The Secret of Bonding For Your Organization

This is the Bonding Company’s worst nightmare. In this 160th article of our surety series, we will cover the situations in which no Performance or Payment Bond is needed! Some of the projects are big and federal, some are private, ALL are unbonded. Here we go!

As a point of reference, you may expect that federal, state and municipal contracts demand a Performance and Payment (P&P) Bond equal to the contract amount. Normally they do. General Contractors working for a private owner, such as the construction of an office building or apartment project, may face the same requirement. This can apply to subcontractors, too.

Federal Projects

This area includes all branches of the federal government. Examples: Army Corps of Engineers, General Services Administration, Dept. of Energy, etc. Their contracts are administered following the rules of the Federal Acquisition Regulations (FAR).

The FAR says that no P&P bond is required on contracts under $150,000.

For contracts $150,000 and higher that require security, there are times when the bond requirement may be reduced below 100{5923e7eab219d0b876fe9a03b5ce0c1b70729033132583872f84b36f0bdcb95e} or waived entirely. These include:

  • Overseas Contracts
  • Emergency Acquisitions
  • Sole-Source Projects

If the bond requirement is mandatory, the FAR lists acceptable alternatives:

  • US Government (investment) Bonds
  • Certified Check
  • Bank Draft
  • Money Order
  • Currency
  • Irrevocable Letter of Credit

Here’s another option: For contracts performed in a foreign country, the government can accept a bond from a non-T-Listed surety. (Circular 570)State and Municipal Contracts

The bonding requirements may vary by state, but generally their flavor is similar to federal.

Private Contracts

Anything goes. On private contracts, the owner has complete discretion to set the bonding requirements – including no bond needed. Keep in mind, the cost of the bond is added to the contract, so the owner can save some money by not requiring a bond. They may take other precautions to protect themselves. Some examples:

  • Require a retainage. These are funds that are held back from the contractor and only released when the project is fully accepted
  • Lien releases may be required each month to prove suppliers and subcontractors are being paid appropriately
  • Funds Control / Tripartite Agreement – a paymaster is employed to handle the contract funds
  • Joint checks are issued to the contractor and payees below them – to assure the funds reach the intended parties
  • Physical site inspections to verify progress

The NightmareIn these articles we talk a lot about how contractors can obtain surety bonds and manage them. But it is interesting to note: A construction company could go forever, performing state and federal projects – and NEVER get a bond. It’s true!

If everyone did this, it would be the surety’s worst nightmare. But in reality, there are financial advantages to using P&P bonds, so bonding usually is the first choice.

Business Trends That You Should Follow

As you know, we live in an environment where it’s “blink,” and you missed it. Still, there’s always an urgent need to keep on top of what is happening so that you can stay ahead in business. I own several companies and, candidly, I don’t think there’s a single day I’m not thinking about how to make things better and improve our competitive advantage in our industries.

A couple of days ago I read an article about a luxury yacht company that had been in business for generations, and although they had client orders on hand, in the tens of millions of dollars, they fired everyone and shuddered their doors. They were hemorrhaging money and not paying attention to the changing winds.

The reality is that I can sit here today and write what you want to be looking for in business trends and then a year from now, write the same sort of article with different ideas to keep an eye on as business and society evolve. Still, there are some areas that I think will remain constant and you should pay attention to in your company.

Always Pay Extra Attention to Millennials

For decades and decades, the “darling” of generations were the Baby Boomers because of their sheer size and buying power. As the Boomers are now seniors, the same can be said about Millennials. They will be, and already are, a force for years to come and they are the first generation that is pure digital natives. Your products and services should be marketed to them and how they think. By 2020, Millennials will have an estimated $1.4 trillion in spending power.

Get Comfortable With AI, IoT, and ML

What used to be buzzwords such as AI, IoT, and ML, are not anymore. They are not the future; they are the present. Most of you know about AI (Artificial intelligence), IoT (Internet of Things), but maybe you have not heard about ML (Machine Learning). Machine learning is when computers do things without being programmed to do it because they are learning it for themselves. Through machine learning, we are given self-driving cars, excellent web search tools, practical speech recognition programs and a host of other platforms. As technology evolves, all of these elements will play a more substantial part in life and business.

Remote Workforce

I have a preference for my team to be onsite, but for some functions and aspects of our work, these elements are outsourced. Currently 40{5923e7eab219d0b876fe9a03b5ce0c1b70729033132583872f84b36f0bdcb95e} plus of American workers are doing some work remotely, without having to be present at their place of business all the time. This trend creates demand for adequately training remote employees through video conferencing platforms, especially for social media and programming positions. All that is required is a computer and Internet.

Get Past the Clutter

The way you brand your business is essential. People are drowning in data and information, and you have to be able to cut to the chase immediately. Branding, which encompasses the name, logo, etc., creates instant identification. With excellent branding, you are perceived as an authority, successful and trustworthy because you pay attention to the details. Also it makes prospecting easier. Customers find you. You can hire better talent. Candidates seek you out rather than looking to apply for a position with an unknown company. Because of branding, it is easier to create more businesses under the same name.

