The Iraq Turmoil and Your Fuel Cost Index

Unfortunately, the chaos that is taking place in Iraq at this moment, will play havoc with the cost of fuel. Rumors are spreading that we could see the cost of a barrel of oil rise to $116 per barrel. That would add .40 to $1.00 to fuel.


In my weekly radio show, "The Contractor's Corner" on Mondays at noon (EST) I announce the cost of gas and oil for the opening bell of the week. This way, contractors can adjust their fuel cost index for their estimates for future work. I would think with all of this turmoil in the middle-east, that index needs to be increased.


In other words, if you are paying $4.00 a gallon for diesel, you may consider an index of $4.50 to $5.00. The same consideration should be applied to gasoline. This covers you for rising fuel costs in your estimates.


You will also see increases in materials and transportation rise. Expect the same for these items, and consider placing an escalation clause in your proposals and contracts.


Since pricing varies from area to area, you must determine what rice increase is best for you.

#TheContractor'sBusiness-BuildingCoach

Why the Future Looks Uncertain

We are hearing a lot of proclamations of a revival in the housing market. The media and Washington seem fixated on trying to hypnotize us that a magical recovery is taking place.

I won’t argue against that, I like you, welcome the increase in sales and work. However, it is too little, too late.

In 2006, I told many that they needed to be careful because the market didn’t make sense. I advised them to keep a toe in it, but to be cautious not to submerge themselves fully in it. Some listened and some didn’t.

I believe we are possibly looking at the same scenario right now, but at a much smaller scale. Right now, investors and the big home builders are fueling the market. Investors alone are pushing pricing by over-paying as much as 30% Rental properties are showing strong positive cash flows. However, other factors need to be considered for the overall, long-term BIG picture.

A slowdown in demand for aluminum is viewed as a precursor for slowing economic activity, much like copper and lumber, and so weakness here confirms other indications of a slowing global economy.

For the week, economic news was mixed as the Case/Shiller Home Price Index showed a strong updraft in housing prices with a gain of 10.9 percent year-over-year. Three other closely watched economic reports also posted positive numbers with consumer confidence and sentiment rising in May and the Chicago PMI registering 58.7. Bad news came from pending home sales, which missed expectations, and consumer spending and income, which were both weak and below expectations and reflected a consumer pulling back on spending while incomes remain flat.

The unchanging numbers of unemployed Americans coupled with a downgrade in consumer headwinds will add significantly to the U.S. economy. Initial jobless claims spiked higher on Thursday to 354,000 on expectations of 341,000 and the revised GDP report showed the U.S. economy limping along at 2.4 percent, well below normal recoveries and below expectations for Q1.

One last Coup de Gras and the biggest news is the sharp rise in interest rates. A 30 year fix is posting at 4.10% as of Monday morning. So the temptation for higher interest rates is showing its hand. This will be the significant game changer for our economy. I believe the Feds printing of easy money which has already created previous bubbles or contributed to them, could easily deflate any resurgence in the real estate market. So we have a wait and see situation.

Here is the outlook I see. The economy is your marketplace. Go for sales that are going to make you money. Use that money to pay off debt and build cash reserves. Since normalcy is not the norm, any other thought would be the equivalent of committing Hari Kari.

How to STOP Hurting Your Business!

Which is it, the economy or you that are hurting your business?

With the uncertainty about the economy, many are wondering what is wrong with their business. In many cases, the answer lies in your ability to come to terms with “how” you manage your business, not is “what” is happening to your business.

Typically, a business owner realizes that their business is in trouble. However, they fail to take corrective action. You should want more and care enough about your business that you will not allow, nor will you settle for mediocrity. I am going to reveal four common mindsets that will hurt your business if you fail to implement them properly.

Failure to build lasting relationships with your customers. Satisfied customers, people who have bought from you and who are happy with that experience, need to be cultivated. They need to know you appreciated their business, that you understand what is of interest to them, and that their powerful referrals are appreciated. People forget, don’t assume they don’t. Keep in touch. Make ‘special’ offers, and always ask for referrals.

