Watch your thoughts for they become words.

Watch your words for they become actions.

Watch your actions for they become habits.

Watch your habits for they become your character.

And watch your character for it becomes your destiny. What we think, we become.

My father always said that… and I think I am fine.

–Margaret Thatcher

The Friday March 22 edition of the Wall Street Journal contained a nice surprise for us. The front page of the Marketplace section had the following headline “Plywood Becomes Hot Item as Housing Market Recovers”. What a breath of fresh air.

Not be a political but I lean toward skepticism regarding official government statistics. The WSJ article and mention of potential plywood shortages in the near term was the first legitimate sign of a housing recovery I’ve come across.

We need the housing market to recover. It is starting. Next we need the job market to recover. The commercial real estate market is not going to heat up significantly until employment gets going and more companies need office space.

We have a long ways to go but the sun is finally starting to break through.

Note from Ron: We have a guest posting today. The post is not a sales piece however I believe they offer a great service.

Healthcare reform is here to stay. The short answer to “Does healthcare reform apply to me?” is: YES.
Large Employers: Employers with 50 or more full-time equivalent employees are required to provide health insurance for their workers or face fines (which can range from $2,000-3,000 per employee)beginning in 2014.
Small Employers: On prevailing wage jobs, large contractors with the mandate for coverage will have a lower payroll burden than small contractors because they are using the fringe to pay for health insurance. And don’t overlook the importance of attracting and retaining talented workers – they will be looking for jobs which provide health insurance.
Individuals: All individuals are required to have health insurance beginning in 2014. Those who do not will face penalties which will be included on their income tax returns.
Plus, providing benefits to your employees is the right thing to do. Coverage provided with fringe dollars is paid with pre-tax money and employees who are not covered at work must be underwritten on their own and pay potentially higher rates with their after tax dollars. You have fringe dollars specifically earmarked to provide benefits and significant payroll and insurance costs savings when you do.
You have just over a year to get into compliance with PPACA (also called the Affordable Care Act or ACA). The good news? As a government contractor working on prevailing wage jobs, the funds to cover providing health insurance for your workers are already there – included in the wage determinations!  In addition to avoiding penalties, when you use the fringe portion of the prevailing wage to provide benefits like retirement plans or health insurance for your employees, these dollars are not subject to payroll burden. This can result in significant savings over the life of a project.
Some contractors may believe the fringe to be “the employee’s money” but this is not so!  The fringe is an employer contribution; therefore, the employer is in the driver’s seat when it comes to deciding how to allocate it. Letting employees know that the decision to use the fringe for health insurance is a healthcare reform requirement may ease their objections to not receiving the fringe as cash.
There is no doubt that the ACA and all of its new regulations add a whole new level of complexity for government contractors who already have to worry about prevailing wage laws. Paying fines in addition to the expense of paying fringes as additional cash wages is a double hit on your bottom line. Can you afford to take that hit? If other bidders are benefiting from savings on payroll burden and you’re not, will your bids be competitive?

Contractors can no longer afford to wait on implementing the new mandates. It’s time to start figuring out how to price in the additional costs for bids you have already won and those you are bidding on right now. What if your company currently has less than 50 full-time employees, but the project you just won will take it over 50?  Now what?  There are many, many questions around implementing the ACA. Fortunately, The Contractors Plan, powered by Fringe Benefit Group (an ABC Business Partner), is prepared to help government contractors understand the new legislation and how to comply with the multitude of new requirements. Fringe Benefit Group has specialized in providing quality benefits for prevailing wage workers for more than 30 years and we are fully prepared to help contactors navigate the maze of health care reform.

About the author:

John G. Allen, CRPS, is a regional vice president for Fringe Benefit Group, which has been helping government contractors design and administer fringe benefit programs since 1983.  He can be reached at 800-635-6912 or jallen@fibi.com.

One of my clients broke some exciting news to me the other day. She had discovered Excel’s pivot table feature. She was just amazed how quickly she could pull together answers to questions her yard man had regarding the number of days their equipment was in the field. Her mind was exploding with the different job costing, pricing, and financial analyses she would be able to perform. I assured her that her company’s bottom line would benefit greatly from her new hobby.

If you don’t know and use Excel, learn it. There is no more valuable tool for running a business than Excel. It is essential for job cost analysis, pricing analysis, production trending, and financial analysis. It is great for budgeting. It works pretty well for scheduling.

If you rely on your accounting system’s reports for these tasks you are making a mistake. Accounting systems simply can’t manage and slice and dice data like Excel.

The two most useful features of Excel are graphs and pivot tables. Until you see what pivot tables can do you don’t know what you’re missing. Take a few minutes, hop onto www.YouTube.com and search for Excel Pivot Tables.  Watch a handful of video samples. You’ll be amazed at the things it can do for you.

Do yourself a BIG favor. Learn how to use Excel.  You can thank me later.

Look in the mirror. Ask the person staring back at you “Am I controlling my profitability or are my clients and competition controlling it?”

Your answer reveals the likelihood of reaching your desired financial and personal goals. If you approach your business with confidence, commitment, and determination to control the profitability of the projects you choose to work on then you will in all likelihood be successful and profitable. If you believe that you have to take what is given to you, that you have to compete against under-priced competition and work for disorganized clients then you’re going to end up scraping out a living…at best.

Unfortunately, we rarely meet a contractor who believes, truly believes, that he controls his destiny.  Most contractors feel that they have to accept the low-price take-it-or-leave-it offers their clients extend. They feel they have to accept the poor sequencing and never-ending hurry up and wait demands placed on their field crews by the onsite project leadership.

