Contractor Profile - Russ Becker, Beck-Reit & Sons Ltd.

“Mamas don’t let your babies grow up to start construction companies,” could be the first line of a country song about new small business failure rates. Five years after starting, the share of mining companies remaining alive is nearly 15 percentage points higher than the fraction of construction businesses still in operation (52.3 percent versus 36.4 percent). This is based on the Census Bureau’s Business Dynamics Statistics which comes from a longitudinal database of businesses that government economists created by linking together annual administrative records, for example unemployment filings.

Enter Russ Becker, owner of Beck-Reit & Sons Ltd, a successful construction company that is in its 15^th year of steady growth. Having discovered a passion for dirt bikes at the age of 8 and picking up running and mountain biking in the last few years, you get the sense that Russ is a guy who is comfortable with taking on challenges. In an industry that is experiencing increasing competition and has a high rate of failure he has developed a business model and approach that work. Below are some excerpts from my interview with Russ:

Tell me a little bit about how you got started?

My partner and mentor, Norman Reitmeyer was a plumber by trade, who became a very successful federal government contractor.  Norman invested his construction profits in development projects in the San Antonio area; I worked for Norman for 6 years before we started Beck-Reit and Sons, Ltd. in 1999.  We focused on infrastructure work for state and local agencies as well as the construction of our development projects.

Norman was a wealth of knowledge in banking, bonding, contracts and understanding the risks of the construction business.  Norman and I parted ways in 2004, I am very thankful for his impact on my business.

 

What have been some of the unique projects you have worked on?

One of the first federal projects that I worked on, was a US Army military contract in Tooele, Utah.  We were building storage facilities for the government’s chemical weapons incinerator. They were destroying stockpiles of VX nerve gas. I remember getting issued with an antidote syringe antidote that had an 8-inch needle you were meant to inject in-between your sternum in the event of a spill.  That will get your attention. 

Recently we developed and built, the Solutions Oriented Living (SOL) subdivision in Austin, Texas.  SOL is a 40-lot subdivision 3 miles from the Capital in East Austin.  The houses built in SOL, are Net Zero capable, being able to produce as much energy as they consume, through solar power, passive design features, and new building technologies.  The biggest lesson we learned at SOL, was timing; we broke ground on the project just as the real estate market crashed in 2008.  Having a $1M plus development loan, and trying to sell houses in a market with a mortgage industry in collapse, will also get your attention.  Fortunately, we had a very unique product in the market, and that pulled us through the crash.

Why did your company succeed where a lot of others have failed?

Without a doubt it has come from finding and developing good employees. I have spent a lot of energy and effort working with my employees.  It is important to have people in your company who are well educated in the business, understand your clients and look and act professionally. It is important to me to take care of my people and make sure that they can build a career at my company.

I think that in the construction industry your people differentiate you.  If you don’t invest in your people you can’t keep good employees and end up becoming a revolving door with no stability in your business.

For example, Henry Fitzgerald Sr. (Big Henry) and his son Clay, have over 50 years combined experience in bridge construction. The Fitzgerald's, have taught me a lot about how to work with the Texas Department of Transportation who has become our biggest client.  The Fitzgeralds have become leaders in our company, with a can do spirit and a will to win.  Their potential would never be realized without giving them opportunity to succeed or fail.

How have you found great employees?

I have been lucky to hire people who have hardworking family and friends. Most of the people working for me are kin to one another. Basically, I bring someone on and give them a lot of autonomy – it is a ‘sink or swim’ approach with a close eye on results. The folks that have a ‘can do attitude’ end up making it work and doing very well with our company.

Finally, what do you think are the biggest challenges you face and where do you see the industry going?

One of the biggest challenges has been the big jump in costs over the last ten years. For example when we first started I could buy a Cat Backhoe for around $40,000 new. Now that same piece of equipment today is going to run me over a $100,000. Costs have gone up for just about everything from equipment, materials and overhead so it is really important to get your costing right when you bid jobs.

You also have to be really good at logistics – moving people and equipment to and from efficiently. In the last 15 years we have only done two to three jobs in Austin where we are based. The rest of the jobs have been across the state. 

As far as the industry goes it is becoming more competitive every day. You are seeing more unfamiliar names bidding each job. This makes having strong customer relationships and a reputation for doing good work at a competitive price essential.  We are thankful for opportunities that have come our way and most important we know that we are only as good as our last project.