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Clarification
In the 12-24-09 issue, the Review reported on the resurgence of Heidt Design in Tampa Bay. The story neglected to give credit to Buddy Henry for his role in the company's recent success.
Is now really the time to open an engineering firm on the Gulf Coast of Florida?
Leaders at Heidt Design think so.
Part-owner Pat Gassaway goes even further: “To me, it's a perfect time to start.”
Citing conversations with both clients and colleagues, Gassaway is confident the market is on its way up, and the bottom is behind us. But does growth — in this case, very slow growth — automatically justify market entry?
Even if the bottom has happened, is there room for a new or returning firm?
A backlog of project work worth $2 million in revenue can dramatically impact the answer to that question. And it's precisely what's bringing Heidt Design back to business.
Of course, beyond that backlog, Heidt Design isn't just any new entrant into the engineering field. It's the so-called “2.0” version of Heidt & Associates, a former veteran of Tampa's construction scene that closed its doors in September after more than 60 years of operation.
Many Gulf Coast residents will recognize the Heidt name. But while $2 million in projected revenues has re-opened the doors for Heidt, it's not enough to have prevented major changes to the original business' core.
At its peak in a “frenzied” 2005, Gassaway says Heidt & Associates generated $30 million in revenue and had 300 employees. Just two years later, despite its market share having gone up (as other engineers were shutting down), revenues had shrunk to $14 million.
Heidt & Associates had downsized to 76 employees when it finally closed its doors on Sept. 6, 2009.
The effort to bring an engineering company named “Heidt” back to business began 10 days later. Then called Smart Design, the new firm emerged with 16 of those 76 employees.
The 16 were carefully chosen according to the backlog of work that brought Heidt Design back into the fold. And now that the company has retooled, Gassaway says former clients of Heidt & Associates are breathing a sigh of relief.
They're relieved because of how things work in the engineering industry. When jobs exchange hands, new engineers not only have to understand the project they're taking on — they have to be able to recreate it.
For clients trying to change engineers, “There's a backward step,” says Tim Plate, a 21-year veteran with Heidt & Associates. That backward step can be costly.
It's a feature that makes that $2 million in existing contracts a lot more valuable. And it's a part of what made re-opening Heidt an easy choice — not just for ownership, but for other important business partners, like the Bank of Tampa.
Working with the Bank of Tampa was an early priority, says Gassaway, as a result of conversations with Art Andrews and Buddy Hall, both former owners of Heidt & Associates.
In fact, Gassaway says Hall's very first instruction was to call Bill West at the Bank of Tampa. Hall told him it was “the only relationship bank” in the city.
West was glad to hear from Heidt Design's new ownership, and quickly realized the two parties were a match. “We want to bank with owner-managed businesses, and professional firms — they are both,” he explains.
He also recognized the potential upside in working with a company whose name has been around for decades. Says West: “That name has value.”
With a financial relationship established, the early-stage business plan is in place: utilize the talents of 16 employees to collect $2 million in revenue on projects from existing relationships.
But what next? How will Heidt Design grow the business in the next few years?
As an engineering firm, Heidt Design is heavily involved in the early stages of construction and development. Their involvement often focuses on the process of entitling, which is one of the first steps in working through government approvals that makes land useable for future development.
Gassaway says there's an emerging market in the entitlement industry that could boost Heidt Design's business. That market: working with area farmers to prepare their land for sale.
Many Gulf Coast landowners that used to live outside of the area's urban centers are now seeing development come closer and closer to their properties. It's motivating them to prepare for a future sale.
As an example, Gassaway cites an entitlement job involving a “comprehensive change” procedure for 22,000 acres of land.
As Heidt Design regains momentum, look for agricultural entitlement to lead the way. It could be the first of many small steps in the push for another 60 years of doing business under the Heidt name.
— Alex Walsh
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