Building Blocks & Stumbling Stones: The Challenge Of Running A Construction Company | Ep. 246

COGE 246 | Running A Construction Company

 

Building blocks shape the foundation of a construction company while stumbling stones reveal the path to success. In this episode, our guest is Oliver Fernandez, a construction company owner that has completed over $100M worth of construction projects. Oliver discusses the building blocks and stumbling stones of running a construction company. He shares his story, of how his parents shaped his path into the construction industry. He shares the exhilarating highs and daunting lows he encountered while building his own construction company, shedding light on the pivotal moments that molded his business. With his transition from a subcontractor to a general contractor, Oliver shares the strategic decision-making and the secrets behind his company’s success. He shares the key takeaways he had during his journey from 20 million to hundred million in revenue. Moreover, Oliver also shares his biggest failures and losses in construction, and how it led him to understand what constructs a thriving construction company. Tune in now and learn the keys to a flourishing construction business!

 

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Building Blocks & Stumbling Stones: The Challenge Of Running A Construction Company

Isn’t it remarkable the influence that our parents have on our lives? That’s what we explore here with Oliver Fernandez. He is a construction company business owner and real estate investor out of Washington, DC. This episode is a very interesting one because I will let Oliver tell his story on how he got into the construction world through the influence of his parents, the ups and downs of starting a construction company, how he learned to cold call when he started his business, what he’s learned about growing his organization as he’s on the journey from $20 million to $40 million and onward to $100 million in revenue, how he shifted from being a sub to a general contractor, and many other topics.

The thing you’ll like about Oliver is that he’s very honest and open about his successes but also his failures. Through this conversation, you are going to get some tremendous insights into how to build a successful construction company. Enjoy my conversation with Oliver and share it with other people. Thank you for tuning into Construction Genius. Let’s dive right in now.

Oliver, welcome to Construction Genius.

I’m excited to be here with you. I love talking about construction. I grew up in construction. Ever since I could remember, my dad had owned a construction company. My mom worked inside the construction company as well. They both were entrepreneurs. I have always been around construction, so when I wanted to start my own construction business, it wasn’t something foreign. It was something that I was a little scared of because when my parents had their construction business, they had made a lot of money, lost a lot of money, went out of business, made a lot of money again in construction, and then lost a lot of money. There was always this rollercoaster ride.

One of the things that I wanted to do when I started my construction business was I didn’t want to go through that rollercoaster ride for a couple of reasons. Number one, it broke up our family. In the first rollercoaster ride when they made a lot of money and lost a lot of money, I moved with my mom and my three sisters to Maine. My dad stayed back to try to pick up the pieces and tried to regrow his business.

That hurt because all of a sudden, the family was broken. All of a sudden, I was living in Maine, which was a rural country coming from Boston. My mom was a city girl, so she didn’t understand living in Maine full-time. Going to Maine on vacation was one thing, but living in Maine full-time was something that was out of this world.

Now we were living there full-time and it was a struggle. There would be power outages. She was a teacher, so she wasn’t making that much money. It seemed like life was so hard. Life was always a struggle. It was weird too. I knew what was possible in this world because I did see my parents when they were successful. Having to go back to living paycheck to paycheck and trying to figure all those things out with my mom was very difficult.

One of my goals coming out of high school and graduating from college was I wanted to take care of my mom and three sisters. That was one of the major reasons for me starting a construction business. When I started the construction business, my eyes are wide open like, “I’m going to be successful in construction,” and then I get hit with the real world. There are a lot of challenges there, and there are a lot of ups and downs.

My first entrance into construction out of graduating college was working for Skanska. It’s a big general contractor. I was working for them for three months and I ended up getting laid off. They gave up on me, but I didn’t give up on myself. I kept sharpening my skills and I started the business. We were doing small jobs in the beginning like $2,000 jobs and $30,000 jobs. It was the start of the business. Now we are doing $1 million to $5 million projects. We completed $20 million worth of business in 2022. We are on track to do $40 million worth of business in 2023.

Let’s go back to the beginning because there’s a lot going on there. Give me your earliest recollection as a child of your parents in the construction business. What are the first impressions that you had of that?

