- March 20, 2015
Founders/owners: Neil Simon and Stephen McKenna Jr.
When founded: October 2011
Initial investment: $20,000
Sales: $3 million
Sales projected for 2013: $12 million
Fun fact: The company's first project won a Pinnacle Award from the Lee Building Industry Association this year.
A construction rebound was no sure thing in October 2011.
Homebuilding was starting to pick up, but commercial construction remained weak. Still, Neil Simon and Stephen McKenna Jr. knew instinctively they should start their Bonita Springs-based commercial construction firm, EnviroStruct. In past economic cycles, commercial construction always followed residential building by 18 to 24 months.
“I think we were spot on,” says McKenna. “We were pretty happy with the timing,” agrees Simon.
But looking back, they're not sure if they would have made it if they had launched their company in 2010 or earlier. Simon, 37, president, and McKenna, 38, vice president, had good jobs working for DeAngelis Diamond, a well-regarded commercial construction company in Naples. “We leaped into it,” says McKenna.
Fortunately, commercial construction had reached the bottom in 2011 and new projects were coming up for bid. In its first year, EnviroStruct posted $3 million in revenues. “Now it's over that for the first quarter on the books,” says Simon.
McKenna and Simon never really subscribed to the notion that there was zero commercial construction work available. “There's always been work out there,” McKenna says.
EnviroStruct got off to a great start when it won a prestigious Pinnacle award from the Lee Building Industry Association in 2012 for best commercial contractor project for a renovation of an existing structure.
The project, a renovation of Sandcastle Beach Club in Fort Myers Beach, was EnviroStruct's first client as a young company. “We've invited them back with our back building to complete our second phase,” says Adam Cowles, the resort's manager.
Florida lifestyle beckons
Simon and McKenna both got their start on large commercial construction projects in northern states where they were raised.
“What are we doing freezing in Chi-Town?” Simon says he recalls telling his wife, referring to the nickname for Chicago.
While he was overseeing construction projects such as a Trump tower in Chicago, Simon always dreamed of starting his own firm. “To start a business in Chicago is really hard because of the unions,” he says. “It was all about who you knew.”
By contrast, the cost of starting a company in Naples is considerably lower. Simon and McKenna estimate they've spent about $20,000 of their savings to start EnviroStruct, not counting their hours. “There's more room for a young, ambitious company down here,” Simon says.
Both men moved to Florida and went to work for DeAngelis Diamond during the boom years of the mid-2000s, lured by the construction extravaganza in Southwest Florida. “More money, nicer weather,” says McKenna, who was a project manager in construction at Philadelphia International Airport before moving to Naples.
But as Simon and McKenna started working on projects together, they realized they both had the entrepreneurial bug. “There's a lot of people who just want to come to work and collect a paycheck,” says McKenna. “We have the same ethics.”
It's not unusual for entrepreneurial employees in construction companies to start their own firm. Indeed, the founders of DeAngelis Diamond did the same thing to start their company, splitting off from Naples-based Boran Craig Barber Engel. Simon and McKenna say they made a clean break, too.
But Simon and McKenna both have young families and they were taking significant risk. In particular, McKenna has a child with cystic fibrosis. He sold one of his cars and moved in with his mother-in-law for a short time until he was certain EnviroStruct was on sound footing. “We took a major pay cut,” Simon says. “It's worth the sweat equity,” McKenna adds.
When they launched their company, Simon and McKenna established good relationships with their subcontractors. Subcontractors are a great way of finding out what jobs are available, McKenna says. “We had their full support,” Simon says.
Simon and McKenna say they're competitive because their overhead is low and they take care of their subcontractors. “We pay our subs early,” McKenna says. “We get some good pricing next time around.”
The duo says they picked the name EnviroStruct because of their sensitivity to environmental issues. Increasingly, customers are demanding adherence to construction standards that include recycling and energy conservation, they say. The owners also don't want to be pigeon-holed into specific kinds of projects, saying diversification is key to future sales.
Sandcastle Beach Club, a timeshare complex on Fort Myers Beach, was their first client. “The elements have ravaged this place over 32 years,” says Cowles, the resort's manager.
Cowles says the timeshare resort was open while EnviroStruct was doing the renovations at the height of the tourism season from November 2011 to February. “I have over 1,479 owners of all the weeks I have at this timeshare and I haven't had one complaint,” says Cowles. “These guys were great to work with.”
At another project, EnviroStruct rebuilt the gatehouse of Audubon Country Club in Naples after a garbage truck plowed into it. One of the requirements was that the gate be functional while the company was rebuilding the gatehouse, says the community's general manager, Steve Pietrzyk. “The other contractors panicked when we said that and the price went up,” he recalls.
By contrast, Pietrzyk says Simon and McKenna didn't have such concerns. “You had this feeling that they were going to get it done and get it done right,” he says.
Certainly, the reputation they earned at DeAngelis Diamond helped Simon and McKenna's credibility. “It sets you apart from two guys in a pickup truck,” McKenna chuckles.
Simon and McKenna know they'll have to hire employees if the firm keeps growing the way it does. At this pace, EnviroStruct could hit $12 million in revenues next year. “The biggest challenge is finding people who think like you,” McKenna says.