Professional qualifications and niche expertise can position small firms for growth.
For small engineering firms, business development presents a unique set of challenges. With limited staffs and budgets, approaches such as mergers and acquisitions, adding service lines, or expanding into new states are not always feasible. So how can a smaller firm compete and grow in an increasingly consolidated and competitive industry? Valerie McCaw, P.E., CFM, DWRE, ENV SP, president of VSM Engineering LLC, a civil engineering firm in Kansas City, Mo., believes that leveraging professional engineering credentials is key to growth, both for individual engineers and engineering firms.
McCaw launched VSM as a solo venture. “When I first started, I didn’t have enough money to get a certificate of authority. It was just me,” she said. “I contacted the state board and asked what I could do that would be legal, and they let me know that in Missouri, you can hang out your shingle as a licensed engineer as long as the state can identify you by the firm name.” Following her first year in business, McCaw had enough work to apply for a certificate of authorization (COA) in Missouri.
Today, VSM provides planning, design, analysis, construction plans, and construction management for municipal infrastructure projects in Kansas and Missouri. McCaw credits the firm’s growth in part to her commitment to professional credentials, licensure, and qualifications-based selection (QBS).
The P.E. license and career growth
As a past president of the Oklahoma Chapter of the National Society of Professional Engineers and long-time member of the American Society of Civil Engineers (ASCE), McCaw is a strong advocate for professional licensure. “I’m very careful about licensure, especially given my involvement with the professional associations,” she said. “You have to walk your talk.” Yet McCaw also firmly believes in professional licensure as a means of managing your professional destiny.
“I tell young engineers, ‘You want to design your career. You want to design your life. You want to be in a position to make those decisions.’ I’ve seen people who don’t have a P.E. who are capable and competent, but they can’t do what they want to do because they don’t have the license,” McCaw said.
Ultimately, licensure provides important quality controls to the public. “The whole point of registration is to protect the public,” she said.
Firm licensing and business development
At the firm level, licensure is also key to growth. “As a consulting firm, you generally either grow by adding service lines or adding geographic range to your practice,” McCaw said. “Yet to expand geographically, you often need another licensed engineer involved in the firm, and with a smaller family-owned firm that can be a problem.”
Without a COA, firms are prohibited from offering services in 37 states, and many COAs require involvement of an in-state licensed professional. McCaw is currently licensed in Missouri, Kansas, and Oklahoma, and her firm is registered in Kansas and Missouri.
“I’ve looked at a couple of other states where opportunities come up, but there are administrative paperwork aspects, and costs, too. A lot of firms are expanding through mergers and acquisitions (M&As). But we’re still small enough that M&As are not a viable strategy for us right now.”
McCaw has also considered adding new services to the firm’s offerings, which currently include municipal engineering, project management, stormwater analysis and design, transportation, sanitary sewer design, water line design, and subsurface utility engineering. But adding a new licensed specialty, once again, would require bringing in a licensed professional.
“Often, highly qualified professionals are interested in starting their own firms, rather than working for someone else,” McCaw said. “We have our strategies for expanding, but there’s no quick and easy path.”
Developing a specialized niche
To date, VSM has found growth and success in a challenging market by developing deep, specialized expertise within McCaw’s field — hydrology/hydraulics and utility coordination. “Specialty certifications are increasingly important lately,” McCaw said. “It helps with marketing and enhances the value we can bring to our clients.”
She holds specialty certifications including certified floodplain manager (CFM), diplomate – water resources engineer (DWRE), and Envision Sustainability Professional (ENV SP). Her specialized expertise has allowed the firm to work on groundbreaking projects such as designing the first blue roof in Kansas City for Gallerie, a mixed-use living space slated for completion in late 2018.
QBS as a growth driver
Another factor that has contributed to VSM’s growth is QBS. ASCE has advocated for QBS as a means of helping small firms compete by privileging their unique capabilities, niche market expertise, and knowledge of local regulations and business practices. For VSM, this has held true.
“QBS does help sometimes by letting us demonstrate our niche market expertise,” McCaw said.
Yet to compete in the QBS environment, a firm needs to be selective about opportunities and present a standout proposal. “There are so many intangibles in the QBS selection process; any firm has to be rigorous about the go/no-go decision to even participate,” McCaw said. “We need to make sure that the perception of our firm is correct before the proposal stage to ensure that QBS selectors will even open the proposal book. A flawless cover letter is extremely important. I see it as a ‘why you should hire us’ letter in one page within their specified format.”
QBS also provides an opportunity for the client and the firm to establish an accurate scope. “I think QBS is very important because the scope of a project needs to be defined, and clients come to you with different levels of engineering knowledge,” McCaw said. “With some of the larger cities, our clients are engineers; while in a smaller city, we might be working with a city administrator, and they aren’t experienced in writing scopes of work for engineering. The scope is essential to ensure that the client gets what they want and what they need.”
VSM is a testimony to the value of growing a niche through expertise, credentialing, and pursuing projects through a process that puts qualifications first. To McCaw, that emphasis on quality lies at the very heart of the profession.
“People throw the word engineer around because they want credibility,” she said. “I’m very deliberate in how I use that word.” By emphasizing her firm’s niche expertise and professional qualifications, McCaw has positioned VSM for profitable, sustainable business growth.
Christian Haring is an account executive at Harbor Compliance (www.harborcompliance.com), specializing in professional licensing for engineering, architecture, and construction firms. With a focus on mid-sized and large firms, Haring understands the need for precision and clarity in managing multi-jurisdictional licensing. Contact Haring at 717-298-8128 or firstname.lastname@example.org. Note: Harbor Compliance is not an accounting or law firm and does not provide tax, financial, or legal advice.