Failure to prune your operation. Assuming everything is okay is a mistake! You will wake up some morning to huge problems. Take inventory, set standards, design standard operation procedures, and monitor performance. Don’t wait until it is too late. If something or someone isn’t meeting the standards and required performance levels, take action. By pruning, you get rid of the deadwood and help the good wood grow. It is a necessary action for developing a winning organization.

The dreaded “I-Do-It-All” Syndrome. Afraid to delegate? Scared stiff to give your employees responsibilities? Do you really think you’re the only one who can get it done correctly? It is time to check yourself in for a psyche test!

It’s not uncommon for business owners to ‘waste’ numerous hours doing the work that they hired employees to do for them. Ever wonder why? Usually it is because you failed because of the following:

·         Failed to have a workable system in place.

·         Failed to properly train the employee to the system.

·         Failed to properly communicate with the employee.

            You see. It is not always the employee. What you have is an organization problem of major proportions … YOU!

            You need to learn the art of “Leverage and Linkage,” that is the effective process of written systems, standard operating procedures, and employee training.

           

Failure to sharpen your own saw! Knowing you should be doing better, but failing to get the help and guidance to correct it, will never make it get better. You’ll still be dealing with all the stress, chaos, and frustrations of your business.

Improving yourself and your business is a constant and never-ending process. The sooner you come to terms with this fact of reality, the sooner you can start solving a lot of your major business headaches.

Perfection is something that is unattainable. It is the pursuit of perfection that produces winning advantages.

How to Avoid the I.R.S. Crippling Your Business

Business winds down, payments slow up and cash flow barely exists. To compensate, you delay paying Uncle Sam.

Before you know, the IRS is knocking on your door, assessing fines, fees and interest. You know you owe. You’ve checked that, but what do you do when you haven’t got the money?

Don’t panic! The IRS isn’t going to send a SWAT Team to kick down your door and drag you away. However, this also doesn’t mean you should ignore them. If you know what you will owe them before you file, go ahead and file your return as soon as possible. If you fail to file, it adds a 5% per month non-filing fee that increases by 5% up to 25% for each additional month you don’t file.

The IRS will accept a written request for extended payment time, up to 45 days, if you request it in writing. However, this is a temporary window, and you need to come up with a strategy, payment or something.

Let's talk about that. 

I am not a proponent of trying to deal with the IRS by yourself. I recommend having a CPA or tax attorney do it for you. The reason is simply. Go to a casino and the odds are always in the best interest of the house. The same applies here.

With that thought in mind, I suggest a CPA, Tax Attorney or a qualified tax resolution official. They have the expertise and knowledge to negotiate you a better deal than you can yourself, and possibly get a reduction in the amount you owe.

The important thing is to take action coupled with a strategy and professional help.

The Common Traits of Successful People

Have you ever wondered what it really takes to be successful?

Most people have a false belief of what success really is, and how you attain it.

Some think it is the price tag of the car you drive, the size of the house you live in, the family you were born into, the school you attended, or just the mere perception you may have more than them.

However, when you take a true look inside what success is, you see a different set of values.

Successful people see things differently for one thing. One may see a problem and develop a solution to fix the problem, where others are just fixated on the problem, or blame others.

Successful people may see a run-down part of town where hopelessness, poverty, crime and despair reign, and find a way to build it up so it can prosper. Others are content to wallow in their meager existence.

Successful people have their eyes constantly scanning for opportunities, while others are focusing only on mediocrity.

Successful people sharpen their skills with passion in order to do their best in their endeavors, while others passionately find excuses for doing nothing.

Successful people consistently view the future in the present tense, while others always look back in the past.

Successful people don’t wait for success to come to them, instead they relentlessly chase after it. Most people quit too early and never give success a chance to develop.

Another trait that is prevalent among successful people is courage. They nurture the courage to keep up the effort, the courage to be creative,  the courage to go against the group, the courage to get moving, and the courage to go it alone.

You see. The successful realize it isn’t all about the money, the cars, the homes, jewelry and other trappings. It’s about accomplishing something of value with their lives. It’s about achieving something that is worthy of their efforts. It’s about the courage, skills, self-reliance, personal responsibility, and self-worth to do it.

Successful people realize what the real value is of creating advantage and opportunity.