My dad was in the civil games. That was always the excavators, dump trucks, and bulldozers. From a kid’s perspective, I was like, “My parents are awesome.” These are real-life bulldozers and excavators. I could go sit in them. He’d bring me in them. It seemed like I was living in a fantasy world. It was awesome. I was super excited about all that.

At the same time, there’s that component of operations and construction. There’s the component of financial management and construction. When you are a kid, 2, 3, 4, or 5 years old, you don’t understand all that stuff. That’s where he struggled. That’s where there were some failures. There are some things that needed improvement. It costs him the business in the beginning.

Did he go out of business?

He went out of business. I was five years old, so I was going into first grade. I remember because I went in the first grade when I moved to Maine.

There are some memories, but you are not a 13, 14, or 15-year-old. What is it about the experience that your parents had with their business that is now motivating you as you have started your business? What are you determined to replicate or not to do?

It almost gave me this weird perfectionism persona which is not always a good thing. If you want perfection, you are never going to get it. You are never going to start. The perfectionism came from not wanting to ever have to put my family through the pain that we all went through. When we started off the business, the first job we did as a subcontractor that I was running was a $30,000 job. The job ended up costing me $60,000.

If you want perfection, you're never going to get it. You're never going to start. Share on X

What type of sub were you at that point?

I was a civil sub. We were installing underground pipes. In this case, it was a box culvert we were installing. It was in Massachusetts. It was funny that you are talking about a golf course. We were doing it on a golf course. There were two locations where we were installing an underground box culvert. That job took my heart. I lost $30,000 on a $30,000 job because it cost me $60,000. At that point, I was like, “I don’t want to do this anymore. I don’t want to do what my dad did to my family. I want to make money.”

Up to that point, I never lost money on something. At the same time, I watched how that GC communicated with me because my price was $60,000 when I first bid on that job. I watched the way he communicated with me, the way he ran the job, the way he executed it, and the way he communicated with the owner because he was the GC. I took all of those learnings. I’m so glad I didn’t give up at that moment because I took those learnings to now go and complete over $100 million worth of projects in the last few years, and I ran it the same way.

You bid a project for $30,000 but you should have bid it for $60,000.

The job was $30,000. It cost me $60,000, but the first price that I initially submitted was $60,000.

Did he talk you out of $60,000 or something? Did the GC get you to cut your price?

He simplified the job, and I wasn’t confident in my numbers at the time. I was like, “I can do that,” which I should have never done. Those are all the learning experiences that you grow on.

In that first job, you lose $30,000, and then you are observing the way that GCs interact with the owner and with you as a sub. What did you take away specifically from that then you applied to the next project and the next project that helped you to become more successful?

It was the way they set up the job. They were organized. The way they communicated with the owner. Until you have seen someone communicate with the owner, you don’t know what to say and what not to say, things that are going to fly or not going to fly. Getting that experience cost me a lot. At the same time, it was eye-opening. The stuff that I always saw my dad do was he was the subcontractor. He was always talking with another contractor. He was never talking to the owner or communicating with the person that was paying for everything.

COGE 246 | Running A Construction Company
Running A Construction Company: Until you’ve actually seen someone communicate with the owner, you don’t really know what to say, what not to say, things that are going to fly, things that are not going to fly

 

You started as a sub, and you are a GC now. What did you learn about communicating with an owner as a sub? What are some of the key things that our audience who are subs can lay hold of in terms of communicating with owners?

The one thing that I liked about working directly with the owner is you touched the money first. That was one of the things that drove me crazy. We did great work and everything was executed properly, then when it came time to get paid, it was all these excuses and reasons why we weren’t going to get paid the full amount, or additional paperwork that was never discussed and now needed to be submitted.

One of the things is you touched the money first. Number two is the owner cares about the finished product. They don’t want to hear all of the bad things that are happening on the project. They want the sausage. They don’t want to understand how the sausage is made. They don’t want to see all the blood. They don’t want to see all the guts. They just want the sausage.

Even with my team now, I explained that to them. They don’t want to hear about the subcontractor not showing up, the paint supply house not having the paint or the mechanical unit being delivered late or not being delivered correctly. What is the solution and how are we going to get this thing to the finish line? At the end of the day, that’s all they care about. They want the sausage. They don’t want to know how it’s made and all of the stuff. That’s what they are paying us to do. That would be the second most important thing if I was a sub thinking about how you want to communicate with the owner.

