Scott Kluver and Randy Roers
“I’ve driven an hour and a half to look at a $1,500 sidewalk job for a customer,” says Randy Roers, co-owner of Innovative Companies in Alexandria. “We don’t want another contractor to do that job. We want to be the ones building that sidewalk for our customer.”
In five short years, that attitude has paid off, big time. Roers and Scott Kluver founded their general contracting business, Innovative Builders, in 2005. Two years later, they blew past their five-year projection, surpassing $1 million in revenue. Now their general contracting firm has grown into four businesses under the umbrella of Innovative Companies. In the coming year, Kluver and Roers expect to hit $20 million in total revenue, with Innovative Builders leading the way at more than $15 million. Recent projects include Lakewood Terrace, a $5 million-plus multifamily condominium project, and a $25 million senior living complex. Both projects are in Alexandria.
“It all happened pretty quickly,” Kluver says of the company’s fast takeoff. “To be honest, now we’re trying to keep a lid on our growth as we watch and see what the economy is doing.”
Kluver and Roers grew up together in Alexandria. First cousins and good friends (their mothers are twin sisters), they got their first taste of building by working in high school for their grandfather, a retired commercial contractor who had developed a mall in Alexandria. Later on, both Kluver and Roers earned degrees in construction management at Moorhead State University. After a short time working for different contractors, they ended up together again in Alexandria. They honed their construction project management skills for seven years, then went out on their own.
“Randy and I always had the entrepreneurial spirit,” Kluver says. “We knew we didn’t want to work for other people.”
While still working full time for Lee’s Construction in Alexandria, the cousins started Innovative Developers, which consisted of their buying a repossessed house, renovating it, and then doing it again with a second house. The original plan was to sell the houses, but as the economy worsened, they decided use them as rental properties, and to borrow against them.
“We’d get up at 6, be at work by 7, work till 6, go home, eat supper, and go to work on the houses till midnight,” Roers says. “We worked our tails off. But we got $100,000 of seed money to get our $1 million bond, and off we went.”
Food for Future Growth?
Randy Roers and Scott Kluver are the sole owners of two of their four Innovative Companies, Innovative Builders and Innovative Developers. They have a third partner working with them at Innovative Erectors, a steel erection company that does work for Innovative Builders and other general contractors in Minnesota and North Dakota. They have another third partner who is the manager of Innovative Enterprises, which currently consists solely of a Bennigan’s restaurant in Alexandria.
A Bennigan’s? How’d that happen? Says Roers: “We took the profits from a business” and bought into the restaurant as an investment. Roers and Kluver have no plans to buy into more restaurants—at least not until the economy improves.
Innovative Companies now has about 100 employees. Roers and Kluver still do all of the construction estimating and project management. The cousins credit their success to an approach that, as they describe it, combines the best features of construction management and general contracting.
Here’s how they describe the blend. Start with a construction manager, who is hired to facilitate each building project. Customers benefit from his or her organizational ability, attention to detail, and commitment to delivering good customer service. The downside: A construction manager works on a fee basis, and has no liability for any of the vendors hired to do the work. General contractors, on the other hand, take responsibility for all of the subcontractors. But as Roers says, they “are not generally known for their customer service.”
The Innovative method: “We have an open-book approach, like you would get with a construction manager, so our customers see exactly what they are paying for,” Roers says. “But our customers sign one contract with us, as they do with other general contractors, and we take responsibility for the work of the subcontractors.
“We also save our customers a lot of time and money by getting on board early,” Roers adds. “We’ll get involved with the architect, go through the design, and get prices upfront so our customers know they can afford to build the building that is being designed. Our tagline is, ‘From concept to completion.’”
“We do have goals to get larger,” Kluver says. “But we’ll grow slowly because we want to make sure our initial vision stays the same: to have every customer be a reference for us. In five years, we’ve been able to achieve that. There isn’t a single customer we wouldn’t put on our rÃ©sumÃ©.”