Tuesday, July 15, 2008

Meet One of the Luckiest Contractors Alive...Bob Fortney

Fortney & Weygandt, Inc., headquartered in North Olmsted, Ohio, is a national account general contractor for the commercial construction industry.


Celebrating its 30th year of business in 2008, the company generated nearly $200 million in revenues last year on projects ranging from commercial, retail, restaurant, and lodging to healthcare, multi-family, and institutional.


Owner and founder Bob Fortney met recently with Fred Ode to discuss the secrets behind his company's longevity and success. Topping the list is Fortney & Weygandt's commitment to technology and innovative solutions.

Fred: Fortney & Weygandt serves a range of market segments. What do you like most about what you do in construction? What excites you? What is frustrating?

Bob: I'm one of the luckiest guys alive. I was put on this earth to do what I'm doing.

Fred: Obviously, you love your work.

Bob: I haven't worked a day in 30 years. Nothing is hard if you love what you're doing. You know when I first started this business, I knew everything there was to know about everything... and I grew probably about 1,000% a year since then. Now I realize how little I know about anything. So I'm constantly learning, constantly seeing things differently, and refining things. But to do what I am doing… I'm lucky and I'm blessed. I'm doing what I was put on earth to do.

Fred: What kind of work do you do exactly?

Bob: We do a whole slew of general contracting work, from retail to what we call "roll out work," which is old-time family restaurants, assisted living, education, anything other than industrial and single-family residential. And we do it all over the country.


Fred: Do you subcontract almost everything out, or do you have some self-performing?


Bob: I carry about 150 carpenters on my staff, but we subcontract out the vast majority.


Fred: I understand that even nationally you're on the leading edge with web collaboration and online tools. Can you talk about that and other initiatives that have helped to separate you from the competition?


Bob: Well we've been working on it a long time. We actually started http://www.constructionbidding.com/ , which is where we have private specs up on the web, about ten years ago. And we were, in my opinion, probably one of the first people in the country to put private specs up on the web. We did it before any of the blueprint houses or Dodge or Builders Exchange, or other people. We put together a system that allows subcontractors and suppliers to go on free of charge and download plans, specifications, and get notifications and communicate online with our systems. We were the only user of this system.

At one point in time, we were going to put it up for public use, but I made the determination pretty quickly that I'm a contractor, not a retail salesman of this stuff. So we use it only internally. Between the two sites - that is http://www.constructionbidding.com/ and http://www.fwprojects.com/ - which are both extremely similar, we average about 150,000 hits a week.

Fred: Maybe you can elaborate a little more. I understand where you put the blueprints up and the bidding, but don't you run your projects off this?

Bob: Well, we have other systems that we use to run projects. We have a system called SuperView, which is what all our superintendents use to do all of their recording and day-to-day paperwork and coordination of schedules. Basically, 100% of their communication is done through a synchronized computer system. Unlike most of our systems, this is not web-based - it's intranet not Internet - so that superintendents working at remote sites can work on it without being linked to the web. And then at some point in time, usually daily, this information synchronizes with our office. Everything they touch gets uploaded and everything we have for the superintendent gets downloaded into his computer. And that system has been in place about ten years. It's gone through several different upgrades, but it's been in place for about ten years. It is still state-of-the-art for projects and things like this throughout the corporation. Anybody who's live on the site can get whatever information they need quickly. And it can tie into their specs as well.


Fred: Do you have any plans for the future involving technology?


Bob: Right now, as we speak, we're in the process of bringing our website up to date. And we are re-doing http://www.constructionbidding.com/ to bring the technology up to date. We just finished an upgrade on SuperView, and I have a three-person IT team here that is constantly writing and upgrading and working on programs that we have internally and that we've developed over the years. Besides the programs just mentioned, we also have what we call FW Main, which is basically our estimating and internal project management software that we developed ourselves, and several other programs that have been designed over the years and need updating.


Fred: What else do you think separates you from your competitors in your market?


Bob: It's our entire attitude. We look long-term, not short-term. We work really hard in developing clients, learning how to meet their needs. You know every client is different and has different hot spots so we work pretty hard to learn those hot spots and establish ourselves as a part of a team. Just like Foundation Software is a partner with your clients, we try to be more than a contractor that people go out and check jobs, jobs, jobs. We want to be a team of construction professionals, much like they have a banking professional and a legal professional and a software professional. We want to be their construction professional.


Fred: Do you have a lot of established relationships, then, with customers?


Bob: We have a lot of established relationships with customers, including CVS/pharmacy, Applebee's, and Darden restaurants.


Fred: And that's a bread and butter aspect of your revenue generation you would say?


