It has been a long and winding road for Miguel Galarza, the president and founder of Yerba Buena Engineering and Construction, to find ultimate success for his company. The road has taken him from humble beginnings in 2002 as a small startup construction firm in San Francisco to achieving award-winning success while growing the company to sales of more than $30 million. During this time, his company completed the Small Business Administration 8(a) Business Development Program and exceeded the DBE Program size limits to“graduate” from the program. This level of growth came with opportunities to open satellite offices in cities like San Diego, California, and Salt Lake City, Utah, in the process growing to more than 125 employees and working in a variety of industry sectors.
However, at what seemed like the peak of the mountain, Galarza recognized that his goals were changing and that running a company of this size was not all it was cracked up to be. So, he decided to revisit his goals and determine the optimal size for the company for profitability, enjoyment and happiness for his family and employees. This revelation allowed Galarza to step back, re-assess and reorganize the company for optimum efficiency and even greater success. “I had to think about why I was doing it – was I doing it for the people who work with me in the company or for my ego,” Galarza said. Galarza began a strategy of scaling back the company to streamline its services and to reduce its market area 100 miles from the home office in San Francisco. While this change resulted in less revenues, profitability soared. “It’s not about the gross, it’s about the net,” Galarza said. “I found that we are making more money at $7 million than we were at $30 million.”
The change also made his employees happier to stay close to home and not have to live away while completing jobs outside of the greater San Francisco area. Galarza remembers that traveling to complete projects in other areas was exciting at first, but as he and his team members got older, the excitement of being on the road was not the same.
Yerba Buena’s business now focuses on providing civil and heavy construction services to government agencies around San Francisco. Approximately 90% of the business is construction and the other 10% is engineering services for construction projects. The company has built a strong niche in designing and building urban trails for clients like the National Park Service and other municipalities. “Our jobs are a little more artwork than construction, because we are working within the parameters of the landscape and determining how we can facilitate bringing the public into space so that it is an enjoyable experience,” Galarza said.
One of those projects is a current federal Hub Zone contract with the National Park Service to restore walking trails leading from the back of the Fort Mason National Park to the Ghirardelli Square and Fisherman’s Wharf area. The park is the site of a former U.S. Army Base that sits on a mountain overlooking the Pacific Ocean, and the walking trails were once used by soldiers to move down to the shore. The trail has become dangerous over the years due to noxious weeds overgrowing the passage, broken concrete in the walkway and stairs, and damaged walls. Yerba Buena is restoring the trails by restoring the landscaping, building a new walkway, and installing ornamental railings and stairs. “It’s a showcase project and one of those jobs that your grandkids will say ‘my grandad did that job’” Galarza said.
Galarza named his company Yerba Buena to acknowledge the history of the San Francisco area and to identify his ultimate mission for the company. “Yerba Buena–loosely translated–means good grass,” he said. “This was the name the original Spanish settlers gave to the area when they landed here because of the minty effervescence of the mossy grass that grew on the shore.” Galarza says he wants his company to be known for turning bad landscapes (bad grass) into great landscapes (good grass) to live up to the meaning of the company name.
Yerba Buena is an active member of the California Chapter of the Associated General Contractors, and Galarza is a current member of the AGC of America’s Diversity and Inclusion Committee. He joined the national committee in 2018 after Yerba Buena was honored as AGC’s Diverse Business Enterprise of the Year for its ongoing success and its long-standing commitment to Diversity and Inclusion.
As the company has found its optimal place in the market, Galarza has created the time to give back to the industry and especially to other Hispanic businesses that are seeking success. He served as a mentor for the Stanford University Latino Business Initiative Education – Scaling Program; a program with the mission to empower Latino entrepreneurs to build billion-dollar businesses. Galarza participated in the program’s onsite executive education program for Latino businesses in 2017 and has remained involved through membership in the Latino Business Action Network (LBAN).
Galarza attributes much of the success of Yerba Buena to a strong team of employees who are committing to doing business the right way and giving back to the community. “I share with the team the importance of turning square corners and not rounding off the corners,” Galarza said. “Although you may make less money and everything is not always win-win, you are able to go to sleep at night and you don’t have to worry about a knock on your door.”
It is this commitment to doing business with integrity that has allowed the firm to maintain an extremely low turnover rate and allowed employees to grow with the company. “Many of my team members have been with me for many years and have grown with the company, so I do this not only for me and my family, but for them as well,” Galarza said.
The growth and success of Yerba Buena has been a dream come true for Galarza. The dream started when he was 18 years old and working as a laborer in the construction industry. During his morning breakfast he read a newspaper article about a Latino firm from San Francisco being selected as contractor of the year and it gave him an idea that maybe one day, he could also build a successful contracting firm. “That planted a spark that maybe I could do that one day,” he said. Although it took several years before he was ready to launch Yerba Buena Engineering & Construction, the newspaper article made the dream seem possible for a young Hispanic man.
With his dream fulfilled, Galarza is now focused on preparing the next generation of the Yerba Buena team to take the firm into the future. His daughter is a rising leader in the company, and other long-time team members have grown to greater responsibilities in the company. This type of growth and success makes Galarza even more proud than the accolades Yerba Buena received for being one of the fastest growing companies in America. These accomplishments bring greater profitability and greater fulfillment. He hopes this also will inspire other Latino-owned companies to follow his example.