Opportunity Exists in Buying Businesses

There are more businesses for sale due to the retirement of the Baby Boomer and Millennials will be buying them and then reinventing the companies they buy. Keep an eye out for your competition because there’s always an opportunity in looking to buy an existing competitor. For instance, you can buy their entire client base, or perhaps they’ve excelled in e-commerce, and you’re able to bring that into your portfolio. I’ve successfully purchased some of my competitors, and it’s only helped my businesses grow.

All About Business Etiquettes

“A man without a smiling face must never open a shop” or so the Chinese proverb goes. Truly, smiling goes a long way to lighting up the mood for a friendlier, more understanding conversation. This is true in business as well, especially when trying to make a business partnership. However, there are more business etiquettes beyond smiling and demonstrating these will show others that your customers and your business are worth respecting.

* Introduce everyone, even when in doubt – There is a proper way to introduce people to each other. First, introduce the person who is the most senior, using their full name and their job title or responsibility. Next introduce that person to the person who has lower authority. Make sure to also mention his or her full name. To end, you may mention some details about each other as a topic of common interest. When being introduced to someone, always stand up if you are sitting.

* A firm handshake – The way businessmen shake hands more often than not sets the tone between them. Giving a good, firm handshake will set a good first impression as it may eventually end up in a successful business partnership. If you are the host or the senior member, you should be the one initiating the handshake.

* Admit if you forget their names – Forgetting the names of people you were recently introduced to is not uncommon. If it happens, admit it and ask for it again as this shows that you give them importance.

* Sitting down for a meeting – Whether the meeting is in a restaurant or in an office, in a group or a one-on-one, it is best not to pull out the chair for anyone. In a business setting, everyone should dismiss social gender rules and treat everyone equally. When seated, never cross your legs as it may be distracting and disrespectful.

* Meeting in a restaurant – Contrary to business instincts, do not use your knife to break bread. Tear it off with your bare hands as this signifies your openness to your potential business partner. When finished with the meal, never push your plate away nor stack the plates. Try not to have any left overs as well. If your guest orders appetizers or dessert, you should be ordering as well. This avoids the potential awkwardness of having other people in your party eating and you have nothing on your plate. If you are the host, you should pay for your guest unless he or she insists otherwise or is against their company’s gifting policy.

* Dress properly – The way someone dresses is a form of nonverbal communication. Dressing appropriately for a meeting shows an automatic sign of respect for either the guests or for the host. Additionally, always check the dress code for an event as some events may require either more or less formal attire.

* Keep cellphones in your pockets – Never place phones on the meeting table and don’t use them during the meeting. Only answer calls that are urgent and excuse yourself from the meeting and take your call outside so you don’t interrupt the meeting.

* “Please” and “Thank You” – These two phrases show politeness in any conversation and it is all the more important in a professional setting. Saying “please” can be used as much as needed. “Thank you”, however, should be used once or twice as saying it too many times may lower its impact. As much as possible, give thanks to everyone individually after a meeting.

* Stay sober – Businessmen have lost reputations and careers because drunken behavior. Although none of the things said or done while drunk were meant, it is a clear sign of disrespect towards either the host or guests. Don’t embarrass yourself or your business. Know your limits and control your pace.

* Be genuinely interested – Always make eye contact in a conversation and make sure to pay attention to every detail the guest says. Take the time to ask questions as this shows that you were listening and interested.

* Double check emails – Simple mistakes can be made to derail a meeting or blow a deal. You may have date and time wrong for a meeting, left out some paperwork to be signed, or worse, your emails were sent to the wrong person and may potentially endanger the company.

* Use professional photos – When using your or anyone’s photos for business matters, always use a proper headshot. Businesses would need to look credible to other businesses.

* Greet everyone anywhere – Regardless of seniority, always greet people. You may never know that he may actually be your next business partner. When people greet you, it is imperative that you greet back.

* Don’t forget to smile – Just like the Chinese proverb, smiling works wonders in any occasion, whether in a meeting, during introductions, or in a business social gathering.

End on a polite note – When you need to leave, make sure you exit politely with either, “It was nice to meet you” or “See you at the next meeting”.

Understanding Dashboard Reporting For CEO

We live in a world of immense technical innovation and data is something many of us are immersed in, and there are times when there seems to be too much of it. Other times, we’re seeing a lot of information, but it’s not being presented in a way that is relevant and provides us a chance to make informed decisions. As the owner of multiple companies and brands, I spend a lot of my time looking at data.

  • Data informs the strategic goals for my companies.
  • Data helps me to understand what’s working and what isn’t.
  • There’s a direct link between some data, such as marketing for instance, and the bottom line of my companies.