How do you maintain your relationship with the GC if you are going to be aggressive in developing a relationship with the owner? Isn’t the GC going to say, “Stop talking to the owner? You need to talk to me.”

If you are a subcontractor, you need to respect that. We have a part of the business that does subcontracts. We have to respect the relationship between the owner and the GC. You got to flow all that information up through them. I wouldn’t cross those boundaries. At the same time, it is important to understand how to communicate with the owner because if you are not getting paid as the subcontractor, you need to be able to communicate that to someone especially after you have already tried to work it out with the GC and you can’t get anywhere with them.

How long were you exclusively a civil sub?

I was a civil sub from 2008 to 2013, so five years.

You started right in the middle of the downturn. That’s a perfect time to start. That’s awesome. That’s funny because you could say I have been through a downturn. It’s not like someone who started their business in 2013 and everything has been awesome for the last ten years.

It was a grind getting projects. Now I have a better algorithm for how all that stuff works with the things you need to do. In the beginning, I had all the trash that I had to still work through. I was scared to make cold calls. I was scared to go to the vendor outreach meetings. I was scared to do all of those things, but I had to work through and build up confidence in myself to be able to make a cold call.

Let’s talk about that. How did you build your confidence to make cold calls?

We had that job that we lost $30,000 on. It was the pressure of almost being at the end of the runway. The credit card was starting to get maxed out. I didn’t want to be a failure. I didn’t want to be narcissistic. I didn’t want to do what my dad did. I wanted to be successful. How do I be successful? I got to start getting in front of the people that are going to give me these types of projects or want to work with me on these projects. I got to start making the phone calls. You then start making the phone calls and you are like, “What do I say?” I created my script and then I would be like, “I don’t want to say that.” I took that out of the script and then I was like, “That worked this time.” I kept that in the script.

Tell me about that script if you could remember.

I will always be like, “This is Oliver with McKENZIE Construction. We are a general construction company that specializes in HVAC and civil construction. Do you ever offer the ability for companies like myself to come in and do a capability briefing?” I said that so many times. That’s still ingrained in me to this day. I have been saying that since 2013. It was like, “How can I get in front of these people?” At the time I also have a partner. This partner had been a GC for 30 years. I was this young kid. I remember meeting him at the airport when we first started making our joint venture.

He’s like, “I’m a GC. I have been doing this for 30 years. I have all my contacts. I’m not going to give you any of them, but if you find some new projects or new contacts, I will help you execute them.” That was all I needed to hear. I would then make those phone calls. I would get in front of these people and then I would bring him with me. I would shut up and let him do most of the talking. We got our first job and then I was like, “Now I understand my role in all of this.” I played that role well but at the same time, I paid attention to the things he was saying. I paid attention to how he was running the jobs because I wanted to also have those capabilities.

That’s interesting. I was going to ask you about how as a young guy, you got a toehold when you didn’t have any experience yourself. What you did at the beginning then is you partnered up with a guy who had a little more experience that helped you to get some work secured.

That’s how you compressed decades into years. You partner with people. He had something that I didn’t have and it was experience, but I also had something that he hadn’t ever seen before. That was the tenacity to make phone calls, get out into the marketplace, get in front of people, and get opportunities. We could apply his expertise to it. Now, all of a sudden, it was a great partnership.

It’s a trip because we are in different industries. I’m a consultant and you are a contractor. When I started my business, I’d gotten fired from this company on a Friday. I started my business on a Monday. At the time, I had a wife and four kids at home. What I did is I got out there and I started cold calling. I did exactly what you did because I was afraid of failure. I didn’t want my credit card bills getting racked up either.

That motivated me. That inspired me. I wanted to take care of my mom and three sisters. All of a sudden, I’m creating more debts than being positive. It was something that motivated me.

How long were you working in that partnership or that joint venture? Was that a formal business partnership or were you guys JV-ing stuff together? How did that work?

We had no signed documents or anything. It was something that we shook hands and were like, “We are going to be 50/50 partners in doing this.” We went after the contracts and we executed them together. We had a great partnership. He showed me how to project manage. He showed me how to speak to the owners, how to communicate, how to talk to subcontractors and hold them and the business accountable or all the owners. There were a lot of good things there.

