Cenla.org, the website for the non-profit Cenla Advantage Partnership, recently posted an interview, conducted by Gary Perkins, about entrepreneurship with prolific Cenla developer Buddy Tudor. The interview was conducted in late September 2009; Mr. Tudor passed away on March 14, 2010.
On family businesses:
I want to say a few words about family businesses. Family businesses have their advantages and disadvantages. It can be a blessing and a curse. Many times, you get back in the family business and find that it was just big enough to support the family then, one person, but now, when you are a second person, it gets more difficult. That was the case back then. When I came back, I looked at what we were doing, what the bottom line was, and said, ‘You know, this has got to change. It’s got to grow from here.’ I was very much into seeing the company grow.
My dad and I had different personalities. Dad was much more laid-back, oriented to the work he did in the field over the years, and liked to spend his time out of the office on the jobs. I had more of my mother’s type A personality, and I wanted to go, go, go. It worked out well.
Recalling the climate in Louisiana during the Right to Work debate:
BT: 1959 to the early seventies, when the right-to-work law came through. I was moving around before then. I had no way early on of knowing that that would ever change. I had to work within the system that existed, a unionized system, that precluded general contractors from moving from one area to another, particularly in Louisiana. That wasn’t true all over the United States, but it was in most places.
GP: I remember how violent that change was, and there were several people who died over that.
BT: I could tell you about a project I was building in Baton Rouge. Years later, I had a knock on the door, and the police were there. This was seven or ten years after we built the project. They wanted to talk to me. They’d been dealing with one of the Angola inmates who was trying to cut a deal, and he said, ‘I’ll tell you about how this guy got killed in Baton Rouge. The way he got killed is, one night after we dug some foundation holes and left for the night, they dropped this guy down in the hole and poured concrete on him the next day.’ So that was the type thing that was happening during those years.
That was a huge challenge I faced. There isn’t enough work in Central Louisiana to support me and my dad, and this system was set up where you can’t go in other parts of the state and work, and I had to break the system. We were probably the only contractor during that period that was a Louisiana contractor that eventually became successful doing business in Monroe, Baton Rouge, all along the coast in Houma, and Thibodeaux. Once it became non-union, that made it easier. It was a very, very difficult period, trying to build a construction company, increase the volumes, and thus the business.
On Jimmy Swaggert nearly bankrupting his construction company:
A real lesson in how things can go wrong one after another after another is when the bottom dropped out. People who were not here in the mid 1980’s have no earthly idea what I’m talking about. Every one of those projects I mentioned that I had brought on line, none of them were performing. Everyone had turned south on me and were negatives.
At that time I was doing a lot of construction for a minister in Baton Rouge by the name of Jimmy Swaggert. At least I was hanging on with my construction. I was surviving, but barely, because I still had to pay the banks. Right in the middle of all of that, in the spring of 1988, I got this call about what had happened to Jimmy Swaggert. He was on television, being accused of having an affair with a prostitute.
At that time, we were doing all of his work. All of a sudden, he was paying me six million dollars every two weeks, out of his cash flow (without a bank loan), for the buildings we were building for him. We ended up doing a hundred and seventy-five million dollars worth of work for Jimmie Swaggert.
People get really confused and say, ‘Man, if you were doing a hundred million dollars, you must have been making just a ton of money.’ This will shock people, but the average bottom line for general contractors back in the 1970s was 1.2%.
BT: 1.2% was the average. If you think about it, it’s the craziest business in the world. Many a job was bid at 5% gross, and you hoped to end up with 1% at the end. When you consider what that would be on a five million dollar job, do the math, and you’ll think I’m not telling the truth. Well, that’s the truth, and if you want to go into the records, you can find that.
What happened to us in 1988, was that after the Swaggert scandal, my bonding company and my bank came to me and said, ‘You know, he is never going to pay you, and until we see how that comes down, we’ll can’t write you any bonds and you can’t be doing any business.’
Basically, that stopped the operations of Tudor Construction Company until I got all that unwound. I felt that I could get it unwound in a reasonable length of time and could just jump right back into the construction business. People said, ‘Well, you can’t survive, you need to take bankruptcy.
I said, ‘I will survive; I will figure it out.’ I did consulting on commercial developments in the Caribbean and Europe, plus I went heavily into development, because I love the development end, which brings together not only the construction but all those other things; the concept, the creative, the financing and so forth.
On being an entrepreneur in Central Louisiana:
I am simply saying that for entrepreneurs in Central Louisiana, you have to look at the market. You’ve got to look at the income stream, but you’ve also got to look at the cost end of it. You need that entrepreneurial spirit that I speak of. One of the things about being an entrepreneur is you have to be willing to take a chance. You’ve got to be willing to gamble. If you don’t have a gambling spirit, you shouldn’t be in it, because basically two things can happen. It can go wrong or it can go right, and it doesn’t always go right, so a lot of times in the business that entrepreneurs go into, including my business, all it takes is one bad mistake and it can turn around and go south on you. You need to recognize that, and you need to be comfortable with it. You have to be willing to take the chance to get the rewards, so you have to have that gambling spirit. You also need the creative spirit and the ability to really work hard—very, very hard. Let me tell you, whether it’s a construction company or whether it’s a restaurant or whatever, if the hard work isn’t there, it’s not going to happen.