Upsize Growth Challenge: Roden Iron

Cash management is No. 1 issue for year-old Roden Iron

by Beth Ewen

Kelly Roden took a huge leap from her former career in e-commerce. With her husband, Brian, formerly an ironworker, she started Roden Iron Inc. last year in Milaca, a union steel erector that has $700,000 in projects awarded so far and $800,000 in bids outstanding.

Typically working as a subcontractor to a general construction contractor, Roden Iron supplies the labor to erect the steel beams that form the shell of buildings. A CVS pharmacy, a Walgreen?s pharmacy and an L.A. Fitness building in Hopkins are among the young firm?s projects.

Roden outlines her three key questions for the experts assembled to help her company, one of the winners of this year?s Upsize Growth Challenge, during workshop one in March.

First, how can she get the capital for necessary equipment, such as a work truck, a forklift and a welder, and should she buy it or rent it?

She?s already funneling about $10,000 to $20,000 a month from a separate company that she owns, which handles electronic commerce for clients, to Roden Iron, and Brian?s parents are helping out with funding.

Payments are high for existing equipment as well, and she rattles off some hefty costs. ?It?s $36,000 for a forklift; a boom, used, is $50,000; then we need a one-ton 4-wheel-drive truck,? she says. ?It?s scary to have all these payments.?

Second, how should she staff her company back at the office, particularly in the crucial area of project estimating? The company now has about 10 people on staff; the ironworkers are hired on contract for each job.

Roden had been doing the estimating herself, and did well enough to break even on the first job she bid. She wonders if she should go back to school to really learn the ins and outs.

She recently brought on an estimator who had retired from one of her company?s competitors, ?and I learned a lot. … I want to reward him for the business he will bring our way,? she says, and she has considered offering him an equity stake in the company.

Winning projects is tough work in an industry filled with a few old-school big players and many smaller players who have broken off to start their own businesses. Roden notes it?s not uncommon for a couple of snowmobiles or a similar perk to show up on the lawn of a project manager who chooses the subcontractors for each job.

She competes by using her e-commerce skills to appeal to younger project managers who like to use the Web more than they like to schmooze with their cronies over coffee. That?s where her career in e-commerce pays off, formerly at SuperValu and then with her own company.

Third, how can she retain the skilled labor needed to erect the steel beams? ?There?s only 1,500 of them,? Roden says, referring to the union workers trained and certified to do her company?s work.

?Lots of them are on the bridge, ? she says, referring to the rebuilding of the collapsed I-35W bridge. When the Twins stadium and the Gophers stadium start to go up, the shortage could get acute.

She says she feels a heightened responsibility now that her company is winning more work and employing more people. She is exacting about safety standards, an issue she takes personally. ?Being the wife of an ironworker, you don?t want to think about them high in the air,? she says.

Added to that is concern for her company?s employees. ?Now that we?ve got 10 men and their families depending on it,? she says, not finishing the thought, but referring to that growing burden of business ownership.

Roden needs to shore up the foundation of her company and add professionals to help her, urge the finance and operations experts at the first Upsize Growth Challenge workshop.

?Really managing the cash flow is your critical No. 1 issue,? says Bryan Ross with accounting firm EideBailly in Bloomington. ?Look at your one- and two-year budgeting cycles and really manage the cash, so you can forecast how many jobs you can take on.?

Rick Wall, CEO of St. Paul-based Highland Bank, asks whether she and her husband are mentally prepared to grow a bigger business.

?Growth sucks cash out of a business, so you need professional advice to forecast that. Once you?re in the position that you?re short, it?s hard to recover. When you?r