Bob Andelman's Article Archives: Construction Firm Survival Tips (Tampa Bay Business Journal)

(This story originally appeared in the Tampa Bay Business Journal in March 1994)

Two common sense rules explain how the Tampa Bay area's most successful construction firms survived the late 1980s and early '90s: 1) Stick to what you know. 2) See No. 1. Tom Empric, president of Walbridge Contracting Inc. ($114.75 million in 1993 local revenue) in Tampa, remembers what happened when the company tried circumventing the rules during a tight market. "We tried to enter a market in which we did not have experience -- jails," he says. "We hired an individual to present our services to the state and counties. We failed because we didn't have a portfolio of jail experiences." That was enough for Empric, who was entirely persuaded the public markets were not his company's best bet. "We stayed out," he says. "The margins on public projects were too low. We stayed focused on health care and multi-family where we had a successful track record." Few of Empric's counterparts admit taking less than successful paths during the recent recession, but no one denies competition increased dramatically and for a few, times were tough. "Certainly, the past two years have been difficult," says Roger Jennings, president of Federal Construction Co. ($22.4 million) in St. Petersburg. "But did we do anything different? Fundamentally, no. There's always an opportunity for a quality contractor. There's been fierce competition and there still is." Federal was purchased in 1988 by London-based Trafalgar House, PLC, an international construction entity with strong expectations of its Tampa Bay operation. "They want us to grow and we must go outside Florida to do that," Jennings says. "So we have a project in Texas. And we acquired a firm in Pittsburgh." Health care is Federal's primary focus and Jennings chased work in that field more zealously than ever before. "When things get tough you've got to be careful what you do," he says. "You can't present yourself as all things to all people. Why would owners choose somebody who's never done that work before?" Meaning Federal never considered trying, say, jails? "I'd think (Walbridge would have) been able to figure that out around a conference table" long before a representative ever hit the field, he says. "Owners want to be sure the contractor's team is qualified and experienced. They're making the teams show credentials and qualifications. It used to be all you had to do was show up with a proposal and bond. Those days are over." One guy who didn't sweat the recession: Randy Simmons, president and CEO of R.R. Simmons Construction Corp. ($23 million) of Tampa. How did he survive? "By hoarding our money in the early '80s," he says, laughing. Simmons' bread and butter business has been working directly for end-users while other general contractors focused on the endangered species of developers. "A lot of those guys took it in the teeth," he says. "We focused on owner-occupied buildings for Solomon Brothers and Johnson & Johnson. Those people didn't leave the market like spec developers did, so when everything else dried up we still had a core business." If anything, over time, Simmons says he's become more picky about jobs, even when it meant passing on work. "We figured out a long time ago we could not be everything to everybody," he says. "That's tough for contractors who are volume-driven. But in order to satisfy our clients, we had to be here when the tough times were over." That long-term strategy paid off at least once: 12 years ago, Simmons put up a building for Hav-A-Tampa in Sabal Park. When it was time to expand their office space, the company called on Simmons again. "I would rather sit back on our capital base and look for the right opportunity," he says. "Dogs chase cars. They don't know what to do if they catch 'em. Late in the development crisis, there were a lot of people who didn't know what they were doing." By sticking with what he knew, Simmons stepped up. "If we were good at building warehouses," he says, "we went to the next step and did manufacturing centers. If we did offices well, we stepped up to data centers." Knowing what his company does well and where it fits into the marketplace keeps Lonnie Hawkins' Hawkins Construction Co. ($35 million) in Tarpon Springs on top. "As our reputation grew, we did a lot of work for the same customer base over and over again Ñ Wal-Mart, Publix and Circuit City Ñ and stayed busy with that clientele. We didn't have to get in the trenches with the rest of the troops. We've not suffered like other people." It helped that Hawkins' major retail clients grew during a period when shopping center construction in Florida came to a general halt. But 1990 and 1991 were still less than stellar years for Hawkins, although he never gave up. "We played offense, not defense," he says. "We were aggressive. We didn't let anybody go. We tried to work smarter, more efficiently, and it paid off." One more thing the contractors would put on a list of universal survival rules: 3) Don't spend money on advertising. "I'm always amazed by the contractors who advertise blindly," Randy Simmons says. "When somebody's going to sign a multi-million-dollar contract to build, they're not going to do it off an ad." Contractors differentiate between advertising and marketing. Slapping an institutional ad in a business or trade journal might aid long-term name recognition for the firm, but it's not what closes contracts. "We treat clients right," says Reza Yazdani, president and CEO of G.H. Construction Co. ($42 million) in Tampa. "And we use their references to get more work. We never stop marketing. We constantly market, for immediate construction, for future construction. That way we always have a project coming up. The busier we get, the more marketing we do. Some companies, the busier they get, they slow down on marketing. But a year later, when the projects end, you're out of work." He'll get no argument from Walbridge's Tom Empric. "You need to stay focused on customer relations," Empric says. "It's so expensive to find new customers. When you find one, you have to satisfy his needs so he comes back to you. We concentrate our marketing dollars on people, to make personal contact. Putting out an ad Ñ a lot of people see it, but how many of those people are interested in buying construction services? So our advertising budget is very limited." Yazdani has a survival rule of his own. "I don't play golf," he says. "I have a friend who says, 'Let's go fishing.' I say, if I spend five hours fishing or playing golf, I may lose a job worth thousands! There is no fish worth thousands of dollars. People have to learn to enjoy their jobs, not just their hobbies."