I’ve told dozens of people about this amazing presentation Frank Kern delivered a few years ago at Rich Schefren’s Business Acceleration Program work shop. I originally got access to it through one of Schefren’s DVDs and later through an online service offered by Frank.

Being a master of technology, Frank made it nearly impossible to copy and share with others. I’m not even sure Guy has seen it.

The presentation is a real eye opener. Frank calls it “Core Influence” but it really should be titled “Your Perfect Groundhog Day”. Frank leads the viewer through an exercise that helped him finally understand what he truly valued and enjoyed in life. It’s a fun little exercise that grows more and more difficult and valuable the more thought you put into it.

Frank’s exercise is perfect for every business owner who isn’t sure what his or her long term goal is. What life he or she is striving to build. What the end of the journey would ideally look like.

Frank has never before made this presentation available before outside of the one package I was involved with. He is now sharing it with the world. All it takes from you is an active email address and about 60 minutes of your time.

To watch the video, click on the link below. You don’t want to miss this. Frank is always good for dozens of laughs and he is at his most entertaining and most thought provoking in his Core Influence video.

Click here to watch the video.

You can thank me later.

Have a great night (day, afternoon, whatever).

Ron

The lead article in my local Business Journal was on the recession’s impact on our architect community. The author’s sources estimated that 30% of the city’s architects had been put out of work. AIA National estimates that 40,000 positions have been lost nation wide since July 2008.

My heart goes out to everyone who has lost their job, but it especially goes out to our architects. Few in our industry realize how hard an architectural degree is to earn and how poorly they are paid.

I will never forget my first week in college. My dorm floor was flooded with wanna be engineers who were getting settled in to our new digs, getting used to a class load of physics, chemistry, and calculus and figuring out who our new friends were. We had all received a shock at the difference between our college courses and our high school courses. But we had it easy compared to the guy that lived across the hall.

One week into school, literally our first full weekend, this guy was having to pull an all-nighter. And guess what field he was studying?

You got it.

Architecture.

His all-nighters didn’t stop that weekend. He pretty much had to pull them for five years. That degree is crazy. It takes such incredible talent and dedication to earn and when they enter the working world, they get paid peanuts.

The article went on to mention a trend that contractors have been experiencing: even when you make a selected short list, the list isn’t really very short and it is filled with competition that is every bit as qualified.

Guy’s last blog entry mentioned that his show audiences had enjoyed decent years.  Those contractors probably represent a very small segment of the industry. The cold hard data shows that the implosion of the banking industry has taken a severe toll on the construction industry.

A lot of great, hard working, salt of the earth people are struggling to get by. Hopefully, the people in D.C. and on Wall Street can get their act together and straighten this mess out.

I can’t believe it is February already! Looking back at my calendar I was amazed to see I was on the road for 19 overnights in the month of January. With that being said I have met dozens of fine contractors over the last month. I put on thirteen presentations and when I polled the attendees the majority of participants had a year in 2009 that was equal to or better than that of 2008. Even though it was a non-scientific survey it was reassuring to know that some contractors are not only surviving but also thriving.

The interesting question is what are they doing differently?

I will be sharing in an upcoming newsletter some of the informal results I have experienced as of late. One thing I can report back now,  is that the trade-show attendees were serious about getting good information and intent on learning new concepts to help further develop their business.

Stayed tuned for my next newsletter in just a couple of weeks.

Guy

In our last post on Construction Bonds, we’ll take a look at three other common risk-mitigation tools: Site Improvement Bonds, Subdivision Bonds and Supply Bonds. The first two are key components for residential and commercial construction projects. But there is one distinct difference. The Site Improvement Bond is only for existing structures. Subdivision Bonds are required for new structures. Let’s start with Site Improvement Bonds.

Site Improvement Bonds

These basically guarantee that a contractor follows applicable building codes and regulations when making improvements to an existing property. Site Improvement Bonds can cover an array of fixes and improvements, including things like sidewalk repair, storm drains, curbs and sewers. The bond will usually state the anticipated cost and duration of the project. On many projects, these bonds must be in hand before a contractor can get a construction permit or record a final parcel map.

Subdivision Bonds

These are for contractors building new subdivisions. The Subdivision Bond helps ensure that a project will be built according to contract and applicable laws and regulations. They cover most elements related to the construction project, including houses, gutters and streets. Contractors typically need these to file plats with a municipality before the project’s completion.

Supply Bonds

The Supply Bond is pretty straightforward. In essence, they ensure that supplies will be provided as per the contract. They also provide a degree of financial protection in the unlikely event that a supplier defaults. These bonds are often purchased during the beginning stages of contracting, in advance of the start of work.

