Most businesses shoot for the moon and many wind up plummeting back to Earth.

At Koga Engineering & Construction, the owners at one time had similar goals of truckloads of million-dollar jobs and huge profits. But company officials painfully learned over the years that the highs also will come with deep lows and that it's difficult to adjust to both.

Success, they learned, isn't always measured by the amount of money made. Sometimes too much is not good and turning down jobs can be a positive thing.

"It takes a lot of discipline to say no," said Glenn Nohara, Koga Engineering president. "It's like a kid in a candy store — contractors with jobs."

For the past 13 years, Koga Engineering has had the philosophy of keeping an even keel, taking on jobs that company executives know they can do and turning away from the high-profile jobs that they can't manage.

The philosophy has proven successful as the company normally averages about $24 million annually in contract revenue. Last year, Koga Engineering brought in about $36 million, but could have taken in more if it wanted to.

"The key is to be on the lower end, so in case (the industry) tanks, we can still survive without drastic layoffs and downsizing," said Nohara, 55, who has been president since 1992. "What we've tried to do over the last 13 years is to kind of stabilize that. We try to keep it stable."

The shift in business approach followed tough times in the 1980s when the company was on the brink of bankruptcy. Malcolm Koga, company founder, said his company "had some difficult projects and we had some labor disputes, and when things go bad, everything started to happen."

Koga and Nohara looked to right the ship and adopted a business philosophy developed by W. Edwards Deming. The statistician was instrumental in the recovery of businesses in Japan after World War II and his emphasis was in developing a management system that uses statistics and data to govern decisions.

Once the complicated system was in place, Nohara said he noticed certain patterns, particularly periods of highs that were followed by troughs.

"We have always had data, but we never had it in a form that would make it clear to us where our strengths and weaknesses are," Nohara said. "We go back every year and we look at our projects, which types of projects, which sectors, which clients we were successful at, versus just going shotgun and going for volume. It's more important to know what the crews are capable of doing."

The company's success was acknowledged this year by the U.S. Small Business Administration, which named Koga and Nohara as the state's "small business persons of the year."

When Koga founded the company with his wife, Carol, in 1973, the two did everything themselves and brought in $700,000 in contracts. Today, Koga Engineering has more than 100 employees, but the Kogas continue to operate the business like a mom-and-pop shop.

"My initial business plan was to grow at a steady rate. I was looking at maybe $2 million$5 million in annual sales, but somehow we made a quantum leap," said the 67-year-old Koga. "My idea also was to start a company where everyone would be part of a family. My thing that I preach all the time is that if you get the wife of the guy that's working for us on your side, this guy will never leave."

Nohara and Koga said the firm's success did not come without the help of City Bank, now Central Pacific Bank, and suppliers and employees that stuck with them through tough times.

"Hawai'i is a small community, too, so our vendors are also our friends, so we don't want to go there again and put our friends in that kind of situation where we have to ask for extended credit, because they have businesses to run also and payrolls to meet," Nohara said.

Nohara said he hopes the company will continue to be stable, even as Koga Engineering goes through an ownership transition. The Kogas will stay on as heads of the company, but Nohara and vice president Dennis Okazaki will be retiring in 2010 and be replaced by current managers.

"The new group are our key employees. Most of them have been with us for the two downturns so they have the similar philosophy that they want to maintain our niche market," Nohara said. "When we did the first transition, it took a good five years for me to learn my new role and for the bank and the surety company to be comfortable with the new management team and that we are business-savvy."

Reach Curtis Lum at culum@honoluluadvertiser.com.