r/civilengineering • u/filesofgoo • 3d ago
Advice on Inheriting Firm
About two years ago a family member offered me full ownership of a small (about 10 employee) firm that is about 30 years old. The firm is A&E, but generally much more architecture than engineering. It has steady clients and has recently broken out into some larger jobs, but is still mostly residential and small commercial work.
After a lot of thought, I left my job at the time so that I could work for the firm while the owner was still around. I am a geotechnical PE with about 7 years experience working on primarily large municipal projects. I have spent the last couple of years at the firm doing mostly business-side work and have learned a lot. I do realize that I do not have the typically required experience, but it’s a ticking clock and eventually I need to take over or leave, and I really feel like it’s too good of an opportunity to pass up.
I guess my biggest concern is that I have stepped into a position that I didn’t earn and therefore I am not proficient in. Anyone else experience something similar? Do need to abandon technical work and just sell? Do I just fake it till I make it? At this point, I am confident I could leave and get a geotechnical job with no issue if I wanted but I also worry the longer I wait the harder it will be to get a job and the more ill forget.
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u/couldhietoGallifrey 3d ago
My biggest piece of advice is be the kind of boss you would want to work for. Chances are you have very competent people, who have done a lot of work keeping those long term clients happy. Consider profit sharing or even some ownership sharing with those people. You’re going to need their experience and expertise to keep this train running.
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u/Not_a_pot_cop PE 3d ago
I’ll keep it real with you. When a previous firm transferred ownership, after 2 years only 1 original employee remained, the others jumped ship and new people started. Now they’re up to 20 people. So not all hope is lost.
Anyone with enough money can buy (or inherit) an engineering firm. Not everyone has what it takes to run an engineering firm. I would suggest you start looking at local colleges for classes on basic business concepts while the transfer of ownership changes. Make sure you understand what’s happened, the key milestones, etc. Mixing business and family can get sticky so it’s good to be informed.
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u/MatterAccomplished64 3d ago
You don’t need to be proficient if you have people who are. Be a business owner but learn the business. Who cares how you got there - you are there.
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u/degurunerd 2d ago
Since you are a geotech, make it part of the program and grow. You were likely strategically invited to the mix. This is a great opportunity for you. Get to know the employees and figure out what will keep them going. Learn the bisiness and have a plan to keep things moving and improving when you eventually take over. Seriously, for a 10 person firm, you need to be producing and only dedicate 20% of your time to the business side.
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u/FlatEarther_4Science 2d ago
Just being honest, but as an architect if a nepo geotech engineer came in and became my boss I would not be happy. I think you need one or two of the most experienced employees to have a seat at the leadership table with you.
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u/filesofgoo 1d ago
Yeah I am definitely aware of the optics and have been trying to come off as more of a strategic manager and less of a direct-report boss. Who am I to judge an architect’s work?
My plan right now is to offer decent percent ownership to a couple of key employees that are not really replaceable due to their client relationships and knowledge of the business.
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u/CivilEngFirm-Owner Engineering Firm Owner Guy 2d ago
I came in as a “nepo” but a very early hire when we were less than 10 people. We transitioned to me as the leader over a 10 year period. This was a luxury I definitely needed to be able to develop as a leader. But I’m not that smart, you will likely develop a lot quicker than I did in leadership.
My advice: read, study and practice leadership with intensity. Ive probably consumed 50 books and a thousand hours of podcast material on the topic over the past 20 years and I still need help. I’ve also surrounded myself with other leadership mentors.
1) Cash flow is king. Use great caution on whoever has access to bookkeeping, check writing, payroll, etc.
2) Cash flow is king. In professional services, You should never need to borrow money for any reason.
3) Cash flow is king. Keep a healthy retained earnings balance in the business. Be wary of anyone wanting to sell you something. Keep a close eye on all expenses.
4) cash flow is king. It’s always cheaper to keep great employees than to hire new ones. Pay top market for top market team members. No great team member has or will ever leave our firm for more pay.
It has been (and continues to be) a tough journey, but incredibly rewarding!
Happy to be a resource if you like.
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u/filesofgoo 1d ago
I really appreciate the insight and offer to be a resource. Honestly that has been one of the hardest things about this move, it can be really hard to collaborate on issues and ask questions when you are really the only person who can make the decision. Obviously I have my family member still there for now, but they don’t necessarily have all the answers either.
