(FORTUNE Magazine) – Amid the deepening oil slump six years ago, three engineers in Houston sat in front of their drafting boards worrying about their jobs. Today Paul E. Redmon, 39, William G. Higgs, 41, and Felix W. Covington, 46, design drilling platforms for oil majors around the world. Innovative and efficient, their Mustang Engineering has grown into one of the hottest oil field engineering firms on the Gulf Coast, with revenues that should approach $30 million this year. The story is a lesson in how hard times can force bold decisions. Redmon, Higgs, and Covington, employees of a firm called CBS Engineering, had talked casually about starting their own company. They were sure they could work better, faster, and cheaper than others in the business, including their employer. ''The big guys were conservative,'' says Covington. ''They wouldn't take on something they hadn't done 30 times before.'' Adds Redmon: ''They had way too much overhead, as many managers as workers.'' The three had worked together for seven years and, says Higgs, ''We made a pretty good team. But if you have a responsibility to your family and a paycheck coming in, it's tough to cut loose.'' As the oil business slowed, they watched CBS hire men who'd been laid off elsewhere -- ''older guys working for us who should have been our bosses,'' says Higgs. Then the troubles caught up with CBS. ''In about ten months, we went from 118 people to 35,'' says Higgs. ''That's when we decided. We didn't want to look back someday when we were in our 50s and say, Why didn't we try it on our own?'' They spent evenings talking together with their wives about making the break. ''We all knew it wasn't going to be easy,'' says Higgs, ''but they were just real supportive and willing to do whatever it took to help make it go.'' Friday, April 13, 1987, is one of two dates Mustang's founders love to remember. Says Higgs: ''We went down to our lawyer and signed the paperwork that made the company for real. We were walking out and said, We're never going to do this unless we pick a date. Felix said July 4. And we said, Let's do it. Over the July 4 weekend we cleared stuff out of our offices and signed a lease. We gave notice Tuesday and worked two more weeks.'' When they had their first full board meeting with the lawyer a year later, Higgs adds, ''he came out and said he had thought we were really crazy starting when we did.'' GETTING OFF the ground wouldn't be cheap. The partners knew they wanted cutting-edge technology -- computer-aided design and drafting (CADD), for example, in a business where manual drafting was still the norm. But they could borrow only as much as they could fully collateralize with CDs. ''The banks lent us our own money,'' says Higgs. That was $30,000 short of what they needed to finance ten CADD terminals. So they got each designer to buy his own terminal with a bank loan and lease it to the company. With no cash to spare, says Redmon, ''Nobody got salaries until we had cash flow, and we leveraged everything we had to make our payrolls. We counted on suppliers to give us terms and on clients to pay quickly, so we got the work out fast.'' It almost wasn't fast enough. The slump worsened during Mustang's first year, and by fall the company was taking whatever work it could get -- ''mods and revamps, jobs nobody else wanted,'' says Redmon. A friend of Higgs's who worked for the Houston transit authority told them of a new bus maintenance facility that was being planned, and they bid on the contract to provide engineering and drafting services. But how would they persuade the transit commissioners to listen to a bidder from the oil patch? Higgs figured out an attention-getter. ''We knew we would be the last to present, just before lunchtime. We gave each guy a big Snickers bar, saying, 'We don't want you thinking about lunch during our presentation.' The last member of the board was a woman, and we knew from my friend that she was two months pregnant. So I gave her a big Snickers and a little one, too, for her baby. That got a big laugh -- they could tell we had inside information -- and it broke down the wall. Then we sang a takeoff on the Snickers jingle -- you know, 'Snickers will satisfy you,' '' says Higgs. ''We sang, 'Mustang Engineering will satisfy you.' '' Getting the job let Mustang keep several key people on the payroll until spring. That's when the oil business started to revive. Today Mustang employs 280 people -- ''and we're hiring like crazy.'' Clients around the world seek it out for the kind of innovative thinking that produced its ''chopped tripod'' drilling platform, which marries deepwater and shallow water technologies and can cut construction costs 30% vs. conventional designs. It has also acquired a pipeline company. ''Our idea was to build up a good 25-man company,'' says Higgs. ''Our thoughts were a lot smaller than what's actually happened.''