Contractor of the Year Finalist: Rich Ponce

It was a lucky accident that Rich Ponce found himself working an indoor job, doing accounting and bookkeeping for a construction firm in Austin, Texas. Even though as the son of a career Air Force logistics expert, Rich hadn’t been exposed to construction in his youth, he soon realized it was something he could do and something that fired his imagination.

So with the encouragement of many of the contractors and business people he had met in his first construction job, Ponce launched his own company in 1991 doing high-end residential and commercial concrete work. In his first year of business, Austin Concrete Solutions racked up about $1 million in sales with just two machines and five employees. Today, with carefully managed growth and a stable roster of highly skilled, loyal workers, the company has grown to $4 million in sales, 10 primary pieces of construction equipment and 65 employees.

In the booming exurbs of Austin you can get concrete work done cheap. Concrete foundations and flatwork have been cut-throat businesses ever since Dell Computers and Texas Instruments turned this college town into a high-growth, high-tech Mecca in the mid-1980s.

How Ponce managed to thrive in this dog-eat-dog environment was to emphasize quality and technical mastery over quantity. If you want a couple acres of slab on grade at the lowest possible price, Austin Concrete Solutions is probably not your best bet.

Thriving on challenge
“If it’s a challenge, if it requires a higher skill workforce, those are the kinds of jobs we like,” Ponce says. “It narrows the field of competition. The big concrete contractors on the simple jobs just price us out. I don’t see how the smaller guys can do it. It’s too competitive. We can’t do concrete slabs at $4 to $5 a square foot.”

Ponce is also discriminating about the kinds of general contractors he partners with. “There are a handful of general contractors that require you to be pre-qualified,” Ponce explains. “They look at your financials, evaluate your experience and give you a packet to fill out. And they have a reputation of being good to their subs.” Working with the top-caliber GCs also means the pay is dependable and Ponce doesn’t get nickel-and-dimed by back charges and other hassles.

Working in this more exclusive environment also frees Austin Concrete Solutions from much of the competitive bidding process. “We started out doing negotiated high end residential work only,” Ponce says. “We’ve done more commercial work recently but only when it’s negotiated, not much hard bid.”

Not that any of this work is easy pickin’. Soils around Austin range from expansive clays to limestone to granite. West of the city is the storied Texas Hill Country where hundreds of millionaires, billionaires and movie stars have built huge homes and corporate retreats perched on steep hillsides. It’s not unusual, Ponce says, to see residential blueprints with changes in elevations of 40 to 60 feet or more in one contiguous structure.

A lot of contractors would walk away from projects with that level of complexity. But for Ponce, it’s not only the sweet spot in his market strategy, it’s the kind of work he most enjoys doing. If it’s a challenge, if it’s something other concrete contractors are wary of, it will bring a smile to Ponce’s face.

Case in point: A few years back a famous actress built a sprawling mini-mansion on one of the Hill Country’s most scenic bluffs. Austin Concrete Solutions was not the original concrete contractor on the job. But when the foundations for the mini-mansion started cracking and sliding, Ponce was called in to see it he could stop the home from sliding down the hill. Just building here new would have been a big enough challenge – let alone stopping the foundation from further self-destruction. And lawsuits against the original foundation contractor were already in progress. But Ponce and his crews warmed to the challenge and saved the house from becoming a very expensive pile of rubble at the bottom of a gulch.

Treating the customer right
Working for such high-end clients not only requires technical mastery but a high priority on customer service as well. The job doesn’t always end, nor does Rich Ponce’s relationship with his customers end, the moment the concrete cures.

When massive rainfall damaged and overwhelmed a recently installed French drain system at the home of client Steven Ross, Ponce sent his crews into full battle mode.

“Where many other contractors would have bailed or spent time arguing over who was responsible and who would do that or flatly said ‘sue us if you want,’ Rich’s team immediately swung into action,” Ross says. The crews worked all night for several nights, bringing in pumps to remove standing water and excavating to remove impediments to the water flow. After solving the immediate crisis the crews then dug up and rebuilt about 60 percent of the drain field and restored the site to its original condition.

“Our situation was a contractor’s nightmare, yet in a test of character and determination Austin Concrete Solutions saved the day and earned our considerable admiration and thanks,” Ross says.

Loyalty is a two-way street
None of this would be possible without great crews. “They have to be good, skilled guys, and dependable,” Ponce says. “Quality is the biggest factor in the work we do. When you’re quality conscious and focus on customer service instead of production, everyone in the organization knows to do the job right and not cut corners.”

“They’re a loyal group. We keep them busy,” Ponce says. “I’ve been very careful to match the labor to the jobs. I don’t want to staff up only to have to lay off people later. We bring on guys in a very calculated way. As a result, in 14 years of business we’ve had no layoffs.”

In the personnel area, insurance is the biggest challenge. “A lot of guys will sub out their labor so they can get by with less insurance. But all of our employees are covered by general liability and worker’s comp,” he says.

About two years ago Ponce diversified his company by bringing onboard Danny Escobedo, a fellow contractor with deep knowledge and experience in the commercial side of the concrete business. Escobedo had his own company, but was looking for new opportunities after his partner left the business. Ponce saw the opportunity to put Escobedo’s talents and contacts in commercial concrete, as well as his crews, to work at Austin Concrete Solutions.

Mixing ownership and leases
Concrete work often requires intermittent use of heavy equipment. For that reason, Ponce mixes ownership with strategic leases so as not to tie up working capital in machines that might sit idle for portions of a job.

The company owns two track loaders, a Cat 953 and 963. Plus it keeps an assortment of smaller rubber track loaders and backhoe loaders on hand for general duties.

For big digging tasks, Ponce prefers to lease excavators, the Cat 320 being the machine best suited to the size of most of his jobs. He also leases his haul truck service. “The cost of ownership for dumps and haul trucks is too much,” Ponce says. “There’s one big truck company in town and most of the time we get excellent service. I can’t yet justify owning a truck.” Another item he’ll lease from time to time are big hammers to break up the considerable seams of granite and limestone that run through central Texas.