Growth Plans

Growth Plans

Smaller, nimbler engineering firms are quick to find profitable niches despite the economic downturn. A young Gulf Coast firm is expanding during challenging times.

engineering by Jean Gruss | Editor/Lee-Collier

Large engineering firms on the Gulf Coast are slashing expenses as their bread-and-butter land-development business sinks along with the real estate downturn.

But smaller and nimbler firms, which focus on small- to medium-sized projects previously ignored by the larger engineering firms during the boom, are holding their own and even expanding.

Consider Quattrone & Associates, a firm owned by 38-year-old Al Quattrone, which recently moved into a new headquarters building in Fort Myers and has been adding to its staff.

Since he bought the firm in 2000, Quattrone has grown the company from three employees to 13 today and has tripled the list of clients to more than 300. The company hasn't been completely immune from the downturn; revenues were down 5% last year to $1.9 million and Quattrone estimates they'll fall another 10% this year. But that's not bad considering the land-development business has come to a virtual halt, staggering bigger competitors.

As larger firms struggle, small and hungry competitors get more aggressive and take advantage of the downturn to prepare for the eventual rebound. "We want to be able to jump on new business when it comes," Quattrone says.

In the meantime, the agility of smaller firms allows them to pursue other businesses. Their entrepreneurial culture combined with lower overhead gives them an opportunity to beat out larger rivals.

Get the fire chief

One area Quattrone says shows promise is forensic engineering. That's doing things such as determining how a fire started inside a building for insurance-fraud purposes.

Quattrone recently hired the former Lehigh Acres fire chief and pays a fee to a company called Investigative Engineers Association to get leads from its insurance-company customers. The firm has just recently started its foray into forensic engineering with one job, but Quattrone says he hopes to make it 20% of his business, a sum he estimates will be equal to what he may eventually lose in the real estate downturn.

But that doesn't mean real estate work has stopped. In particular, investors and developers are hiring engineers to get entitlements to build later. It can take one to two years to obtain regulatory approvals to build, so some landowners are doing that now so they can be ready to act when the market returns. "People are doing lots of re-zonings," says Fred Drovdlic, vice president and planning director.

In addition, investors eager to sell in a difficult market are obtaining entitlements to boost their property's worth. "In a bad market you've got to add value," Drovdlic says. This kind of planning accounts for half of Quattrone's business, up from about 20% a few years ago.

Fact is, property owners who started zoning land in the late 1990s reaped huge windfalls when the market took off a few years later. Those who waited to get started on the lengthy zoning process missed their opportunities later.

Quattrone estimates the real estate market will start turning in 2010. "I'm hoping toward the end or the middle of 2009 people will realize there is a light at the end of the tunnel," he says. Land prices already are down 50% from their peak - when there's a sale. "I don't think it's going to get cheaper," Quattrone says.

Fortunately, Quattrone says his company didn't have a single client or area on which it was overly dependent for the majority of its business. "We didn't have all our eggs in one basket," he says.

For example, the firm is busy with civil engineering for the City of Fort Myers Housing Authority and East County Water Control District. The public sector accounts for about 20% of the firm's work today. "Like everyone else, we're marketing to public agencies a little more," Quattrone says.

Still, most of the work Quattrone does is for private companies. It has performed civil engineering for Volvo and Toyota dealerships, Reliance Bank's Fort Myers headquarters, a 250-acre industrial park and three 100-acre residential subdivisions, among other projects.

Quattrone says his firm needs to do more to market itself in the downturn. During the boom, there was so much work that he didn't have to. Now, he's putting signs on buildings, considering an advertising campaign and hoping the newly built headquarters projects an aura of stability.

Learning to delegate

A New Yorker who still speaks with a hint of his native staccato Long Island accent, Quattrone graduated with a civil-engineering degree from the University of Florida in 1994. The Gainesville firm that he interned with during his college days gave him his first job opening an office in Lehigh Acres.

That first work experience establishing an office from scratch would lay the foundation for building his firm later. "There was a lot of sink or swim," he recalls. He learned how to bill clients, manage overhead, buy advertising and manage people.

Quattrone's goal was to be self-employed by age 30. "I'm a big believer in setting goals," he says. There were big hurdles: he had limited funds, student loans to pay back, a one-year-old son with another child on the way and a new house.

But Quattrone scraped together his meager savings, borrowed from friends, maxed out his credit cards and bought a small company in 2000 that was originally started by Michael Morris, who later founded a competing Fort Myers engineering firm called Morris Depew & Associates. He renamed it Quattrone & Associates.

Quattrone, whose experience was mostly in water systems, got a crash course in land development and planning. "Needless to say, the employees were nervous about their new owner," he recalls.

But the company had about 100 clients and was profitable from the start. When Quattrone became the new owner, he immediately gave his employees a pay raise and instituted a work schedule that required nine-hour workdays Monday through Thursday so they could take off Friday afternoons.

Since that time, Quattrone has plowed money back into the company, growing it to 13 employees serving more than 300 clients. "That's why I don't have a Porsche yet," he laughs.

The acquisition occurred at a fortuitous time because the real estate boom was just getting underway. Still, Quattrone says he was careful not to grow the company too fast. In a way, he couldn't because the company only had 3,000 square feet of space before moving to its own more spacious headquarters earlier this year. "That worked out as a blessing," Quattrone says looking back. "It made us more efficient."

During the boom, Quattrone had the discipline to turn down some jobs to focus on existing clients. Meanwhile, he demanded his staff wear many hats. For example, in addition to being the planning director, Drovdlic also designed and built the company's Web site.

At the beginning, Quattrone worked 60- to 70-hour weeks, doing everything from engineering to billing and other tasks. But as the company grew, he had to force himself to let go of some of these. "Delegation was a huge challenge," says the hands-on president. "You gradually realize you can delegate more if you have the right people."

He's also made more time for his personal life. A couple of all-terrain vehicles outside his office testify to a mud-splattered weekend of fun with his son.

And Quattrone has a goal when he turns 40 in two years: Get into development. If the market recovers as many think it will, his timing could be perfect.

REVIEW SUMMARY

Company. Quattrone & Associates

Industry. Engineering

Key. Small engineering firms can take advantage of new opportunities if they're agile.