Bob: Quite a bit of it, yes, is repeat business.


Fred: Fortney & Weygandt is very successful, and you've experienced tremendous growth over the years. So the company has adapted well to changes in the industry. I guess my next question is twofold: How have you seen the industry change? And how did you manage to adapt to those changes?


Bob: Well, 30 years ago when we started this business, if all of a sudden you had a job with drug testing, you wouldn't have anyone on the construction site. The entire industry has changed in terms of safety and workforce over that time. Besides technology, I've seen a lot of changes that have occurred in construction technique and things like that. The reason I think we've grown so much is that most contractors develop themselves a niche, and their niche is generally one field within a certain area. - hospitals in Greater Cleveland, or Cuyahoga County retail, or something similar. We have a mass multitude of areas of construction, and we handle it nationally. So when Cleveland is dead, we don't work in Cleveland. We work in California, or Massachusetts, or Florida, or Tennessee or wherever. And when restaurants are slow we build hotels, and when hotels are slow we construct multi-family homes or retail or some other market segment. And in doing this it allows us to escape the ups and downs of a particular niche in a particular area.


Fred: So that begs the question: How are you able to adapt? The reason people create their niche is because they wouldn't be able to switch gears like you have. How did you manage to not only move within different niches within the same region but even leave regions and go into different areas, then adapt to the different structures and the different geographic marks? That's a major challenge.

Bob: I've got a good staff. Fortney and Weygandt is not Bob Fortney. Fortney and Weygandt is Bob Fortney and 200 other people. I've got a good staff, we work hard with them, they work hard with us, and over the years we've been able to develop together. It's not something that you can open the doors tomorrow and do. We've been working at it for 30 years now, and we kind of have it so that we understand how to do it and how to be successful doing it. But we don't, as a general rule do it for the mom and pops. We do it for the national accounts. We do it for the people that want to have a relationship with a professional contractor, and they want to have it nationally.

Fred: That makes sense. So if you were to advise someone… say 23 year-old Joe comes up to you and says, "You know, I want to do this and I've got some good experience." What would you tell him?

Bob: I would give the same advice that I give to my kids. Don't do it because you think you're going to get rich at it. Do it because it's what you love to do. You have to love what you're doing, and if you love what you're doing then you find a way to make money at it. But first and foremost, you have to love what you're doing. Once they determine this is what they want to do, my advice is to have a very, very, very good understanding of your costs and know how you're going to do on a job financially. So I would say to know your costs and to always remember that a good job lasts a short time, but a bad job lasts forever. Always remember to service your clients, be professional, promise what you tell them you're going to do, and then do it.

Fred: Since you're talking about knowing your job costs, when did you first use technology to help with that?


Bob: You'll like this... When we first opened up we bought a computer, and it was back in the day before Foundation Software or any other accounting programs for contractors was available. I went out and I hired a programmer to quasi-write me a job costing system, and I think I paid this guy $40,000 or $50,000. He designed this job costing system and he puts it in this computer, which was a pretty good piece of equipment back then. So basically, we put in two plus two and this thing just chugged and shuddered and smoked and everything else, and finally after three minutes it came up with the answer: three. At which point in time that program got shelved. And it took a few more years to get this thing through, but we tried to be as technologically advanced as technology would allow us to be. We've become more and more able to do so in the last ten to 15 years. Today we use ViewPoint, and we've been on that for eight or ten years.


Fred: Yeah, that's a good application, particularly for a contractor of your size. One last question outside of any comments you have. What do you think are the greatest challenges in the industry today? Not necessarily just for you, but for the industry in general?


Bob: Finding, training and holding on to good employees is number one. Learning how to adapt to the changing habits of the people you're dealing with is probably number two. I mean understanding their strengths and weaknesses and finding what they're looking for. And, number three I would say is dealing with the price fluctuations and escalations of weak subcontractors and vendors. In my opinion, within the state of the construction industry, you've got a small percentage of construction professionals, and you've got a lot of weakness out there. Many subcontractors and suppliers are weak because they just don't have the money, or they're far too busy to focus on being professional or financially strong.


Fred: I do find that a lot of subcontractors just don't realize that there's another way, a better way. They think they just do a job, and they don't realize they're a business. You talked about one of the most important things: knowing your costs.


Bob: That's right. You simply cannot run a construction business if you don't have any idea if the company has made or lost money for the year until the accountant tells you in March.


Fred: Can you take us back to 1978? What did the company look like then?


Bob: We started the business, Bob Weygandt and I, with $250. Bob Weygandt, after five or six years, decided that he wanted to be out of construction and get back into the architectural field. I've been the sole owner for about 24 years.

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