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Business Observer Thursday, Apr. 7, 2022 7 months ago

Construction company crafts blueprint for succession

Bandes Construction is on the brink of a new era as its founder and president clears the way for his son and daughter. The kids have no plans to mess with success.
by: Brian Hartz Tampa Bay Editor

Company: Bandes Construction, a mid-size builder headquartered in Dunedin, has been in business for 35 years. And all that time, Robert Bandes has been in charge, overseeing the planning and execution of dozens of civic, commercial and multifamily development projects, from recreation centers and libraries to gas stations, banks, grocery stores and restaurants. Now 72, Robert is preparing to hand over control of the company to his daughter Jillian Bandes, 36, and son Zack Bandes, 29.

"Titles are almost meaningless to me. The true measure of somebody's worth is not in the title, but in what they're doing, who they're talking to and their attitude and approach to day-to-day issues." – Jillian Bandes, Bandes Construction

“I’ll be moving into an ownership role this year, as well as Zack,” says Jillian, who began her career as a journalist in Washington, D.C., but made the move to construction four years later, in 2011. “That transition will take some time. We expect it to be pretty seamless, but it’s not going to happen overnight.”

In the meantime, Jillian and Zack will have plenty of work to keep them busy. Bandes Construction is involved in the Bexley master-planned community in Land O’ Lakes, building a 38,000-square-foot office complex there, and it’s also spearheading the construction of a new performing arts center in the Carrollwood area of Tampa.

“That has $1 million of audio-visual equipment,” Jillian says. “It’s going to be a remarkable addition to the north Tampa community.”

For a firm its size — it has 36 full-time employees — Bandes Construction punches well above its weight.

Courtesy. Robert Bandes, founder and president of Bandes Construction in Dunedin.

“Our level of service is commensurate with much larger construction firms,” Jillian says. “But our attention to detail, and our reputation, is one of a smaller, close-knit, family enterprise. We are delivering projects that firms much larger than us would typically engage in.”

Jillian attributes the firm’s sustained success to the way her father structured the company. Organizationally, it’s flat: there are no vice presidents.

“There are no layers of management here,” Jillian says. “When you’re assigned a project manager or superintendent, you know that they’re going to have the knowledge and integrity that you need to build successfully. You're not going to have to rely on other folks within our company to get it done. Our staff is used to making the kinds of decisions that executives make at other companies.”

Succession plan: When Robert steps down, Jillian and Zack will have joint ownership stakes. And although Robert uses president as his title, Jillian says she’ll likely eschew that moniker.

“Titles are almost meaningless to me,” she says. “They’re a relic of a top-heavy, hierarchical business structure. “The true measure of somebody's worth is not in the title, but in what they're doing, who they're talking to and their attitude and approach to day-to-day issues.”

While titles aren't a priority, Jillian expects there to be a clear division of duties between she and her brother. She’ll focus on business development and operational decision-making, while Zack, who holds a degree in economics from the University of Pennsylvania, will handle estimating and financial projections. They will both be heavily involved in project management.

Courtesy. Zack Bandes, a project manager at Bandes Construction in Dunedin will have a 49% ownership stake in the business.

“Zack has an incredible mind for numbers,” Jillian says. “I’m sure that I would not be moving forward into an ownership capacity if he was not at my side. I can't bring anyone else better to a meeting where we're talking about cost projections.”

Challenges: Like most developers and builders, Bandes Construction has been affected by inflation-driven cost increases and supply-chain disruption. But Jillian doesn’t see those issues as long-term problems because of the overall health of the economy for developers.

“The market is robust enough to support a midsize firm like us,” she says. “Right now, if you’re not busy, you shouldn’t be trusted.”

The more immediate challenge, Jillian says, is the scope and complexity of transitioning the business from father to children. She says her father never considered selling the company to a third party, and that she and Zack will pay the full appraised cost for it. (She declined to disclose that price.)

“It takes legal expertise,” she says. “We're fortunate to be working with the lawyers at Trenam to accomplish that successfully, in a way that ensures the company’s financial future. I've enjoyed having a front seat in the process, because it's much more nuanced than any of us originally anticipated.”

What the company will look like in five years: Bandes Construction will likely stay in its lane in the years ahead, more or less — and Jillian says she’s 100% OK with that. Growth has been consistent: 10% in 2021 and 5% in both 2019 and 2020 (she declines to disclose specific revenue figures). 

“I like where we’re at,” she says. “I don't know that getting bigger would necessarily make us more profitable. And frankly, I’m more concerned with the customer experience, making sure our clients are happy and want to come back to us. And making sure our employees and coworkers here are happy. I'm confident that the organization we've set up here will be able to perpetuate itself for many years to come.”

(This story has been updated to clarify that Jillian and Zack Bandes will both continue to be involved in project management after their father retires from Bandes Construction, in addition to the roles each has within the company. It was also updated to reflect the correct ownership stakes for Jillian and Zack Bandes in the company.) 

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