There isn’t a day that I don’t walk into my offices, and I’m not looking at multiple reports, particularly financial reporting and sales or even asking my team to provide me analytics on things, such as our social media results. Data spans the gamut, and I can slice and dice every area of my businesses and see how we’re performing.Early Days

After I first when I started my holding company, there eventually came a time when the work of my team and I began to take off. All of the sudden I was asked for interviews and people wanted to speak to me and get my take on things. I always knew that as a CEO, it’s just not possible to be involved in every aspect and minute detail of the businesses. On occasion, I was asked a question that I couldn’t answer on the spot, although I was always able to provide at least some answer.

Dashboard Reporting

In those early days, I asked two of my team members to come into my office so I can tell them about the experiences I had been having in speaking to people outside of our organizations. I also told them that I was having trouble making strategic decisions because the information I needed was not the way I needed to digest it. Even though I was not part of every decision within the company, such as the lower level ones, I still needed to have critical information rolled up to me so I can understand the broader implications. And, it needed to be presented in such a way that it made my decision-making process effective. My team developed dashboard reporting for me that day which gave me the essential information about each of the business lines and also the totality of all of it.

Informed Discussions

As an example, I’ve had occasions where I’ve been asked about the number of followers on one of our social media platforms. Some people can consider it an irrelevant question that perhaps a CEO might not know, but that’s not the way it should be. As the chief executive, I should know the number of followers, clients, and issues that are outstanding for our brands, even if it seems minor. I may not need to know that the best hours for social media promotion for us, but I need to know the top-line information in all departments.

Old School Reporting

Dashboard reporting is an essential tool for business, and I ask my teams to create a lot of it internally. Yes, there are plenty of platforms today that give you their analytics, and that’s all well and good, but often it’s not what I need to know as CEO. If you’re the senior-most executive in your organization, don’t shy away from ad-hoc dashboard reporting that is prepared by your team members. Getting precisely the information you need–as you want to see it–is essential to making informed strategic decisions. And, the reality is that sometimes the ready-made tools out there are useful, but they’re not providing you the relevant data you want or presenting it in a way that you need to understand it.

Dashboard reporting provides clarity and insight to CEOs, so they understand information and can interpret it in a way that makes sense to them, in their role, and is not imposed due to the functionality of a software package or by others.

Benefit Of Saying No On Business

Recently, I was sitting around with my team, and we were talking about the stories of candidates who wanted to work at our social enterprise. We had a terrific chuckle around the table as we told stories about the people who really should know better.

Distance is a Problem

For instance, I had a person that interviewed directly with me. I mentioned to this person, who had an impressive resume that the drive to the office was 45 minutes each way, and that was on a good day. “No worries,” this person replied and then went on to tell me how much she wanted to be part of my innovative team of professionals.

We spoke for a long time and were moving forward in the process, and then one day, my vice president for administration got an email (they never call personally, do they?) and informed her that, in fact, the distance was a problem.

Too Complicated

A friend and colleague of mine was in discussions with her old tax attorneys, and the advisors informed her that they would be able to handle her complicated returns, which is international. All they needed was one extra month of time so they could deal with tax season, since the couple would be filing an extension.

Not too long ago, on a Saturday night no less, the couple received a call from the tax attorneys. It was two months after agreeing to begin on their returns to tell them that “on second thought” the filings were so complicated and they would have to verse themselves in international tax treaties, and they decided to decline. That resulted in frustration, a lot of scrambling, and expedited returns cost them more money.

Please, Say No

I’m sure you have had situations where someone tells you it’s a yes before it’s a no. Maybe it’s going out to dinner with friends, only to have your friend call you at the last minute to tell you that “something came up.” Maybe it’s your spouse who keeps on saying to you that they’ll think about something that you want to do, only to never give you a reply. Or, maybe it’s your boss who keeps suggesting there’s a promotion down the line (soon) if you work harder and the goal post just keeps on moving.

Can we all put an end to the madness and summon the courage to say that whatever it is doesn’t work? Wouldn’t you rather know something on the front-end, peel the bandage off so to speak, and move on with your life? In fact, the most successful people in business will tell you that they say no, often. It’s one of the best things you can do for yourself and others. For yourself, it conserves your energy and helps you keep focused on the activities that really matter to you. For others, you’re doing them a favor and saving them the aggravation of a more significant disappointment down the line.

Practice Saying No

Many people are fighters on social media with their big and bad attitudes, but when you speak to them in person, they’re people pleasers. No one is telling you to be rude or nasty with people, but practice the art of saying no. If when you look in the mirror, you’re one of the people that has a tough time saying no to anyone, make it a point to practice it. You’ll be doing yourself and everyone in your life a favor. Sure, you might end up with some initial resistance, and disappointment, but with time, you’re going to see that people appreciate your genuine attitude.

The reality is that people would prefer to know the honest truth, politely, then have you say yes to them only to waste their time and then tell them that you’ve changed your mind. Think about that the next time you’re inclined to tell someone what they want to hear instead of what you feel, which is that deep down–you don’t want to do it.