At the same time, there were some broken beliefs there. Because there’s so much risk in construction, the thought process was always to control all the decisions. If you are controlling all the decisions, you are going to limit the size that you are. What I learned over time was once we hit $10 million and $12 million and then fell back down to $6 million, I wasn’t going to be able to do everything on my own.

If we wanted to be the $100 million company that I wanted this company to be, I was going to have to allow other team members to make decisions, but also make sure that they were making decisions off of a good decision matrix. That’s the single thing that’s helped grow the company, expand the company, and get the company moving in the direction that I have always dreamed of it moving.

It was allowing other team members to make decisions, and execute on behalf of the company, but also stay in alignment with the company. That’s all done through leadership and knowing how to keep them aligned in the business and help grow and scale the business together.

Let’s explore that. It sounded like right from the beginning, you got one thing down that people struggle with, and that’s the sales part or the front-end sales. You partnered up with someone with some experience so that you could learn the project management side. As you grow the business, you came across an issue that every contractor comes across, and that’s finding the right people to put in the right position so that you can achieve your goals. Tell us some of the successes and failures that you experienced in recruiting and hiring people as you have grown over the years.

We do government projects. You got to have certain qualifications to be the superintendent, the site safety health officer, and the quality control manager. I remember the first job that we hit that was of substantial size, it was like $2.6 million, down in Albany, Georgia.

Was it a GC?

Yes, it was a GC. This was a job to replace overhead doors. There were 289 of them that we had to replace.

How did you go from underground to replacing doors?

When we transitioned to being the prime contractor to be working directly for the owner, you can’t just say, “I’m an underground contractor.” You can say that, but you are limiting yourself to this many projects. Whereas now when you are a GC, you say you can do everything. You hire the civil guy, HVAC guy, and overhead door installing contractor. That was also a huge shift in my thought process. I was like, “I’m a civil guy.” You narrow yourself down especially when you are working with the owner. The owner doesn’t care about just the civil. They care about their project being complete, and they want A to Z to be done. They don’t care how it gets done. They just want it done, and they are willing to pay you to execute in getting it done.

COGE 246 | Running A Construction Company
Running A Construction Company: Just narrow yourself down, especially when you’re working with the owner. Because the owner doesn’t care about just the civil, they care about their project being complete and they want A to Z to be done. They don’t care how it gets done.

 

When you shifted from being a sub to being a GC, did you pick government projects as a niche?

Correct.

Are you talking about specific government agencies or specific project types? How did you go through that process?

There were specific project types meaning I wanted to do $1 million to $5 million jobs. Occasionally, when you are marketing for $1 million to $5 million jobs, you catch a trout that’s $400,000. We still did those. We will not going to turn those away. Our goal was to do $1 million to $5 million jobs.

You land this one project where you got the overhead doors. You need to bring people on board to handle that, I’m assuming. Tell us about that process.

I had never even hired people up until this point.

What year are we at?

This was 2013. I was just starting off to be a GC. I spent a year calling the owners and people that could issue contracts from the government. I finally get my second contract, and it’s the biggest contract that we have ever gotten to date. We are on the job where the job is close to starting. We don’t have a superintendent, quality control manager, or site safety and health officer. I’m stressing out like, “What’s going on?”

I thought my partner was going to be able to help more on that side. What I did is I went to the internet, and I started looking up all these crazy sites. There was this one site where you could type in the search. A lot of them do it now, where you can type in “quality control manager” or “EM385,” which are these keywords that the government uses for their people.

I found a list of people and I started calling them. I remember getting a guy that was already working for another company in North Carolina. I don’t know how I got him to come and join me, my company, and this project, but he ended up coming over. I got another guy that was in Kings Bay, Georgia. He had just transitioned off of another contract and was looking for some work, so I got him over here. It was that pressure. There was that timeframe that I needed someone. My sole focus was finding that superintendent quality control manager.

I made so many mistakes in that process. I was like, “I need you guys here,” and they showed up. I had an offer letter signed. I had all those things signed. I didn’t bring them on the way we bring people on now. We bring people on now like, “Are they a cultural fit? Will they be an operational fit? How are they going to impact the business financially?” We are looking at all those three things.

