The road to success is rarely straightforward and can take unexpected detours. Ms. Rosemary Swierk started a construction business after she decided to renovate a commercial building. After remodeling several buildings, she founded Direct Steel and Construction, a general contractor. The Great Recession drove a lot of construction companies out of business, but Direct Steel beat the odds by pursuing and wining contracts with the federal government.
Today, Direct Steel is a growing business that has executed construction projects for the Air Force, Army Corps of Engineers, Naval Facilities Engineering Command and Veterans Administration.
We spoke to Ms. Swierk to learn how she navigated her path to success. We hope her story inspires more women to become entrepreneurs.
How did you end up in the construction industry?
After I graduated from Indiana University with a marketing-advertising major, I worked for Black & Decker. I subsequently met my husband and helped him start his company.
In 1991 while pregnant with my first child, I kept driving past a dilapidated building that had been on the market for a couple of years. I decided to buy the building and rehab it. My first tenant was a bank.
I kept buying buildings and remodeling them. I would rent them or sell them. The projects got larger. Eventually, I was building shopping centers. The work was very rewarding. In 2004 I was asked to general contract for other developers and clients. That was the beginning of Direct Steel.
In 2005, I sold most of my buildings. I was lucky because it was just before the real-estate market crashed.
Did you seek out a mentor in the construction industry?
Yes. I asked my local Service Corps of Retired Executives (SCORE) chapter for a mentor with experience in the construction industry. SCORE connected me to Tom Mazur, a retired general contractor. Tom has been my mentor since 2009. We meet, talk or email on a regular basis. Every time I talk to him, I have a light-bulb moment.
What’s the best advice you received from your mentor?
Tom has more than 40 years of experience in the construction industry. His advice is exceptionally valuable. For example, he told me that the best projects he worked on happened when the person estimating a project’s cost became the project manager. Not all general contractors follow this model. In some firms, an estimator hands off a project to a project manager and the estimator is no longer responsible for it. At Direct Steel, the estimator becomes the project manager because no one else knows the project better than the person who estimates the project.
Why did you decide to pursue contracts with the federal government?
I founded Direct Steel in 2004, but by 2009, there was very little commercial-construction work in Illinois. I decided to seek work with the federal government because the American Recovery and Reinvestment Act (ARAA) created funding for federal-government construction projects.
I learned that getting federal-government work is kind of like getting your first job. You can get the work as long as you have the experience, but you can’t get the experience until you get the work. Winning your first prime contract or subcontract is difficult.
How did you win your first federal-government contract?
Direct Steel started as a subcontractor. A Procurement Technical Assistance Center (PTAC) advisor gave me a list of Department of Defense (DoD) prime contractors. There were 660 of them. I called every single one. That yielded one subcontract to construct a flight-simulator facility at Creech Air Force Base in Nevada.
The federal procurement system is complex. How did you learn the rules?
With that first subcontract, I read every Federal Acquisition Regulation (FAR) and Defense Federal Acquisition Regulation Supplement (DFARS) clause that was referenced in the contract. If I had a question about a clause, I contacted my PTAC advisor. This man happened to be a walking encyclopedia of FAR and DFARS clauses.
How did you increase your win rate to 58 percent?
We defined our true value proposition for our target market.
In 2008 and 2009, the economy was terrible and our close rate was 5 percent. In 2010, we improved it to 10 percent. Last year, our close rate was 58 percent. We were able to improve our close rate by identifying our value proposition and articulating it better. That really opened up a large market for us. For years, I was articulating our value proposition, but people were not hearing it the way I thought I was articulating it.
Articulating Direct Steel’s value proposition in a manner that potential customers understood was a game-changer.
In construction projects, there are four pillars: scope, budget, schedule and quality. In the vast majority of construction projects, there is a “bust” in one of those pillars. For example, it’s not uncommon for construction projects to exceed budgeted costs. In the commercial world, those busts create a tension between architects and general contractors. We’re very proud that we have developed a system that minimizes those tensions.
Architects tend to be great with vision and design requirements, but their strengths are typically not with constructability, budget and schedule. When an architect is forced to work in one silo and a general contractor in the others, I almost guarantee that one of those pillars will bust. We minimize change orders and cost-overruns by collaborating with architects before any plans are drawn. Our clients recognize the value of bringing us to the table early, even before a site has been selected.
There are a lot of client testimonials on our website. There aren’t a lot of general contractors that can provide customer testimonials. We can because we truly deliver value to our clients.
How did Goldman Sachs’s 10,000 Small Businesses program help you?
Goldman Sachs’s 15-week course was hugely beneficial because it forced me to work on my business instead of in my business. When I’m able to delegate more and work more on the business, all of Direct Steel’s metrics improve. When I finished the program, I had a growth plan.
As a result of the program, I continue to have quarterly process meetings with my team. No company is perfect, but you want to make sure that you’re always striving for it.
What advice do you have for small businesses interested in competing for federal-government contracts?
Surround yourself with people you know, like and trust. Skills can be taught, but you can’t teach a work ethic or integrity. Get mentors who have experience doing what you want to do.
The federal government is the world’s largest purchaser, but it’s difficult to become a vendor. It costs a lot to pursue federal-government contracts and, when you get them, it’s high risk.
What advice do you have for women interested in starting their own business?
When you meet people, find out how you can help them. Good things tend to roll from that.
Everyone I meet is dealing with something. That something may not have anything to do with construction. Someone may be facing health issues or work struggles. I meet with a lot of people each week and, as result, I’m very fortunate to have an excellent network of people I know, like and trust. I get a great sense of satisfaction introducing people to others who may be able to help them.
Several professionals in my network introduced me to clients or provided advice that helped my family. For example, my daughter suffered debilitating effects from Lyme Disease for many years. My family and I sought several types and modalities of care; most of which were minimally effective. A series of introductions led to a miraculous improvement in my daughter’s health.
Have you won any contacts set aside for WOSBs?
In January, we were awarded one WOSB set-aside contract worth $12 million. There were eight bids.
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