Challenges abound for new companies

Rich Shock and Kreg Mebust have nearly five decades of landscape design experience between them. However, after founding Sage Green Design in mid-2009 during what many call the worst construction downturn since the Great Depression, Shock and Mebust both have taken second jobs in order to weather the downturn.

Shock works for the Nevada Department of Transportation, while Mebust teaches night classes at Truckee Meadows Community College. Although both men still put in time at Sage Green Design, growing the company has taken a backseat in lieu of earning steady paychecks.

Working second jobs is just one avenue owners of new construction companies have turned to in order to keep revenues flowing into their households. Other companies founded during the downturn say they have managed to turn a profit by utilizing home offices and existing client contacts to land a share of the low volume of construction work in the Truckee Meadows.

Shock says it's such slim pickings for landscape design that working a second job just made sense.

"We still have a business but, I think it's possible it could go either direction," he says of continued operations for Sage Green Design. "We are out there in a position where we can take on projects and can evolve as the ability to get work evolves."

Sage Green Design landed nearly thirty commercial and residential projects over the past year, Shock says, as well as fulfilling contracts left over from their former company, which went bankrupt. However, the volume of work has remained relatively small, forcing both men to seek outside employment a direction they never thought they'd have to pursue.

Shock says it's the biggest change in the construction market and design industry he's seen in a career that spans 30 years.

"Even two years ago I don't think I would have foreseen it," Shock says, "but you have got to be flexible and make adjustments to make your life work."

Other newly founded companies say keeping overhead low and nurturing existing client relations are the main factors in their economic viability.

Mike Railey and Derek Wilson founded Rubicon Design Group in February of 2009. Both principals formerly worked at a well-established Reno design firm that folded in June 2009.

Railey says working from home offices has allowed the company's principals to draw higher salaries.

"Not having a big fancy office is one thing for us that has really helped the bottom line," Railey says. "Instead of paying rent we are paying ourselves money that would go to rent."

Expanding their reach into green and renewable technologies, as well as widening their geographical scope, also has resulted in work netted for Rubicon Design Group.

"Expanding into rural areas has helped a lot," Railey says. "Before we would turn our backs on rural areas in terms of us looking for work because there was so much work coming in that you couldn't keep up."

Railey says it's also critical to exceed customer expectations in both performance and price. The firm many times has bid jobs under budget rather than at budget in order to exceed client expectations.

Some of Rubicon Design Group's key jobs include revamping plans for the oft-discussed Legends Bay Casino and re-filing for a special-use permit for casino developer/operator Olympia Gaming, and completing a master plan rezoning project for Crosby's Lodge at Pyramid Lake.

The work from Olympia Gaming came to Rubicon as a result of existing relationships at their old firm.

"Derek and I have been very fortunate considering how down the market is," Railey says. "We have managed to survive. I won't say that we are beating work away with a stick, but it could be much worse.

"Things are going about how we anticipated," he adds. "We knew starting up in this economy it was going to be hard, so we purposely made projections low. We have been able to at least exceed them."

Existing client relationships are the main reason why Rick's AEC Reprographics has managed to stay afloat, says owner Rick Derringer, who founded the business in April of 2009 after his longtime employer, Carl's Blueprinting and Instruments folded in 2008. Derringer had worked at the shop for 15 years, and was encouraged by his wife to strike out on his own.

"Knowing a lot of customers is what really helped us," Derringer says. "My wife worked for an engineering company, so she also knew some people; otherwise, there is no way we could have made it.

"If somebody was to start this type of business and not know anybody, I don't think they could make it, especially in this economy."

Reprinting construction blueprints accounts for a great deal of revenues at Rick's AEC Reprographics, which is located at 1909 Prosperity Street right next to the old Carl's location. Derringer managed to secure the old phone number for Carl's, a boon that still helps him land work.

"Getting Carl's old phone number people still didn't know they were out of business," Derringer says. "I just had two good phone calls looking for Carl's and got a couple of jobs from them."

Derringer employs three people, plus his wife, Deovon. Derringer says going out on his own, especially during a severe economic downturn, made him nervous, but his wife has been a rock of support.

"She has always told me I would do well on my own," he says. "She was very supportive and I didn't have fears of opening a business."

Rick's also has kept overhead low by avoiding any advertising. The shop relies on its customers to spread word of its services. Avoiding large capital expenditures also has helped. The Derringers funded their business investment themselves, saving money by purchasing printing machines off eBay and from an auction at Carl's Blueprinting.

Still, it's been hard to plan for the future since income has varied greatly month-to-month.

Other construction-service companies have completely re-worked their business model to survive.

Rob Wellman, managing member of Stone Canyon Products, which provides architecturally shaped foam to the construction industry (the company provided all the columns, arches and decorative caps to the Peppermill fa ade remodel), says his company began diversifying into providing packaging foam as new construction in northern Nevada dried up.

Stone Canyon now takes in about 60 percent of its revenues from packaging foam, and an additional 30 percent from casted foam-core limestone products, another new avenue of business. Cast limestone products include fireplace mantles, and wall columns and caps.

"It is vital," Wellman says of the new product lines. "We would be gone if we didn't do it."