The Market for These Bonds

The market for both Site Improvement Bonds and Subdivision Bonds has fluctuated in recent years. Housing developments have stalled or collapsed because of economic peril and a depressed housing market. The amount of the bond will change depending on the project. Bond premiums will shift based on that as well as on the financial and work history of the contractor. Underwriting for these bonds remains tight. Supply Bonds aren’t typically as costly as other Construction Bonds. But, like any other bond product, the final cost will depend on several factors, especially the applicant’s financial health and history.

The contract bonds series was brought to you by Surety Bond Co. , leaders in surety bond education.

After much bantering back and forth over the past several months, we have decided to adjust our RISK-FREE offer for club membership. A new membership now has two types of guaranteed satisfaction.

You can sign up for a free 30 day trial membership OR take advantage of our three month or annual membership discounts complete with a 30 day money back guarantee.

Don’t wait too long to take advantage of this most generous offer. As soon as we strike our deal with a third party service provider who shall remain nameless, the $19.98 monthly full access price for new members will go away.

We will still offer a base rate of $19.98 but it no longer give new members access to our presentations and other advanced features.  Existing members will be grandfathered as long as they keep their account in good standing.

Act now and gain full access to all of our proven solutions for 30 days absolutely FREE. Click here to join.

We’re pleased to announce that the discussion board on our membership site is now active.

Members can introduce themselves, ask questions, seek opinions, and compare notes. We have created sections for each major business function to keep conversations focused and organized.  The board contains all the usual discussion board features with one notable exception: in this case only contractors committed to growing their business will be posting. That’s quite a change from most discussion boards.

If you’ve ever ventured over to a free discussion board, you’ve probably noticed the discussions often devolve into petty little cat fights. We will not allow that to happen on the club’s board.

Guy and I will be monitoring everything and clarifying suggestions that we believe violate sound business practice. That feature is missing from most forum dialogues.

Hope to see you participating on the forum.

Your friends and champions,

Ron & Guy

As our series on Construction Bonds draws closer to the end, we’re going to take a look at two big ones — payment and performance bonds.

These are very significant and similar bonds. And are also among the most common construction bonds in existence. In fact, contractors will often see these bonds issued together as one “Performance and Payment Bond.” Their individual and collective function isn’t much of a mystery.

What They Provide

A performance bond ensure that a contract will be followed to the letter and that work will be completed — or that appropriate financial compensation will follow if the wheels fall off. A payment bond guarantee that workers, suppliers and other key stakeholders get paid.

These bonds are crucial for most construction projects, especially those that involve public tax dollars. For example, mechanics liens can’t be placed against public property, so payment bonds are basically the only protection available. These key bonds are actually required by law for most public works projects, including all federal projects that cost more than $100,000.

Filing Bond Claims

If a subcontractor or other party hasn’t been paid, they can file a claim on the bond. If it’s deemed valid, the surety company issuing the bond ensures the claimant is properly compensated, either by the contractor or, at last resort, the surety itself. Then the surety company will seek to recoup the damages from the contractor.

Purchasing These Bonds

Performance and Payment Bonds are typically purchased during the period of contract negotiation for the project. Surety companies and surety bond issuers scrutinize an applicant’s financial history, company and work history, management team and other key factors before deciding whether to issue a bond.

Rates for these bonds shift depending on an applicant’s unique financial and credit status. The market has leveled off a bit in recent years, but contractors should expect a stringent, straightforward underwriting approach.

Contractors without solid credit or significant experience may wind up needing high-risk bonding. There are companies that specialize in these types of bonds, although the rates are definitely higher because of the added risk.

This guest post was written by Kevin Kaiser of SuretyBonds.com.

Is one of your projects on hold due to funding problems?

If so, we may have found another funding source for the project’s developer. Pass the following onto them (via the General Contractor).

Carl Settles
NorthStar Funding Group
877-281-6660 (toll free)
909-996-6795 (direct)
909-474-8903 (fax)
nsfg@northstarfundinggroup.net
www.NorthStarFundingGroup.net

APPARENTLY NorthStar Funding will loan up to 90% of project value.

If the unstable bank situation is holding up one of your projects, give Carl a call to see whether your project may qualify.

If you are a subcontractor, copy and past this information into an email and send it the project’s General Contractor or CM. With the construction economy dragging as badly as it is, aggressive action is in your best interest.

