Transitioning from Contractor to Concrete Businessman - A Concrete Business

Diversification and business planning allow Ruttura & Sons to transition from contractors to businessmen.

Ruttura & Sons is performing a host of work at two 18-story towers in Manhattan's East River Science Park, including excavation of rock and contaminated soils, piles and shoring, foundations, and 30- to 40-foot walls. The company started on the project with $20 million worth of work at the site, but after the GC saw what they could offer they're currently on track for $48 million worth of work at the site.
Ruttura & Sons is performing a host of work at two 18-story towers in Manhattan's East River Science Park, including excavation of rock and contaminated soils, piles and shoring, foundations, and 30- to 40-foot walls. The company started on the project with $20 million worth of work at the site, but after the GC saw what they could offer they're currently on track for $48 million worth of work at the site.

When Tommy Ruttura entered the family business in 1971 he looked back at his father's career then looked ahead at what he wanted in a career. Ruttura recognized his father's skills as a concrete tradesman and the honest, professional way in which he worked with his customers and suppliers. But Ruttura also recognized the problems his father faced when he was forced to lay off his workforce and close up shop for the winter. Ruttura set out to build upon the positive elements of his father's company and create a year-round business and full-time careers for himself and his employees. "To move from a contractor to a businessman was a huge step," Ruttura says.

The transformation Ruttura spearheaded over the last two and a half decades turned his father's $400,000 a year company into a business that expects its 2008 sales numbers to reach $133 million. Ruttura was able to accomplish this by setting himself apart from his competition. "If you're doing things the way everyone else does them you're a commodity. We don't want to be a commodity," Ruttura says. "We developed a business that is unique in the industry, and customers call us for advice."

Ruttura & Sons Construction Co. is a family-owned business headquartered in West Babylon, N.Y., and founded in 1918 by Ruttura's grandfather. Tommy Ruttura serves as president, while his younger brother Peter, who started with the company in the 1980s, serves as vice president. Both Tommy and Peter have children working in the company making it a business looking to its fourth generation of Rutturas as it closes out its 90th year of business.

Ruttura & Sons serves the greater New York City area, taking on jobs throughout the four boroughs and into New Jersey and Connecticut. The company offers a full range of concrete services for the commercial construction market and a variety of services closely related to the concrete industry that help the company stay diverse. By offering demolition, excavation, storm drainage, sanitary systems and water services, Ruttura says his company can perform up to 25 percent of the work on any given job, instead of only 5 percent if they only offered concrete work. It's also a benefit to the companies that hire Ruttura & Sons. "They can deal with just us instead of four or five other contractors who they'd have to find to do all these jobs," Ruttura explains.

In addition to the services offered through Ruttura & Sons, the company has sprouted additional arms. One of these arms is Our Recycling Corp., which Ruttura started 25 years ago while looking for an alternative to paying $25 per cubic yard to dispose of construction waste in a landfill. Ruttura invested in several crushers, and today on every job Ruttura works the company handles the demolition and carts it away to separate the steel for recycling and crush the concrete into #4 modified blend, which Ruttura & Sons uses under every slab on grade they pour. "The key to a good slab on grade is to keep the substrate stiff and non-permeable. When compacted, this recycled subbase stays dense and doesn't move around like sand. It took me years to get this accepted in the area, but now it's a standard on Long Island," Ruttura says. "It not only made my company better but also made my competitors better."

Another arm is Our Rental Corp., which serves the greater New York City area with concrete pumping. Ruttura started the pumping businesses in 1986 when he recognized a need for quality pumping services around the city. It also gives him the chance to use the area's biggest and best pumping equipment on his own jobs.

Nick Avella manages the pumping business, which runs 24 pieces of pumping equipment. He says Ruttura & Sons accounts for 35 percent of the pumping business while about 100 customers, many of them competing contractors to Ruttura & Sons, round out the customer list. Avella says it's the company's commitment to customer service that keeps its customer base strong. "Customer service is all about accommodating the customer," he says. "We help them get the proper permits from the city, the right pipe, the right mix and ensure the pricing is right."

Avella says good customer service also contributes to furthering the pumping industry. "Pumping benefits the customer in regards to timeliness and labor - with a pump you get consistent flow and less of a mess, and the concrete gets where it needs to go faster than with other methods," he explains. "Pumping is a benefit for workers, too, because the concrete goes right where you want it and there's less moving it around. And you also avoid the hassle of having to cut a road or move trees because you can pump over things."

The Ruttura & Sons package - combining services offered, technical expertise, a strong safety record and the financial benefits that come with an established company - puts the business in a position to be more of a specialty contractor than a subcontractor. Many customers value Ruttura & Sons, its systems and professionalism, and Ruttura isn't sad to say "goodbye" to those who don't. "We don't want to work with people who don't appreciate our expertise," Ruttura says.