Before it was like, “I got to get him in here, and let’s roll.” Luckily, that project was successful. Those people executed everything they said they were going to execute. One of those people helped groom me in building safety plans and all these plans that are required for government projects, which then helped us get tens of millions of other projects.

It’s interesting you said that because, in the beginning, you were just hiring because you had to. Now you have evolved to the point where ten years later, you are thinking culturally, operationally, and then financially. How did you come to those three specific pillars?

I’m a huge guy in finding mentors. When I first got into the GC game, I had a mentor that had run a $10 million business. My lifetime goal was to get a business that did $10 million a year. I found that mentor and then all of a sudden, after three years, I was 26 years old and had a $10 million business.

How did you find that mentor?

My dad is one of those guys that he’s at the gas station pumping gas and he talks to everybody. He meets everybody. He always has a guy that has a guy. He met this guy at the gym, and then he made an introduction to me because he knew I was interested in that stuff. I met him there and then that was the mentor that helped me get into a government contract, and then also helped me grow my business to $10 million. One of the things that I didn’t do is after I got to that $10 million, there also can be a situation where if that mentor’s goals aren’t continuing to grow and increase, you can almost cap yourself. I was capping myself at that $10 million mark. I then found another mentor that had sold his business.

This is important. You are a young guy. How long did it take you to figure out, “This guy is a $10 million dude? I have made it now and I want to get more than $10 million.” How long did it take you to figure it out not because he is a bad guy but because he’s capping me by his mindset?

A long time. The stuff that I’m giving right now was ten years of bumping my head with pain. There is so much pain there. It’s ten years of agony figuring that out. I found another mentor. This mentor had sold his business for $151 million. He was talking about the team and the personal, professional, and financial goals of your team members. It was foreign to me because my previous mentor always ingrained in my head how much risk we were taking. We didn’t want everybody making decisions for the business because we were going to be paying for that risk. At the same time, that thought process was capping us where we are at.

This new mentor taught me about building teams and how you have to build teams with alignment. That was the reason why my other mentor was nervous about letting other team members make decisions. It’s because there was no alignment. When you can create alignment in the decision-making and understand that there are doers in the organization, thinking in the organization, draining in the organization, and then there’s watching in the organization, the thing that you want is you want doer thinkers and people that are going to be doing off of good thinking. When you find those, you double down with those people. You give those people more opportunities in the business.

You want doer thinkers, people that will be doing off of good thinking. And when you find those, you double down with those people and you give those people more opportunity in the business. Share on X

Your initial partner that was JV-ing with you and that you had a handshake deal with, how long did you work with him?

We worked together from 2013 to 2022.

You had quite a long relationship with him. You started in ’08. You are growing the business. You are getting to the point where you are hiring people. You have got those three pillars of cultural, operational, and financial. Let me ask you this. You have mentioned here that you are $20 million in 2022. You are on the road to $40 million. That’s a big jump from $20 million to $40 million, and your goal is $100 million. How are you managing that growth in terms of being able to execute the projects profitably and not go insane at the same time?

That’s a good question and that was one of the things that held me back for so long. I didn’t understand the people game of this thing. I didn’t understand the leadership game of this thing. I didn’t understand how all of that integrate with each other. It had me on a rollercoaster ride. One year we do $12 million, the next year we’d break down to $8 million, and then the next year we’d go to $6 million, and then the next year we’d pop up to $10 million. I got excited and wanted to execute stuff. It wasn’t like we are starting at $16 million, and then we go to $20 million, and then we go to $40 million.

The reason why we are going from those jumps is because we have good people around us. We are leaning into those people. We are allowing those people to make decisions on our behalf after we have built out the framework for the decision-making to be done. We are taking off responsibility. Before we used to have project management and operations intertwined. What if you separate the two? Now all of a sudden, you have a person that’s focusing their 8-hour day, 40 hours a week-plus on estimating,

You have the same thing happening for project management. Do you think you are going to get more done or less done? You are going to get way more done. It’s going to be way cleaner because you don’t have to put on your estimating hat, and then take your estimating hat off, and then put on your project management hat, and then take your project management hat off and then put on your financial hat. That’s a nightmare. Now we have all departments and leaders in those departments growing all of those departments.

