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.

It’s not to late to attend Pavement Live. This new concept for asphalt maintenance and paving contractors includes 10 live demonstrations, conferences and an exhibit hall with the latest equipment. I am proud to be delivering five presentations starting on Wednesday thru Saturday. Their will be an array of industry experts conducting many different classes.

I will be teaching the following classes at this year’s event:

Wednesday, November 30  9:00am – Noon

W4 Developing a Hands-on Strategic Plan for Pavement Maintenance Contractors

Wednesday, November 30  3:00pm – 4:30pm

A5 Repeat Sales: The Secret to Long-term Success

Thursday, December 1   8:00am – 9:30am

B10 Increasing Efficiency in the Field

Thursday, December 1  10:00am – 11:30am

B14 Profitable Pavement Maintenance Job Costing

Saturday, December 3   8:00am – 9:30am

D25 Gotcha! Attitude is Everything in Sales

Complete details are available at www.PavementLIVE.com or by calling 800-827-8009. I’m looking forward to seeing you!

I look forward to seeing you there!

Guy

I just could not wait any longer. Ignore the stitches in my nose. (you can hardly see them)

I have been coaching clients who seem desperate and want to go back to chasing every lead that comes in. It is obvious that this is a huge mistake for most of you. So in conjunction with our recent Time Management Blog we strongly encourage you to listen to our latest video blog Stop Chasing Your Tail.

Reality is that contractors, like the rest of us, desire to pay the least amount of taxes possible.

Unfortunately many contractors are putting forth a last minute push to get every possible project completed as possible. The threat of winter creeping in cold climate markets increase the pressure.

We often realize contractors forget to prioritize important stuff. That is why we are reminding you the time to plan on how to minimize your tax liabilities for 2010 is now. We encourage you to set an appointment with your accountant now and start bringing the data together on what type of profit you anticipate having this year.

This type of approach allows you to purchase equipment, prepay future liabilities and brain storm on how you will minimize your tax exposure.

Even if you think you are losing money in your business and feel you will have no tax liability we want you to consult with your tax expert. This way you can prevent any surprises that you can not do anything about.

We hope you are making wheel barrows full of dough. If you aren’t making the type of profit you want and would like some advice on to become highly profitable feel free to call us for help.

Happy Planning,

Ron and Guy

While describing the type of business he didn’t want to be,  my client threw out an abbreviation that I thought was golden: AFAB

Anything For A Buck

He understood that his recent pattern of doing anything for a buck (AFAB) was re-enforcing several poor habits among his team – himself included. It was teaching them to act like typical me-too contractors who fight clients and designers every step of the way over every little cost add as he had no other choice due to the manner in which the jobs ended up in their hands (by being the low bidder).

All the result of AFAB.

Companies that grow do not pursue AFAB. They identify profitable niches and customers they can excel with and build their businesses around those customers.

That’s what my client is working towards and that’s what you should be working towards too!

Just finished my three week preparation for the LEED AP test. Pretty much had to put everything aside, including launching our new private club, to take my shot at the last opportunity to become a full LEED AP “easily.” I got lucky and passed. Not sure how.

Never have I heard of or experienced such a difficult test that so many people have passed with no intention of putting their certification to use.
Hundreds, probably thousands, of contractors have passed down the edict that their staff shall earn their LEED AP. For the most part, they are using them as a marketing tool as most of the certification processes will probably be led by design consultants.

I plan on putting my certification into action at first chance just to stay ahead of the game.

LEED is going to bring tremendous new opportunities and challenges to your business.

Don’t get left behind.

The last few weeks I’ve been cramming for the LEED Commercial Interiors AP exam. It’s a bear of material to memorize. It’s also turning out to be information well worth knowing.

Rest assured, over the next few years green building construction as defined by the LEED certification process is going to be a Tsunami of change crashing upon the construction industry.

A huge chunk of public work is going to require LEED construction techniques. I’ve been hearing rumors about pressure being applied to Fortune 500 companies who receive government contracts. Don’t be surprised if several of the techniques work their way into building codes.

No trade is going to be left untouched. My former trade is one that is suffering some of the most dramatic impact.

Prior to jumping sides, I was a consulting mechanical engineer who designed, commmissioned, and retro-commissioned many a mechanical system. I often went into the field to take performance data on existing sytems, designed retro-fits, verified system start-up, tested control systems, and tuned control loops. Many of the services our select manufacturing clients valued – and no commercial clients ever were willing to pay for – are now being required by LEED.

To say that I am shocked and delighted would be a grand understatement. The positive impact on mechanical engineers, mechanical contractors, test and balance contractors, and operations and maintenance staffs is almost mind-boggling. Finally, buildings and their occupants will receive mechanical systems that operate as they should to maintain comfort and health with minimal energy consumption.

Your trade will be touched. Bank on it.

Your costs will rise as productivity drops, materials cost more. material handing consumes more time and the volume of paperwork sky rockets.

My recommendation is:

1. Learn the LEED requirements that apply to you.

2. Take on a couple of small LEED projects to get a feel for the change in job costs.

3. Build your strategy to take advantage of competitors who fail to respond to the rapidly changing landscape.

Good luck.

Ron

In case you haven’t heard contractors have a new political spokesperson.

“Joe the Plumber” was tossing a football in the front yard with his son while presidential candidate Barack Obama was canvassing the area where he lives. Obama approached Joe and solicited his questions. Joe is a plumber in Ohio who desires to purchase the company he has worked for for many years.

The rest is history with Joe making appearances on all the prominent talk shows and becoming a focal point of the third debate. If you’d like to see some of his interviews they are easily accessible by doing a “Joe the Plumber” search on the Internet.

First I’d like to start by saying that I think this guy “Joe the Plumber” is pretty bright and intuitive. Some pundits say that he has articulated some of the issues better than any of the candidates.

Joe asked Obama a fair question about how his policies would affect him if he purchased the plumbing business he was working for. Since that debut Joe “the Plumber” Wurzelbacher has been launched in the national political spotlight for both the Democratic and Republican campaigns.

But let’s not forget the real issue! Taxes!

Yes, I believe that taxes for small businesses are too high. However, I would never advise a contractor to stop growing their business to avoid paying more taxes.

Go out and grow your business by hiring the right people, getting the right customers, acquiring the proper tools and equipment to complete the work efficiently and profitably; and retain a good certified public accountant to help you with your tax planning.

With proper advice from a sharp accountant you should be able to retain at least sixty cents for every one dollar you earn. So go out and get more sales to make more money! By the way a side benefit is that you will stay in business longer.

The government needs to be accountable to all taxpayers for how they spend our money.

I’m not sure that “Joe the Plumber” represents the majority of contractors since he doesn’t even own a business today. But if and when Joe does by that plumbing business I’d rather that he decides who gets raises based on their contribution to the company and the merits and he puts into place rather than the government spreading his company profits equally to individuals taxes payers because they fall into a certain tax bracket.

Best of luck with your business,

Guy