If you’d like to discuss with me before calling Carl, drop me an email (ron@filthyrichcontractor.com) or call 913-961-1790. I’ll share what I know.

Be Forewarned: we are not vouching for Carl or NorthStar. We know nothing about the legitimacy.

Good luck,

Ron

by Kevin Kaiser

Maintenance Bonds are another key cog in the world of Contract Bonds.

They’re also an essential, typically mandatory method of risk management for project owners, municipalities and others.

How They Work

These surety bonds come into play upon the completion of a construction project or some other job requiring legitimate bonding. Maintenance Bonds guarantee that the work performed is up to code, follows the contract and is otherwise without defect or problem. These bonds generally provide protection for project owners against design defects, workmanship faults and other problems that can occur during the construction term.

Project owners, governmental authorities and others with a financial stake can file a claim against the Maintenance Bond in the unlikely event that there’s a problem. At that point, the company that issued the surety bond is responsible for ensuring the issues are corrected or the parties are financially compensated.

A Short-Term Solution

Project owners need to remember that a maintenance bond is a short-term solution. They are only effective for a limited time to cover any problems that may stem from faulty work. Once they expire, any problems or defects are the responsibility of the owner. These are not a substitute for insurance or some other type of property or site maintenance plan.

How to get a Maintenance Bond

Getting a maintenance bond is very similar to getting a bid bond. In case you missed that post here’s a little refresher.

It very is beneficial to find a agent who specializes in construction bonds as they will be able to help streamline the process for you. You will also be expected to give the same information required of bid bonds, including the application, owner’s resume, business financial statements, and the owner’s personal financial statements. The contractor will also have to sign an indemnity agreement so the surety won’t have to worry about financial loss, so any claims from the bond will eventually be repaid by the contractor.

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The contract bonds series is courtesy of SuretyBonds.com, a nationwide surety bond agency.

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Kevin Kaiser is a principal with Surety Bonds.com, a nationwide surety bond agency.  Please visit surety bonds to learn more about contract bonds or request a quote.

Bid Bonds have become a necessity in the construction field. Not that long ago, unscrupulous contractors could issue low-ball bids to land a contract and then later try to increase the price or simply refuse to finish the job. The emergence of Bid Bonds eliminated those types of shady deals. Today, Bid Bonds are a mandatory aspect of almost all commercial and residential construction.

What they are
Bid Bonds are typically required when a contractor is bidding on a construction project. These surety bonds guarantee that the contractor has the financial standing to accept the job if it is awarded the bid. The Bid Bond also ensures that the bond issuer will make good on a Performance Bond upon the awarding of the contract.

Bid Bonds also provide financial protection for project owners. If a contractor is awarded a bid but ultimately fails to start the work, the project owner can file a bond claim and recover the difference between the lowest bid and the second-lowest bid.

Withdrawing a bid
In general, contractors are allowed to withdraw a project bid before the bids are officially opened. There are also cases where developers allow bids to be rescinded without financial penalty. But in most cases, once the process is complete and the project has been awarded, contractors who bit off more than they could chew will have to take a financial hit for withdrawal.

How to get a Bid Bond
These bonds are typically issued by surety companies or insurers. Finding an agent who specializes in construction bonds is always a good idea. Contractors will have to submit a host of financial and even personal information in order to secure a valid bond.

The underwriting process for  bid bonds is stricter today after a wave of contractor defaults in recent years. Previously, the market relied on looser practices. Now, contractors can expect to submit the following types of information:

• Application - Includes basic contact information.
• Owner’s Resume - Provides an overview of the contractor’s experience and potential ability to complete the project.
• Business Financial Statements - These will include tax records, revenue statements and a host of other pertinent financial documents so that sureties can have confidence in the financial standing of the applicant.
• Owner’s Personal Financial Statements - Sureties will also evaluate the personal holdings, credit history, income and other financial elements of the applicant.

In most cases, contractors must sign an indemnity agreement that insulates the surety against financial loss. Any bond claims paid out by the surety will ultimately be recouped from the contractor. Surety companies utilize a rigorous underwriting system to ensure they’re not on the hook for losses.

Small Businesses
The U.S. Small Business Administration provides a surety program for small businesses. Through September 2010, the SBA is guaranteeing bonds for public and private contracts up to $5 million. The guarantee rises to $10 million for some qualified federal contracts. This program aims to help smaller contractors who might otherwise struggle to get bonded through traditional channels.

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Kevin Kaiser is a principal with Surety Bonds.com, a nationwide surety bond agency.  Please visit surety bonds to learn more about contract bonds or request a quote.