Let me ask you this because you referred to it a couple of times here. It’s this framework for decision-making. It sounds like you are looking to empower your people, but at the same time, you are giving them clear boundaries within which to make those empowered decisions. How did you develop that framework for decision-making, and how would you describe it?

I’m still working on how to duplicate it. The only way that I know how to do it is I like to do daily meetings with the new team members as they come on. Especially if they are a high-level team member that’s coming in. The way I look at it is we drafted our number one recruit. I’m not just going to let them come into the business and say, “Go execute on this.” I’m meeting with them on a day-to-day basis for the first two weeks.

I’m right with you here. In that daily meeting, how is that structured? How long does it last? What are you talking about?

It’s between 30 minutes and 1 hour. When I say 30 minutes and 1 hour, if we have 100 projects to go over, it’s probably closer to 1 hour. When we got 1 or 2 projects to go over, it’s closer to 30 minutes. We are walking through all of the day-to-day things that are coming up on that project, and how we need to respond to it.

All of a sudden, it gives this person this framework of, “How do we respond to it?” Now they are working on ten different projects. The same problems come up, but they come up in different areas. They are like, “I answered that over here and I’m going to take that from over here and then answer project 106.” I’m going to take that same answer from 106, and they answer it on 108. They get a way of operating off of that understanding.

I’m downloading everything that I have in my mind in my thought process to them in that daily meeting. If I’m doing transactional things like how to submit an invoice or how to put together a submittal, we will record ourselves. We’d record that and then they would have step-by-step instructions on how to do that. Now when we onboard new team members, we will say, “Go back and watch this video. If you have any questions, reach out to me and then we can have a meeting off of it.”

Tell us what software are you using to record that. How do you do that? Just so people know.

I will use a Movavi screen recorder because it allows you to record your screen, but there are all kinds of things. You can do them on Zoom. There’s a program called Loom. It’s just getting ahead of the thought process and knowing that this is an asset. This is something that people are going to come behind me and execute on. It’s having the mental awareness of that and then recording it. Having that asset, the next person you bring on, you can say, “Watch this video.” You bought back 30 minutes of your time because you didn’t have to show that same process over and over again.

I want to go back to this two-week framework or this timeframe when you bring someone on board. Why is it two weeks? What is your meeting cadence like with a new hire particularly a high-profile hire after the first two weeks?

I set it up as two weeks. It could be four weeks. There’s no definite cut-off. If the person is important to the business and we want them to be successful in the business, I’m willing to invest the time into it. That’s one of the leading things that I learned. In the same way, we will buy a property, invest money into the property, invest time into the property, and make it look beautiful. You got to do the same thing with your people if you want them to be able to come into your business and operationally have an impact. I don’t want people coming into the business freestyling and doing things based on what they think they should be done. You got to train them. The cool thing is once you train someone the right way and you bring in the next person, they can train them.

COGE 246 | Running A Construction Company
Running A Construction Company: If the person is really important to the business and we want them to be successful, be willing to invest the time into it.

 

You got that meeting framework, which I like. You are not just hiring and then hoping and letting people run with stuff. You are looking to download what you are thinking into their minds so that they understand what to do on various types of projects. You are growing to $40 million and you are wanting to get to $100 million. What’s going to have to change in your business if you are going to get from $40 million to $100 million?

We are doing projects that are $4 million or $5 million, but we also have a job that’s $30,000. The reason why we have a job that’s $30,000 is because we signed up for this job order construction contract, which is a $1 million contract but it’s done in little task orders. I’ll have meetings with the team. I was like, “We are going to start killing off these smaller contracts because we are putting the A-team on a $35,000 job, but we need to continue to keep the A-team on $1 million, $3 million, $5 million, or $10 million jobs.”

You complete the $35,000 job at the end of the job. Even if you made all $35,000 in profit, it’s still $35,000. If you complete a $10 million job and you execute properly on that job, you can make some good money. That’s the money and the resource that is needed to continue to develop the team, add to the team, and build the team.

That’s a question that I’d like to ask you about then because we all know in construction, the top line is one thing, but there’s often a large gap between the top line revenue number and the profit at the bottom. As you are growing to $100 million, what strategies do you have in place? What’s your mindset around maintaining acceptable profit levels as the business continues to grow?

