Qualified Remodeler Magazine

JUN 2018

Qualified Remodeler helps independent remodeling firms to survive, become more professional and more profitable by providing must-have business information, namely best business practices, new product information and timely design ideas.

Issue link: https://qualifiedremodeler.epubxp.com/i/993338

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Page 57 of 59

n the early 2000s, Iron River Construction provided subcon- tractor carpentry crews to high-end builders in the Minneapolis-St. Paul area. e company began focusing on exterior replacement and repair in 2005, just before the bottom fell out of the residential construc- tion market. In 2010, a business consultant urged Iron River to offer interior remodeling services once again. "ere was no work, there was no margin, and there was no money [in remodeling]," says COO Tracy Dahlin, who proceeded to hire her first project manager nevertheless. "It gives us flexibility, and it gives us a bit of stability—it's a little more predictable than exteriors. With exteriors, if you have a big storm, all the sudden you really have to scale up quick and [then] scale down." e remodeling division now ac- counts for 40 per- cent of business at the company, which matches its produc- tivity in exterior work, Dahlin notes. Emergency resto- ration services—in- cluding water and fire cleanup, as well as storm damage—rep- resent the remaining 20 percent of revenues. Iron River created the restoration division last year for reasons similar to its reintroduction of interior remodeling. "e remodeling gives us stability, and that's the thought behind the restoration for the fire and water as well," Dahlin explains. "e theory [for offering more services] is to "When we get really busy, it's very difficult to find anybody to do punch lists—there isn't a sub who's going to do a punch list," Dahlin says. "Or if we're doing a small bathroom in a basement, it's really hard to get a sheet rocker to come out to do a 5-foot by 8-foot bath- room. If it's on the exterior side—maybe just one or two windows—it's difficult to get a sub to do just one or two windows." Dahlin also developed a website, five- starcrews.com, to connect contractors with subcontractors and streamline the process. is initiative builds transparency as well as accountability because contractors can rate crews based on punctuality and work- manship, and subcontractors can grade a company on its organization and coordi- nation. e domain went live earlier this year, she adds. "It kind of evens out the market on supply and demand as far as labor goes. I can see that it also evens out the pricing as well," Dahlin notes. "ere's just a lot more transparency. We're already doing these things, we just hav- en't done it on this kind of platform. e goal really is to improve the industry. e pain that I suffer from—typically other people are suffering from [it] as well." | keep the company a little bit recession-proof, so if remodeling tends to go downhill, we're always going to have fire and water [resto - ration]. We had to develop that [division] and have it in place before we need it." A labor shortage in the construction in- dustry has challenged her ability to find new workers, but the company remains commit- ted to adding in-house carpenters. When she started in the business nearly 25 years ago, many remodelers desired subcontractors over employees, Dahlin says. Iron River even op- erates an apprenticeship program for young people who want to become carpenters. "ey'll work for us over the summer and then go to carpentry school for two years, and they'll work for us the subsequent sum- mer [after they graduate]," Dahlin explains. "So at the end of t wo years, they have a carpentry degree, they've got a couple of years of experience under their belts, and they don't have any debt at all—we pay it in full. at's just one of the things we're doing." e company has steadily increased margins in its remodeling division, which involves kitchens, bathrooms, basements and additions. An in-house labor force enables Iron River to shift workers among the three service departments and, thus, reduces its dependency on subcontrac- tors. is versatility gives the company more control over scheduling and ensures its proj- ects stay on track. Diversified Portfolio No. 338 Iron River Construction expands into service offerings to challenge market variations and mitigate its economic risk. By Kyle Clapham The pain that I suffer from— typically other people are suffering from [it] as well. Tracy Dahlin, COO TRACY DAHLIN, COO COMPANY: Iron River Construction LOCATION: Chaska, Minn. DESCRIPTION: Full- service remodeler 2017 TOP 500: No. 338 I 58 June 2018 QR QualifiedRemodeler.com PROFILE TOP 2017

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