Each year he makes a bold move and "fires" a customer that has been difficult to work with or collect money from, in essence giving both companies a break from working with each other for one year. On the other hand, Ruttura goes out of his way to recognize good work. He might take the time to write a "thank you" note to the president of a general contracting firm pointing out his company's successes and why they're easy to work with. And each year Ruttura recognizes New York City's best ready mix driver with his own Ruttura & Sons award, usually a t-shirt and a heap of gratitude.

Organized growth

Ruttura & Sons didn't get to where it is overnight. The company has been on a growth plan since 1971 - growth that was carefully monitored and planned. Ruttura emphasizes that he couldn't have developed his business without help from industry associations like the American Concrete Institute (ACI) and the American Society of Concrete Contractors (ASCC). He credits these groups with furthering the technical side of concrete while helping contractors develop into businessmen. "The ASCC has been the greatest thing for me and our company. It's like having a big board of directors of concrete contractors from all over the country. It's my security blanket."

Ruttura's early growth goals were met easily. It was while crossing the $6 million in annual sales point that the company hit its first speed bump and sought the help of FMI Corporation for management consulting. "There were a lot of different personalities in the business. I was always thinking about my job and the company, but not everyone was. I expected a lot from other people, and FMI helped us understand how to get along with people," Ruttura explains.

The $20 million threshold was another point in the company's growth that brought substantial change in the way Ruttura ran his business. He explains that at this point in a concrete contracting business you move into a different arena in regards to the size of projects, amount of paperwork, cash flow, requirements for a larger retainer, dealing with a bigger payroll and working with customers who are less personal. "This is where you go from being a big guy in a small fishbowl to a bigger company in a big fish bowl," Ruttura says.

When Ruttura's daughter Nicole Hogan came on board shortly after this shift, she brought a fresh outlook and recognized ways to organize the office that would streamline the entire company for further growth. She put processes in place to greatly improve filing systems, billing, payroll, project management software and managing job drawings. And Nicole herself plays an important part in the organization of the company along with fellow office manager Charlene, who schedules and tracks the pumping business from the office end. Ruttura says the office managers control appointments and calendars for him and Peter, and they wouldn't know what they were doing or where they were going without them. "The company needs people who back them up. It's women like Nicole and Charlene who point us in the right direction, smooth out the bumps in the road and can give us the softer side of business," he says.

As the company continued to grow, Ruttura recognized areas of the business that had outgrown his management skills and he had to learn to give up some of those responsibilities and bring in people to manage those areas of the business. "Giving up the financials was hard," Ruttura says of hiring a CFO. "But it's all part of growth, and you have to accept it."

Ruttura says a main driver of growth is staying involved with the industry and striving to increase productivity through technology. "We're a forward-looking company," Ruttura says. "Once a competitor has caught on to what we're doing we're already on to something new. We spend money on things but make it back many times over."

For instance, Ruttura & Sons is the only company on Long Island that has grading equipment that utilizes GPS. "The laser grading helped stopped cracks and curls and also stopped people from saying we cheated them - we had a way to prove we didn't."

Ruttura & Sons also works with builders to substitute 30 pound steel fibers instead of wire mesh on slabs on grade whenever possible. "Mesh is laborious and presents trip and fall hazards," Ruttura explains. "When you pump fibers the reinforcement is always in the right place, and that's not the case with wire mesh."

'Work like a champion today'

Despite Ruttura & Sons' size, the company still feels like a family-run business. Ruttura credits that to his father and the way his family was brought up. "We're the first ones in the yard every day, and we'll probably lock up the place tonight. We work hard, work long hours and come in on Saturdays when we need to. That's why our employees work hard for us," Ruttura says.

With above-average wages and full benefits, Ruttura & Sons has almost no turn-over. "I've got 350 great people," Ruttura says. "Owners who say they have a hard time finding people aren't treating their people right."

The company's motto, "Work like a champion today," isn't just directed at the people in the field - it's Ruttura's mantra too. It's not uncommon to find Ruttura on the jobsite running a piece of equipment. He's also hands-on in job costing and examining daily job progress to give him time to correct areas where they've fallen behind while the project is still going instead of weeks after a job is finished.

Like most contractors, Ruttura says he's getting ready to "hunker down" for the looming recession. He'll need to make cuts in the company and prepare for what he thinks could be a severe drop in annual sales. "We'll look at ways to reduce overhead. We'll do probably 50 percent of the sales we did last year but still need to stay profitable," he says. "We'll look at turning off lights, turning down the heat, and more closely monitoring gasoline and fuel bills."

Ruttura says despite a slowdown he has a strong client base that will keep his company busy. And he'll continue to support the ASCC, ACI and other groups that strive to help the industry.

Ruttura says the next few years will be tough. But despite cuts, the principles and character of Ruttura & Sons will stay.