That’s a good point and this is another thing that I learned from my mentor. He always says, “If you have a business that has revenue per head of $100,000, you are struggling to survive. If you have a business that is making $250,000 of revenue per head, then you are a profitable business. If you are $500,000, you are even more profitable. If you are $1 million per head, then you are even more profitable.”

If you have a business that has revenue per head of $100,000, you're struggling to survive. But if you have a business that is making $250,000 of revenue per head, then you're actually a profitable business. Share on X

I’m always looking at that revenue per head. We may need to hire more people, but we are not hiring people just to hire people. We are staying in alignment with that revenue per head. We don’t hire over-hire people. We might need some team members to push a little harder and become more efficient. We have that strict parameter in there so that we don’t get out of alignment with the growth.

It sounds like you are building this business. You have a motivating factor of taking care of your mom and your sisters. That family-based thing. What is your relationship with your dad now?

It was horrible for a while. I only told you the beginning half of the story about the $30,000. The reason why we separated is because we were $500,000 in the hole. I was tired of not living and dying by my decisions. I was tired of someone else’s decisions getting muddy in the waters or maybe wasn’t as profitable as I would have wanted it to be. We made that split.

Split with who?

My dad. He continued to do his subcontract stuff and then I continued to do the general contractor.

When you first started your business, were you working with your dad?

Yeah. We started it together because he had horrible credit. We had a similar name. I thought it would be a good idea to partner with him. I work with the opportunities that are in front of me. I worked a job and I didn’t make enough in that job to provide for myself, pay back my student loans, and take care of my mom and three sisters. I always knew I wanted to be in entrepreneurship. I knew my dad knew something about this thing. I knew that he was a dangerous person because he had been successful but he also lost money. I thought I would be able to control that relationship and not get into a bad spot. We ended up getting into a bad spot.

I want to be clear here. You partnered with your dad in addition to the other guy that you had a partnership with?

In 2008, we started the business and partnered with my dad. In 2013, I separated from the partnership with my dad. He went on and continued to be a subcontractor. I wanted to only work as the GC because I was tired of getting beat up as the subcontractor. We were doing great work, but it was difficult for us to get paid on time and all of those things.

We started to figure it out at the end. When I say figure it out at the end it was like I was so tired of getting beat up. We had Skanska come to us and they wanted us to install an 84-inch pipe under I-275 in Tampa, Florida. I told them that we would do the job for $500,000. They were like, “You guys got to do it for $300,000.” I’m like, “No. We are not going to do the job.”

I didn’t answer their phone calls or anything. They kept calling me back. I was like, “If you want us to do the job, we will do it for $500,000. I want to get paid in fourteen days and that’s it. If you don’t want to do that then don’t call me. Leave me alone,” and they agreed to the deal. We were starting to get some momentum, and we made good money on that job.

Let me make a point here. When the Skanska of the world call you and they want you to work cheaply, you don’t have to do it. Oliver, here is an example of that. If people aren’t willing to pay you what you are worth, get your butt out there and do some business development and find the people who will. Just a little side rail. Go ahead, Oliver.

That’s important. We were starting to build moment but there was so much baggage that was with my dad that I was like, “I got a focus 100% of my attention on doing work directly for the owner and executing as the prime contractor instead of the subcontractor.” At the end of the day, it’s hard to be in charge of your destiny when you are constantly relying on another contractor to give you projects. I wanted to be able to make relationships with the owners. Especially owners that had the money and the government had the money. I focused all my attention on that, and then the next ten years, I partnered with my partner and we built that. We should be asking that clarifying question.

It’s good. This is interesting because many people struggle in their dynamic with their parents personally, but then you have got the business dynamic going on as well. In 2013, you separate from your dad business-wise. We are in 2023 now, so that’s ten years later. Do you still have a relationship with him?

We do have a relationship now. He will call me and I will call him occasionally. It’s not the best relationship. I’m grown now. I got a lot of stuff going on. The opportunity to go play catch is not there anymore. Sometimes I feel like that’s what he wants to do, “Let’s go play catch, son.” “I got so much stuff going on. I would have loved to play catch with you when I was 5 or 10 years old.” I was thinking about it. It’s like I didn’t have someone to show me how to shave my face or do the manly things. At the same time, it was good because I became observant and watched how other people were doing things.n I could make a decision on what I wanted to do and I didn’t have someone constantly down my throat telling me what I needed to do. It’s an interesting way to look at that.

