When his daughter was born in 2006, Devon Henry decided to leave his corporate job at GE so he could be closer to home. He also made the decision to buy a small construction business with big potential. Since then, Henry has grown the renamed Team Henry Enterprises from four employees to 62 and now pulls in some $20 million in annual revenue—thanks in large part to doing business with Uncle Sam.
Team Henry is a certified 8(a) and HUBZone business—designations the government makes that, in some cases, allow such disadvantaged companies to win contracts without having to compete for them. Using the 8(a) program as a foundation to build from, Team Henry, which is based in Newport News, Virginia (with several satellite offices), now works on both government and private-sector contracts, managing road construction, mitigating wetlands, and setting up emergency shelters for FEMA, among other projects.
An OPEN Forum reporter recently caught up with Henry to find out what inspired him to get into the construction world, the challenges he's faced while growing Team Henry, and what advice he has for other entrepreneurs about growing a government contracting business of their own.
How did you make the decision to get into government contracting?
I started my career in corporate America. But when my daughter was born prematurely at just 1 pound, 12 ounces, it gave me the motivation to be closer to home. I had been traveling so much and always had an entrepreneurial spirit—and I found a way to cure both urges.
How did you accomplish that?
I had the crazy idea to buy a small construction company that had been around for a while. I thought that between my academic background and my business acumen, I could take it to new heights. So I used all the money I had saved up to buy the business and moved it from Portsmouth, Virginia, back to my hometown of Newport News, Virginia.
What was the name of the business you bought?
It was called The Silty Lady. It was involved in supporting road-building activities like erosion control and putting up silt fences. Hence the name. But I wasn’t a lady and people were always confused by the name, so I said, "Yeah, we’re going to change that."
You mentioned that your education and business background played a role in your decision. What skills did you have when you made the leap into entrepreneurship?
I got my undergraduate degree in biochemistry and my master's in environmental management. I then worked for GE, where I was enrolled in the corporate leadership program, which was an amazing business training ground.
Interesting. But your new business wasn’t doing any federal contract work yet, correct?
Right, it was doing more work with local governments. But I recognized that we might be able to find a niche on the federal side. I applied through the Small Business Administration to get a HubZone certification as well as an 8(a) certification. That was part of my business plan, as to how we could differentiate ourselves in the federal market.
Did that help you land your first contract?
We were certified as an 8(a) business in March 2009 and we landed our first contract in August 2009. We were fortunate because I believe, on average, it takes most folks up to two years to get their first 8(a) contract. But that certification only gives you access to an opportunity—you still have to work hard to market yourself and let the government know who you are and how you can help them.
What kind of work did you land on that first deal?
The first contract we got was with the National Park Service to deal with some invasive species work up in Tennessee. It was a sole-sourcing opportunity, which means we didn’t have to compete for it, which a business can be eligible for if it's part of the 8(a) program.
Sole sourcing is a big advantage that 8(a) companies can have. But it only lasts so long. Have you worked to diversify the kind of work your firm gets?
Definitely. You hear so many horror stories about companies who graduate from the 8(a) program and then go out of business because they weren’t equipping themselves for the next phase. We have been aware of that. As we have grown, we have wanted to grow outside the federal space as a way to not be as dependent on those 8(a) contracts. Today, our 8(a) contracts make up less than 50 percent of our total revenue.
How have you diversified?
We have worked to develop relationships outside of the federal government with state agencies like the Virginia and North Carolina departments of transportation. But we’ve also developed great partnerships with commercial businesses like Dominion Power. We’ve been very strategic about our growth and have also been careful not to grow too fast without the proper infrastructure in place.
Is the downside of growing too fast the fact that you might not be able to do everything you say you can do?
Absolutely, because having a good reputation in this business is huge. It’s everything. You have to be very mindful of how you are performing, because you’re only as good as your last project.
But it’s a bit of a paradox where, for new firms, it can be hard to build up your reputation if you haven’t got your foot in the door yet, right?
That’s true. It’s like when you go looking for a job after college and everyone tells you that they can't hire you until you have experience. But how do you get the experience if they don’t hire you? For us, it was important that we weren’t afraid to work as subcontractors for prime firms as a way to get familiar with the paperwork—the Federal Acquisition Regulation and navigating through the different agencies.
Was there a big turning point in the business when you finally felt like you had made it?
Yes, Hurricane Irene. We had been courting FEMA for a while before they called us in 2011 after the hurricane. We had to go through a very vigorous interview process, because when it comes to emergency response, you have to prove that you can react fast and efficiently. They were a little uncertain about our abilities because we didn’t have a lot of experience performing that scope of work in the emergency response environment. But we convinced them to give us a shot.
They gave us what’s called a five-unit mission, which was installing five trailers in North Carolina for folks who had been displaced. We knocked that out, which gave them a high level of confidence in our abilities. They eventually gave us a 200-unit mission where it was a real challenge to manage the cash flow and the work of the subcontractors in such a fast-paced environment. But given the accolades we received from FEMA about our performance, the FEMA representative deemed us to be the best contractor they had ever performed a mission with in more than 20 years. At that point, I thought we might be OK as a company.
Were there any major challenges you had to overcome along the way?
I have definitely made mistakes that unless you were in it, you wouldn’t know to avoid them. One of the biggest lessons learned for me is how important your bonding capacity is when you run a construction business. There are many things that come into play when surety companies determine what your capacity is. We were initially denied a surety bond, which is basically insurance on a construction job in case something goes wrong. That forced us to get our act together and to get organized with our financials in a way that would help us move forward. The talent of your people is also right up there. I learned that your employees can either make or break your business, so you’d better hire the best people and quickly assess those that don't fit into your company's culture.
Is it harder to find good people these days?
It’s definitely cyclic. In 2006, it was hard to find good people. But in 2009 and 2010, people were willing to work for anything. Now, it’s turned back around. But we rely on our company culture to help retain the people we have and to recruit others who want to join us in the work we do.
What advice might you have for an aspiring entrepreneur out there who wants to get into government contracting?
There’s been a big shift where everyone moved from the commercial space to the government market. That means it’s very crowded. If you want to be successful, you need a focused strategy. Whatever you’re selling, find out who is buying it. Also find out who else is selling it and who is buying from them. Be strategic and find out how you can differentiate yourself. It’s going to take a lot of hard work and many times it doesn't happen over night but if you execute your plan and work hard, success is an option.