Penny Rosso and the History of Pen Steel

Pen Steel, INC. was founded by Penny Rosso in 1998 as a start-up manufacturer’s rep. Working out of her apartment in Lincoln, Nebraska, Penny put her years of experience to work, matching parts and equipment providers with customers who needed help navigating the market. Having worked in the steel industry since 1984, she had a deep understanding of the industry and a commitment to following through for her clients and customers.

Pen Steel would adapt and grow over the next few years, brokering sales for providers of steel weldments. During that time, Penny experienced the limitations of being a broker. Even if she went above and beyond for her clients, ultimately the delivery and quality of the steel products was dependent on her associated manufacturers. 

In 2003 raw material prices skyrocketed and product availability became tight. Her suppliers started running late on orders, and Penny felt responsible to her buyers for these delays. To change this, she decided to take matters into her own hands. 

After 7 years of operating as a manufacturer’s rep and broker, Penny made a bold investment. Pen Steel purchased its first piece of manufacturing equipment, their first robotic welding cell. Manufacturing her own steel weldments was a risk, and Penny had her fair share of doubters, but she gained confidence from another source: her customers.

“I had the most important thing in my posession: a customer base that believed in me and trusted in me. That trust was all the proof I needed.”

-Penny Rosso, Owner/President, Pen Steel, INC.

Of course, Penny also had intimate knowledge of what customers were looking for thanks to her time brokering sales. Pen Steel began manufacturing their own weldments for customers to crane, trailer, and irrigation manufacturers, to name a few. 

The risk paid off. Today, Pen Steel operates in a 26,000 square foot building, with four welding robots including the very first one she purchased. The Pen Steel team has grown from a 3-person crew in 2005 to a 23-member team.

For Penny, Pen Steel represents a lifetime of experience and courageous choices that paid off in the long-run. “This little company,” Penny told me, “I look at it as a diamond.” A diamond, she explained, is continuously being finished by hand, with each facet individually cut and polished. Pen Steel is a diamond that has been perfected over the years through hard work and an adventurous spirit.

That’s why, when Penny eventually sells her business, she wants to make sure she gets a sale price worthy of all the innovation and sweat she’s put into building Pen Steel.

A Difficult Decision

Putting your life’s work up for sale isn’t a decision that can be made lightly. Though Penny isn’t ready to sell today, she understands that selling her business is done best with years of preparation. To maximize your business’ sale price, you have to put a plan together to eliminate debt and produce detailed records that prove profitability and growth potential.

Like many businesses, Pen Steel needed to look for outside help with financial services in order to prepare for this complex process. Penny spoke with a large CPA firm about preparing her business for sale, but wasn’t satisfied with their level of interest. Their solutions were sound, but they weren’t tailored to her unique business. Penny decided she would need to work with someone who would listen closely to her concerns, and craft a plan that fit Pen Steel.

After discussing her dilemma with members of her financial investment group, Penny’s financial advisor introduced her to Mary Ferry of Advantage Insights. In a meeting with her financial advisor and Mary, Penny was able to share her particular concerns and goals for the eventual sale of her business.

“I was very impressed immediately… There are too many times people just look at the numbers, the money, and they look past the person. She didn’t look past me.”

-Penny Rosso, Owner/President, Pen Steel, INC.

Penny felt she could trust Advantage Insights because of the way Mary asked questions, listened, and explained the steps needed to prepare Pen Steel for sale.

Steps that improve profitability today, and boost value for the future

When Penny first spoke with her CPA firm, they stressed the importance of EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). But learning how to produce this report well would take more than a simple explanation. She knew she had to reduce debt, while maintaining or increasing annual sales. She had to hold costs, keep the right people, and make wise equipment investments.

Keeping debt down while trying to grow your business is no easy task. It would require a deeper understanding of her company’s finances and profitability. Since she began working with Mary, Penny has been able to see a more complete picture of those finances, allowing her to identify areas of improvement and take action. She also has a more reliable way to project business performance than ever before.

“Mary has basically created a crystal ball. A crystal ball can show you the future. Hers shows me what has occurred at Pen Steel to create accurate projections for future performance.”

-Penny Rosso, Owner/President, Pen Steel, INC.

Penny and Mary meet every month to peer into the crystal ball, no magic required. Mary’s comprehensive knowledge of financial reporting and knack for turning those numbers into projections helps Penny prepare for the coming months, crafting plans to deal with short-term and long-term goals.

This kind of financial visibility became especially valuable to Penny when COVID-19 and subsequent lockdowns hit the USA in early 2020. Businesses need all the information they can get to survive volatile market conditions. With Mary as a financial services partner, Penny was able to take steps to protect her business while understanding the data that justified those decisions.

Don’t climb without a guide.

Preparing your business for an eventual sale is a complex process that requires years of planning and execution, especially if you want to earn a sale price worthy of your investment. Penny Rosso has built something truly special in Pen Steel. What began as an inkling in Penny’s mind became a real company that has grown and adapted over the years.

She carved out a unique position in the steel industry thanks to her knowledge, experience, hard work, and perhaps most importantly, heart. Penny’s heart for her business is an impressive thing to witness. And it’s something she needed her financial services provider to understand and connect with.

Mary Ferry listened. Penny noticed that same drive she has to deliver for her customers. To these two business owners, providing minimum services isn’t enough. Like Penny, Mary is invested in the success and comprehension of her clients. This recognition gave Penny the confidence and understanding she needed to employ sound financial practices and get a head start on an eventual sale.

Whether selling your business is a distant prospect or an immediate concern, there are steps you can take to improve your business’ reporting and budget projections right now. These steps will clarify your path to sale, and vastly improve your financial awareness for decisions today.

Advantage Insights offers Financial Management services for all kinds of small businesses. Whether or not you’re thinking about selling, financial management will help you gain a more comprehensive understanding of your business. 

Advantage Insights gives clients the tools and training they need to start putting their financial information to work for them.

If you want to understand how Advantage Insights can help you save money and time, while maximizing profits, reach out for a free consultation!

For More information, call 402-281-3785 or email info@youradvantageinsights.com