Small Businesses, Big Results: Advanced Technologies Incorporated

by Ryan Miller

By Barrett Baker

Owner: 100 percent Employee-Owned Company
Founded: May 1988
Location: 875 City Center Blvd., Newport News
Number of Employees: 70

Advanced Technologies Incorporated (ATI) provides engineering and fabrication services in support of the aerospace industry research and development projects, including wind tunnel models, full-scale aircraft mock-ups, models and training devices, composite rotor blade development and prototype air vehicles and components.

Based on the nature of their work, the pre-qual to Advanced Technologies Incorporated chose Newport News as their home in 1972, due to its proximity to NASA Langley Research Center, in addition to Army, Navy, Air Force and Coast Guard facilities. The founders discovered that the rural area provided a pleasant living environment with multiple professional installations requiring higher-skilled workers.

ATI arose from the ashes of that original startup that was bought out by a larger business, who made it a publicly traded company. A few years after the buyout, a group of key managers proposed a leveraged buyback that was unsuccessful, so they turned their energy toward starting a new business. It was a rocky start for the ATI as the new company was sued by the prior company to restrict competition and interrupt startup efforts. That also made financing difficult with pending litigation, so the new founders had to provide their own personal funds in order to move forward.

“It is very difficult for a small business startup to penetrate the aerospace research and development market and compete with established subcontractors,” says Toby Roberts, Vice President of ATI, who worked for both Boeing and Lockheed before moving to Virginia to start a small business as a subcontractor to NASA Langley. “After 16 years of previous experience, the professional reputation of the new business owners provided initial opportunities, and our lower cost structure earned contract awards. So, we knew the product had to be of high quality, delivered on schedule and at a lower cost to penetrate the market and establish a performance record.”

The strategy obviously worked. Beginning with six key employees who were all partners, the company has generated more than $230 million in revenues over the last 29 years. Five of the six founders have retired, and the company became 100 percent employee-owned in 2000.

“The Employee Stock Ownership Plan was formed to provide a means to transfer ownership from individuals to the company without selling to a third part,” says Roberts. “The ESOP has operated successfully for 16 years and provides our employees with a retirement benefit not available from the majority of small businesses. The ESOP provides a financial benefit to employees, as well as an incentive for long-term employment and commitment to the company.”

Photo by Jim Pile

Roberts recognizes that the benefit of being a small business is that operations can be managed by a few key personnel who provide both administrative and technical input. He also knows that a small business can be more efficient and react to changes in business activity as needed.

“The aerospace R&D industry has unique schedule demands, and meeting delivery dates is critical for long-term business success,” he says. “ATI’s management committed to meeting contract delivery schedules and would not accept a new contract if we could not deliver on schedule. Over the years, ATI’s performance and reputation have provided additional business opportunities. We will do whatever it takes to support our primary customers and deliver on schedule.”

With so much experience under his belt as an owner of a small business, Roberts has some great advice to pass on to others thinking of jumping into the fray. “Based on personal experience, running a small business company requires major dedication, hard work and long hours. You need to have a passion for your business and need to thoroughly understand the business you are in.”

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