, to $32.7 million in 2005, from $14.5 million in 2003, and the number of employees has doubled, from 165 in 2002 to 330 in 2005. What's more, the firm's growth has been recognized by The Zweig Letter, a national publication covering the industry; King ranked 21st on the publication's 2006 hot list, jumping a ranking-best 61 spots from 2005.

Growing so much so quickly wasn't "the result of any long-term intelligent planning," concedes Appenzeller, 53, named King's president in 2005. Still, beyond simply opening new offices and piggybacking on Florida's robust economy, King's growth was the result of a defined strategy to enter new business fields, reorganizing of its management structure and a renowned emphasis on customer service, including doing things "quicker, better and cheaper," King says.

Another key to growth: While deliberately slow to make the move to open new offices, Appenzeller and other top staff haven't been shy about closing or consolidating offices that didn't meet profit goals.

'A better company'

King Engineering has grown outside of Tampa before. At one time it had offices in Citrus and Hernando counties, as well as in Clearwater and New Port Richey. But in 1997, King executives closed down the two offices north of Tampa, consolidating the work into Tampa Bay. It was a detached, profit-and-loss analysis, Appenzeller says, one that ultimately "allowed us to be a better company" by forcing employees to focus on their strengths.

It then set about opening new offices. The Jacksonville branch started out as more of a fluke - the company was originally looking for a replacement for its top transportation engineer; it asked a recruiter to find the best in the state.

Instead of a singular engineer, the recruiter found a transportation planning company in Jacksonville run by Jim Robinson. King ultimately hired the entire 12-person firm, staffing it with about 65 employees over the last four years, such as landscape architects. The timing was right. Since 1999, the city has been going though a building, planning and engineering renaissance under the Better Jacksonville Plan.

Next up was opening an office in Sarasota. Appenzeller says when doing land development "it's very important to have local knowledge" and that, in addition to meeting client needs, was the reason behind the new office. That branch has hired about 45 people over the past two-plus years.

With each office, Appenzeller says, the company goes through an extensive weeding-out process when making new hires. Ten years ago, he says, the company hired just to fill open spots that day, without any long-term planning. Its hiring methods are more refined today, looking for bright and talented people who can work in more than one engineering discipline.

Staying entrepreneurial

Like hundreds of other growing companies, King's continued accession is a balance between not wanting to miss out on potentially lucrative clients and not wanting to grow for growth's sake. "We try to be entrepreneurial and keep things simple so we can react" to new opportunities.

Those opportunities were some of the largest construction projects in Greater Tampa over the past three years. A partial list includes serving as civil engineer on the $120 million project to improve security at Tampa International Airport; working on the $26.1 million Progressive Insurance call center in Riverview; and coordinating structural and civil engineering on a 300,000-square-foot, $18-million office building in Tampa.

Prior to working on public projects, such as the airport or the Pinellas Trail, King's forte was civil engineering and land surveying for homebuilders and construction companies. The firm was founded in 1977 by Ken King, who sold his share of the company to other principals in 1984; Appenzeller joined the firm in 1991, after selling the land-surveying firm he owned with two partners to King Engineering.

Up until the late 1980s, about 90% of the company's work was in road design and land development, sticking mostly to the neighborhoods in and around Clearwater. When the national economy began to hiccup in the early 1990s, Appenzeller says, the firm started to dabble in public sector work, both for another revenue source and to meet customer demand.

The move was a mixed blessing - new opportunities meant more competition for jobs. So the company decided not to go after the most competitive work, such as Florida Department of Transportation contracts. It instead developed a niche within a niche by searching for jobs not many firms would bid on, such as solid waste plants and reclaimed water projects.

And throughout the last decade, the firm has opened up new lines of work, besides going both public and private. Disciplines the firm now works in include ecological services, mapping and surveying and construction management, in addition to civil and environmental engineering. "Ten years ago," Appenzeller says, "we're doing individual projects. Now we are helping clients put together communities."

AT A GLANCE: CUSTOMER SATISFACTION

Great customer service is one of the ultimate business cliches. But that doesn't mean King Engineering overlooks it. During the past three years, the firm has made customer relations a meaningful top priority.

The company has informal rules setting up deadlines to return client phone calls and e-mails, for example, and it also gives each client weekly project updates.

Other customer service driven initiatives include sending out detailed customer satisfaction surveys to monitor what works and what doesn't, and the firm recently hired a client service manager for each office. "Our clients look at us as an extension of their own business," company President Keith Appenzeller says, so maintaining good relations is a key to retaining long-term customers.

AT A GLANCE: KING

ENGINEERING ASSOCIATES INC.

Year Revenues Increase

2002 $14.5 million

2003 $17.3 million 19%

2004 $23.5 million 36%

2005 $32.7 million 39%

Average annual growth: 31%

Job Growth

Year Employees

2002 165

2003 190

2004 254

2005 330

Source: King Engineering Associates Inc.