How a St. Paul civil engineering firm has thrived through intentionally slow growth

More than two decades ago, Katie Toghramadjian gathered enough money to buy a laptop as her initial investment into her firm capitalizing on her knack for then-novel civil engineering software.

Toghramadjian didn't intend to hire employees, and only incorporated Isthmus Engineering upon the advice of her mother. She expanded the company from one person to roughly 50 people in 20 years to help take on projects transforming the roads and rails you drive and ride on.

"That's slow growth. That's not rapid fire," CEO Toghramadjian said. "So, we've grown at a pace that we can sustain."

Fortune 500 CEOs can use the words "grow" and "growth" more than 100 times during calls with investors. Isthmus Engineering has flipped the grow-fast-or-go-away playbook to become a 2025 Top Workplace, intentionally expanding at a sustainable pace.

"We have turned down projects time and time again [saying], 'Hey, great. We're glad you are thinking of us for this, but this is not in our wheelhouse. This is not our area of expertise,'" said Toghramadjian, who won this year's leadership award in the small company category. "So, we've been very disciplined about sticking to what we're good at and what we know."

Becoming resilient

Isthmus Engineering's story may be unconventional, but it's salient at a time when bankers are advising entrepreneurs to practice fiscal discipline as a bumpy economy is jostling the small business playbook.

Economic pressure, regulatory challenges, inflation and trade policy shifts are leading to some uncertainty, said Corey Mensink, the director of commercial lending at Sunrise Banks, another Top Workplace.

"It's forcing businesses to be innovating, adapting and diversifying their offerings," said Mensink, also an executive vice president. "And the moves they make now are just going to make them more resilient moving forward."

Toghramadjian wanted a name for her firm that fit Minnesota, she said in Isthmus' St. Paul office. The office has an open floor plan, where Toghramadjian is not assigned an office or even a desk.

She pondered options such as "Lakeside Engineering" and "Bayside Engineering."

Her son, then in Montessori school, pitched "Isthmus," she recalls. She feared people couldn't pronounce the term, which means land bridge. Then she realized that it "aligned so perfectly with the bridging of technology and quality design," Toghramadjian said.

The fuel for the firm was Toghramadjian's early adoption of computer-aided design software. The technology reduced computation time from hours to minutes, allowing civil engineers to test solutions more efficiently.

"A lot of engineering is doing tedious things," Toghramadjian said. "So, if I can find a way to automate the tedious things and really look at the creative solutions behind it, that's where I kind of got my energy from."

Supporting employees

Isthmus started as a one-person consulting shop, with Toghramadjian teaching other companies how to use the software.

Then, these companies started asking her to fill in on projects. As the phone kept ringing, she thought, "Let's try hiring an employee and see what happens."

An intern — who stayed at the firm for 19 years — helped Toghramadjian on her first marquee project: the extension of the Metro Blue Line between the Mall of America and the airport.

Her few employees in the early days worked out of her spare bedroom, on their own or on site with clients. In 2006, Isthmus moved into an office for the first time.

"We kind of grew and invested on pace with our ability to cash flow that pace," Toghramadjian said. At night, when she puts her "head down on the pillow," she explained, she doesn't want to be wondering, "Can I afford to pay this person tomorrow?"

During the 2011 Minnesota state shutdown, projects temporarily stopped.

"I didn't get paid," Toghramadjian said, "But I knew my employees were going to get paid."

Instead of furloughing the employees, she reinvested their time into learning 3-D modeling technology. "That investment 100 percent paid off," she added, as the firm continues using it today.

Isthmus' workforce grew from 29 employees pre-COVID to 42 in 2023, roughly when it upgraded its office space in a Jackson Street building equipped with a second-floor outdoor space hosting happy hours, which workers debate whether to call a patio, terrace or deck.

"Humble confidence is something we look for, so people who can acclimate to our culture, people who are focused on what's good for the team, people who have that intrinsic motivation," Toghramadjian said.

The firm has continued working on high-profile infrastructure projects, recently leading a segment of the Gold Line Bus Rapid Transit project. Employees rode on the segment during the line's recent grand opening, Toghramadjian said.

Amber Nord, a senior associate who has worked for the firm for roughly 11 years, said Toghramadjian is always absorbing feedback.

"She very much does her decisionmaking with the best interests of all her employees in mind," Nord said.

Leaning on help

As she built up her business, Toghramadjian relied on her small-business accountant to make sure she was filing the correct paperwork and help her structure her business.

Mensink of Sunrise Banks encouraged small-business owners to meet regularly with their bank even if they don't need a loan to strengthen funding relationships.

"Be transparent with your banking and funding sources," Mensink said. "You're going to equip them to be advocates and strategic partners for you."

The banker said small-business owners also should "sharpen their financial discipline," creating a budget and forecasting monthly cash flows.

"This is going to allow you to be more proactive and strategic in your approach," Mensink said.

Dennis Welch, a division manager at Frandsen Bank & Trust, another Top Workplace, said small-business owners must be prepared with a well thought-out business plan. He added: "You're putting your whole financial lifeline on the line."

Prospective small-business owners should try to bring up their credit score, Welch said.

"When we're looking at a business, we're not only looking at the business side of it. We're also looking at the personal side," he said. "So when the personal side's weak, it makes it much, much harder to get loans."

Frandsen, who works with U.S. Small Business Administration loans, encouraged business owners to avoid high interest loans. Often, SBA loans require lower equity on the front end and have longer payment periods, he said.

"It's a good way for the bank to mitigate its risk also, which helps us make that loan because we have a certain guarantee behind it," Welch said. Minnesota's Department of Employment and Economic Development provides small businesses extensive resources, such as consultation services.

Mensink said optimism has turned into "cautious optimism" for small businesses, due to uncertainty in recent months.

Toghramadjian, whose business relies on government funding, said she faces some big questions right now. The best thing to do, she said, is "stay the course."

"We can pivot if we need to, but let's not sabotage ourselves," Toghramadjian said.