How practical is it for someone who is not a professional surveyor to own a surveying company?
I have a small civil construction outfit and I have an opportunity to acquire a small surveying company. As much money as we pay to surveyors over the course of our projects, that type of vertical integration seems appealing. I have a deep understanding of how the business model works but I do not have much understanding for the surveying process itself. I have employees that know a LOT more than me about most of what we do in construction, I just wonder if surveying would be so different? I suspect that there are very few surveying companies in which the owner does not have extensive surveying background, but maybe it could be done? Any input would be appreciated. Thanks for reading.
Depends on the surveying company and what their business model is and what you want to do with it.
I know of one survey shop that is owned by a large construction company, which is then owned by a larger construction company and everything works well for them but they only do in house layout and associated tasks.
There are occasionally qualifications that require a license at the top I believe but that is for DBE type stuff, there is no legal reason for a license to be at the top that I know of, that said I would want to have a surveyor involved who knows the business side if chasing outside work was in the offing.
The situation is controlled by the State BOR that your business is in.
For Texas, you have to be involved with the surveying company and can not simply be an investor to have controlling ownership.
Call your State's Surveying BOR for details and explain the situation and include the location of your present business and the location of the Surveying business and if you will move it to your present location or not. Be open and honest with them as leaving out any of the details could bring you problems in the future. I am sure that they will let you know how to correctly make it work.
I would think that from an investor's view a surveying company might not be the best place to put your money if you're looking for better than average ROI. What that leaves is people in related industries that benefit from having an "in house" surveyor firm. In primo aspectu that is good business for the owner not having to "get in line" with other clients and realizing a return on profits. There are several national engineering/ surveying firms that are owned by larger development corps.
But what I've seen in my career is there will always come a time when a fly gets in the buttermilk. Non-professional owners have a money based agenda. When something comes up that doesn't smell right their instinct is to plow ahead with little concern over what they may feel is just 'details'. I've seen it happen.
Years ago I was employed by a large asphalt producer/construction company. My main task was supervision and layout of large highway jobs. As the years rolled past the owner wanted to get into real estate development. In my naivety I agreed to work as a "satellite" firm owned by the construction company. To make a long story short the owner had big plans for a large piece of ground that was in the flood plain. Without my input it was decided all that was needed was some creative documentation to magically raise the property above the minimum elevation without moving a tablespoon of dirt. All they needed was my magic wand...
It didn't happen and my career there soon ended. Just one of several instances.
Let me ask a question. If a law firm owned a survey company that dealt only with their clients, do you think the owners would allow you to perform your surveys in a pragmatic and equitable manner?
I love it. They take some of my clients and I only get the good ones back.
Make sure you hire two Surveyors that are licensed, if you just hire one he can hold you over a barrel, and if he ever quits or you fire him, your Survey firm is dead in the water till you hire a new licensed Surveyor.
That being said, yes there are quite a few Surveying companies where the Owner is not a licensed Surveyor. There are plenty of Surveyors who are great at Surveying, but lousy at business models. If you can hire one of those Surveyors, show him where he can do less work with payroll, biding jobs, etc.. and make more money you could have a winning combination.
It would depend on the owner, the Licensed Surveyor and their relationship. As long as you understand that the bottom line is NOT the deciding factor on strictly surveying decisions. Of course economics must play a role in the business of surveying, but NOT in the determination of decisions concerning the location(s) of corners and/or lines.
As much money as we pay to surveyors over the course of our projects, that type of vertical integration seems appealing.
In other words, "surveying is expensive and the workers in the field don't make that much, so somebody's making a fortune. It might as well be me. "
I don't think so.
And A. Harris is right. I think most states forbid this and for good reason. Surveyors are unbiased so its a conflict of interest.
It is not at all unusual here, and it generally works well. The PLS feeds the PEs and picks up clients as well.
I hear a lot of talk about why it doesn't work. In the end it's usually the people, not the model...
In Florida, anyone can own any business if they have a licensed employee(s) to handle the specific tasks required by statute. And there are plenty of surveyors that would jump at the position you offer. Be prepared for some large expenditures initially with respect to new equipment, and an above average salary for a professional Land Surveyor. In your locale find out what Management Material type surveyors earn and go from there. Practically all developers/constructors have their own survey division. Bottom line might not increase at first but it will in the immediate future. Plus you now have the luxury of having a surveyor immediately available on site to resolve the multitude of minor problems that always pop up during construction. If you can manage a construction company you should be able to manage divisions within easily. I would go for it. 😎
Not legal in New York, so probably not practical:) I forget percentage but might be 50% or more ownership has to be licensed surveyor. Had a call once from some investor wanted me to be part owner of a firm he purchased at bankruptcy new york city area. I wouldn't have to actually do anything, just receive a 10k check every year or something like that. Ethical violation or valid investment? I passed (and sent his contact info to state board), but wonder if he found someone eventually.