It is. Do you have a family? Do you have kids?

I have two kids. I got a son and a daughter. My daughter is 3 and my son is 1.

They are young little guys. What are you doing differently with your kids that your mom and dad didn’t do? This is important. You are under tremendous pressure running a construction business. It’s difficult to balance all of the things that you need to balance. What are you doing differently in terms of being a father and a husband that you are hoping will have a different outcome in terms of your life?

I’m still knee-deep in it, so I can only talk about it.

It’s cool. We are not going to hold anybody to it. Believe me.

As I was saying before, I’m observant. I have a friend that had kids ten years before I had kids. I heard him one day. He was talking with his daughter and she did something that was not she shouldn’t have been doing. He was like, “Honey, you don’t want to do that.” That word pattern was been something I would have never said. I was like, “I like that. When I have a kid, I’m going to say that same thing.” Now when I speak to my daughter, as mad as I will be, I’ll be like, “Honey, we got to do it like this instead of like that.” It softens the Oliverness. Sometimes I can be like, “Honey, what are you doing?”

It’s funny because I’m asking you about parenting and you got young kids. My oldest is seventeen now. I’m always super hesitant to give parenting advice because I don’t know if I’m qualified to give parents advice and I have five kids. When I asked you that question, it was interesting for us to think about what are the 1 or 2 things or the little things that we are doing differently that may have a massive impact on our kids. We are not claiming to be perfect parents or anything. We are always looking to do something maybe a little bit different than our parents did. Maybe we are looking to do exactly what our parents did because they did a great job, but it’s always interesting to think through those things.

Another interesting concept that I am looking forward to working through with my kids as they get older is the concept of investing. Even when I was a kid, I always wanted to have an allowance. I wanted to have money. What did you do with your money? Would you spend it or would you save it? What if your parents taught you to invest it, and then the only money that you could spend was the return on that investment?

I’m thinking to teach that concept to my kids so that they have this investment mindset. I invest in real estate. Construction is the thing that generates me money, but I also do a lot of investing in real estate. That real estate then generates income for me. It’s this income that comes in for me not having to go out there and push and shove. Whereas in construction, you have to go out there, push, shove, and work for every dollar you get. Whereas the real estate side and the investing side generate money without me having to show up. Especially if it’s a partnership properly.

COGE 246 | Running A Construction Company
Running A Construction Company: In construction, you have to go out there and push and shove. You have to work for every dollar you get. Whereas that real estate side and that investing side, it generates money without you having to show up.

 

The deals that I invest in are 100-plus unit deals where I don’t have to be on-site. There’s onsite property management. There are partners that can handle a lot of the deal, and then I can focus on what I’m good at and that’s the construction of the deals. Once the construction is done, my partners are handling the other stuff. It’s like structuring their framework and their understanding of how to invest. When you do invest, live off the eggs and then keep your goose-making-you-eggs type of thought process.

That’s a tremendous thing for you to be communicating with your kids. That’s awesome. If people want to get in touch with you, how can they do that and all that good stuff?

You can connect with me on Instagram or Facebook at @OliverFernandez_3, or you could also reach out to me at OliverFernandez.com.

I have enjoyed having you on the show. I appreciate it. Thanks for joining us on Construction Genius.

It was a pleasure to be with you, work with you, and get a better understanding of the concepts that you are talking about as well.

Thanks a lot.

That was an awesome conversation. Thank you for tuning in. It was a pleasure chatting with Oliver. Feel free to give the show a rating or a review. I appreciate you tuning in to the Construction Genius. We will catch you on the next episode.

 

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About Oliver Fernandez

COGE 246 | Running A Construction CompanyOliver is a construction business owner and real estate investor that lives in Washington DC. Oliver has successfully completed over $100M worth of construction projects and accumulated a real estate investment portfolio valued at over $400M in the past 15 years. Oliver’s passion is showing others how they can achieve their goals through construction and real estate investing.