You don’t have to be passive. If you step up, stand your ground, push back, learn to sell, and know when to walk away from poor opportunities you can make a lot of money in the construction industry.  If not, your business’ end is just as certain as death and taxes.

The following was emailed to me from one of my most cherished contacts. She passed along some great news about a service you might want to check out. Thanks  – Ron

Dear Friends,

As many of you know, Tridon Industries was financially crippled after a fireproofing project that we performed was not paid by the parties involved.  Granted, we were not the only ones that were hurt by the callous disregard for our livelihood but it put my company, employees, their families and my family in jeopardy.  It is and will be a long road to offset the $250,000 loss that we sustained but we are slowly pulling ourselves up by the boot straps and marching forward.  As I am sure every business owner can understand, especially those in construction where the net margins are in the 2-5% range, this type of financial loss can put a severe strain on even the hardiest of companies and it has for us.

Surprisingly, we learned after the fact of a little known secret that would have saved us from having to go through this hardship.  If we had insured our receivables to include this project, we could have received 90% of the outstanding amount due minus the deductible and a portion of our legal fees would have been covered by the insurance company.  The secret that we have discovered is known as Trade Credit Insurance and for all businesses that provide a service and/or sell a product; it has proven to be a life saver over and over again at least for the companies that knew the secret!!  I sincerely wish I could go back in time to 2008 through 2010 and had purchased a Credit Insurance Policy to safeguard our accounts receivables.  It would have protected us from clients that filed bankruptcy; insolvency and there were a few of those; and/or companies who failed to pay their legitimate bills. It would have freed up a lot of cash as our Banking Loan Officer would have increased our credit lines knowing that the receivables were insured.  One of the primary benefits of the policy is an increase in sales without the worry of additional personal collateral.  I hope that by sending this letter you can learn from our experience without having to endure a similar financial pain.

After much contemplation and belief in this specific insurance product ourselves, we decided to purchase the Credit Insurance Policy against future losses because after all we are in the construction industry and it is becoming the norm rather than the exception.  We believe so strongly in the benefits that this type of insurance has to offer especially for small companies that we made the decision to insure our receivables and are waiting to hear the outcome as far as the credit worthiness of the customers that currently owe us money.

After much research into the different brokers, we decided to go with TCI Advisors, Inc. and the reason:  they are small business owners themselves that have combined o75+ years in construction; manufacturing; supply chain distribution, insurance, marketing and customer service experience to make this company a formidable force to be reckoned.  In addition, they have walked in our shoes and that is the reason they started the company.   So far we are learning a lot about what we should be looking at versus what we have all in the construction industry have been trained to overlook.

Considering all of the money that we as business owners spend on insurance coverage, this policy is a definite must to avoid the pains that Tridon Industries went through.

If you would like to talk to me about the Benefits of Credit Insurance please feel free to reach out to me at 800-760-8044.

In the current political and economic climate, it is foolish not to consider using Credit Insurance to safeguard your Accounts Receivable Assets.

MaryBeth Yannessa
President

Tridon Industries, Inc.
371 Circle of Progress Drive
Pottstown, PA 19464

Phone:  610-323-6800 extension 101

Fax:  610-323-8401
PAOAGHIC #: PA013941
www.tridonindustries.com

Tridon Industries, Inc. is a Certified Woman Owned Business!!

Ask Me How I can Help with Construction Defect Problems!!

I’m late getting the word out on this service. John Allen of the Fringe Benefit Group reached out to us in September to bring what turns out to be a great service to our attention. John even flew into town to meet in person to show me The Contractors Plan (www.TheContractorsPlan.com).

The Fringe Benefit Group offers a benefits plan for prevailing wage workers. Among other things their plan should help you reduce payroll burden, offer better medical benefits to your workers, simplify recordkeeping and administration, and most importantly keep you in compliance with the labor department, IRS, and state agencies.

If you happen to be a non-union contractor who does a significant volume of prevailing wage work you should reach out to John and get the low down on John’s service.  You can reach John at (512) 663-0709 or jalllen@fibi.com.

It’s the time of year again when contractors realize they have worked their butts off all year for little or no profit. How do I know this? The calls start rolling in.

Late December / early January the tire kickers come out in force calling about our coaching services. They tell us their tales of woe and politely, cautiously ask if we can help.  We can almost always help if they didn’t wait too late. Sometimes they have. Usually the caller just can’t bring himself to spend a few thousand dollars getting his business squared up.

I’ve never understood why contractors have such a hard time admitting to themselves they might need outside assistance with their business. Small business owners in almost every other industry reach out for help. There’s something in the hearts and minds of contractors that makes them hesitant to retain help. Why are they so resistant?

Professional coaching and consulting is almost always a small investment in light of the material, labor, and marketing costs their business suffers. The small investment observation is based on the assumption that a contractor doesn’t go with a consulting firm that is going to get into his pocket for $30K or $40K in a couple of months. There are a few of those consultants out there and they need to be avoided like the plague.

Most coaches and consultants are going to run between $7K and $20K for a year’s worth of hands-on assistance. Everyone of them, if they are remotely decent at helping contractors, will impact your bottom line by at least twice that much just with a couple of recommendations regarding the work you take, avoid, or successfully recover through a difficult change order. Everything else they help you with throughout the year will be gravy…yet highly valuable.

If you’re not happy with your bottom line and haven’t been for more than a couple of years it’s time to get help. Whether it is with us or another industry expert. Get help. Don’t keep rolling your thumbs while your business chokes to death on low profit and slow pay. Take action. Get help.

The next seven minutes will change your life as a contractor!

usctca.com

Many of our viewers have asked how we started! This video blog is a little lengthy but it tells our story.

Enjoy

Ron and Guy