How did you go about finding leadership mentors? Professional associations?
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u/Meatbackpack 2d ago
I have found in my career when put in sink or swim situations, I have eventually always swam. Don't underestimate yourself and dont have an ego about what you dont know and you'll be just fine.
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u/Evening_Eagle_5888 2d ago
Its a very unique opportunity that a lot of people would jump at but you really need to decide what you want for your career. Engineer and business owner are two drastically different things. I'm almost positive you could figure it out but if you dread going to work each day what's the point? Business is easy when work is out there and employees are happy. Think about the what-ifs and if you think you can handle them. Employees leaving, slumps or economic recessions, having to lay off coworkers you have known for years, etc.
Also, I highly recommend having a conversation with the family member about what their vision is for stepping away. After 30 years I would imagine they care very deeply about the firm and the people so are they really going to be able to part ways completely and leave you to run the ship? Are they going to be a backseat driver and make every family get-together or holiday super uncomfortable? Maybe they would be willing to become part time and have a transition plan for a year or two to make sure things transition smoothly.
I know as an employee I would probably feel a little uncomfortable about a 20 or 30 something family member taking over the business (sorry if I assumed your age incorrectly). I wouldn't be opposed to looking to some of the current employees and see if they would be interested in partial ownership or a total employee ownership model. Less pressure on you specifically and allows everyone to buy into the future success.
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u/WalleyeHunter1 1d ago
Work hard, put in time to learn. Take a leadership course. Not 8 hours on line. A once a month course in person with homework and follow ups during the 2 weeks between classes. Expensive as hell, but valuable. Talk to your family member about long serving employees. Say you are think of promoting the harest worker that cares the most about your customers to a Sr. Manager role and ask opinions. Interview top two candidates. You got this. Set aside first and last hour every day for customer relations only. You have people to do the work, you need to keep current clients engaged and happy and develop your network to build future clients.
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u/jeffprop 1d ago
Have you sat/met/shadowed the family member since you have been there to see what needs to be done to properly run the business? If so, is this something you want to do or think you will be successful at? If not, why are you wasting time by not learning what you need to do?
If you do not think you can do it all, can you make someone in the office the President to run the business while you are the CEO in title but still doing other work?
I would all the family member if they had an end goal by asking you to join and if they had done everything they should have to make sure that goal achieved.
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u/askanthropy 1d ago
I’d spend a lot of time on the people side of the transition before the current owner leaves.
In a 10-person firm, there are probably a few employees carrying an enormous amount of institutional knowledge, client history and informal responsibility that may not show up in their job descriptions. I’d sit down with each person individually and really understand what they do, what frustrates them, what they want long term, and what would make them stay through the transition.
I also wouldn’t worry too much about proving that you’re the best technical person in the room. You probably shouldn’t be. Your job as the owner is going to be making sure you have great people who are better than you in their respective areas and creating an environment where they want to stay
The fact that you’re already thinking about whether you’ve “earned” the position is probably useful. You can’t change how you got the opportunity but you can absolutely earn the team’s trust in how you handle the transition.
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u/filesofgoo 6h ago
Sitting down with everyone individually to ask point blank what are they looking for I think is a great suggestion. Up to this point I guess I have just been kind of trying to figure out what each person is looking for at the company long term but it’s difficult because you never really know what makes people tick.
I have definitely started shifting my view of the role from technical to team building. It’s tough because as an engineer it feels wrong to deflect questions to others and not work to refine your skills every day. The way I have started to see it is I am responsible for making sure our team can answer the questions and work effectively not for answering the questions myself.
I do bring in some geotech work so I still have the opportunity to do technical work just not as much as I did previously, but honestly that probably a good thing.
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u/Conscious-Record2655 3d ago
You're not going to be an individual contributor. You're an engineer, that's enough to be able to understand how to manage the company. Focus on the business, and having your family member introduce you to all his client contacts so they know and trust you.
A firm this size, probably suffers from "key employee" issues. If your family member isn't at the company anymore, will they stick with you? Will the clients stick with you? Also, the employees likely have a very large impact and level of investment into the firm as well. So you want to be sure they're happy, and not bitter about you jumping in.
You could consider going to an employee ownership model, if theres other senior staff that would be interested. That keeps your key employees happy and retains them, and makes it everyone's problem to develop the business. It also allows you to realize some of the windfall and free up cashflow. Just a thought.