One big concern coming out of the COVID-19 pandemic is the sheer number of people in the United States who have no sick leave. If they contract the virus, many of them worry they would have to choose between staying home sick and paying the bills. The federal government recently passed legislation to provide some assistance to people working for certain kinds of businesses. But since paid leave by the federal government is a new concept, there are a lot of details you need to know. Here’s how the new law could affect your contracting business.

What Are the Basics of the New Paid Leave Law?
The fact that the federal government has never mandated paid leave before creates a lot of questions. Prior to this point, the closest available has been unpaid leave based on the Family and Medical Leave Act of 1993. There may be adaptations or updates to the new paid leave law over the course of the COVID-19 crisis, but here are the basics:

• Employees of qualified businesses with fewer than 500 workers may be eligible.
• Workers who must stay home due to a coronavirus-related sickness or mandated shutdown may be able to get up to 80 hours of paid leave.
• The amount is based on their regular income and the reason for leave, e.g. sickness or need to care for another family member.
• Employers are expected to pay for the leave and then request tax credits.
• The law applies to leave taken after April 1st, 2020 and by December 31st, 2020.

There are some exceptions, so it’s important to check on your eligibility and consult with an accountant, as needed.

How Does This Law Relate to FMLA?
FMLA has been around for 27 years, and the new paid leave laws are being administered as a part of it. For decades, FMLA has provided up to 12 weeks of unpaid leave for qualified employees without worry that they will lose their jobs. Traditionally, they’ve needed to work in the job for about a year to qualify. The new leave law makes a few changes tied specifically to the COVID-19 pandemic:

• The law expands eligibility to employees who have worked with a company for 30 days.
• It requires qualified employers to paid for up to two weeks paid leave for virus-related healthcare needs and closures.
• Employers may also be required to pay up to 10 weeks paid leave for parents who can’t work due to school and childcare center closures.

Many of the ways that employers can administer these policies are tied to FMLA. Companies that already have leave policies under this guideline, such as requiring employees to use all their accrued sick pay or vacation time first, may be able to apply them to this law.

How Does This Law Relate to Contractors?
This rule, and the tax credits, apply to most companies with fewer than 500 employees. This means that even if you have only a few employees, you probably are not exempt from these requirements. Many contractors may be surprised to learn that there are provisions for self-employed workers. This means that if you are out of work due to COVID-19, you might be able to claim the credits on your 2020 taxes or adjust your contributions to your quarterly estimated tax payments.

Where Can Contractors Get More Information?
Given that the requirements come right now and tax credits usually come later, it’s not surprising that people are confused and have a lot of questions. The IRS maintains a section on its website with frequently asked questions about the policy. Contractors can also check the U.S. Department of Labor’s website for updates to the policy and clarifications.

Keeping a business going during COVID-19 is a struggle. The paid leave laws may help, but contractors need to pay close attention to the details. For more information about starting your own contracting business, visit CSLS today!

The longer you develop your business, the more opportunities you have to build relationships with business partners. Your contractors, subcontractors, supply chain and other companies help to keep you running smoothly. When you do it right, it’s a win-win for everyone involved. The trick is that you have to maintain the relationship so that it’s always there when you need it. Here’s a few ways to make it a priority.

Get on a First-Name Basis
You hear a lot about business success not being so much what you know, as who you know. In a competitive industry with a lot of small contracting businesses, this is certainly true. The better someone knows you and your work, the more likely they are to call you first when they need something. This is where all those networking skills come in handy. Whether you’re a B2B or a B2C, selling your services is paramount. You need to make sure that people with the right connection in the industry not just know your name, but can remember it. You can do this by communicating with them on a regular basis and remembering who they are, as well.

Keep Tabs on Your Contractors and Subcontractors
Businesses change names or switch owners all the time. Your job is to know who you need to talk to and how best to reach them. Once you get this information, write it down in a place where your employees can get easy access to it. At least once every six months, follow up with your most important business partners and confirm that your contact information is correct. The last thing you want to do is end up with a dead phone number or an email address that now goes into a black hole, right when you need it most.

Give as Much as You Take
Everyone has a friend who only comes around when they want something. Not surprisingly, there are plenty of businesses that run on the same premise. If you’re always asking for favors and not offering something in exchange, you may find that businesses are less interested in maintaining the relationship. Instead, make sure that you reciprocate on a regular basis. If you’re at the point where you might consider someone a colleague or a friend, get together for lunch or coffee on occasion. This little effort can remind someone that you’re a valuable part of their own business success.

Keep Your Promises
A lot of making sure you have a smooth workflow involves keeping up with your business partners, but there’s another step. You need to be a person they want to continue working with. When you first get started, it is really tempting to overpromise as a way to secure a bid or contract. The trouble is that if you underdeliver, you’ve given a cast-iron reason not to work with you again. Sure, completing a project late and over budget is practically part of the job description, but that doesn’t mean people will be happy about it. Set realistic goals you know you can achieve, and let your reliability secure your reputation.

Build Redundancy Into the System
In a field like construction, turnover is as predictable as the Santa Ana winds. The difficulty with cultivating long-term relationships with your subcontractors or supply chain is that you’ll develop relationships that break from time to time. This is where you want to build some redundancy into the system. If you have an employee who always talks to a particular company, make it a point to call them yourself on occasion. This helps them remain familiar with you, as you are with them. It makes for a more seamless transition, when one of your employees needs to move on.

Running a successful contracting business requires help from other businesses. To get their regular assistance, you need to develop a relationship that you can maintain for years to come. To learn how you can become your own boss in construction, contact CSLS today!

As a contractor, you know that prices for materials fluctuate regularly. Most of the time, you can anticipate what’s likely to happen and plan ahead. At other times, you get hit with a surprise new tariff that dramatically increases costs. When you’re bidding on projects that won’t be completed for a year or two (or longer), it’s hard to predict now what you’ll pay for the things you need. Here are a few ways you can manage it without losing your profit margins.

Keep an Eye on Rising Prices
Prices don’t always go up with inflation. Sometimes they go down. On occasion, they’ll fluctuate, especially if there is some event like a disaster that forces everyone in the supply chain to accommodate. Sometimes, price increases mean that certain businesses will struggle to keep up. If you want to avoid being one of them, you should keep tabs on the news and regional prices for all materials you use regularly. Update your estimates as prices change so you don’t accidentally use last year’s numbers.

Round Up, Not Down
A good rule of thumb for many construction materials is to estimate how much you’ll need and add an extra 10 percent. You might want to do something similar for material prices, as well. You can’t predict when the federal government will institute a tariff that increases the cost of materials you bring overseas by a margin as large as 25 percent. But you can guess that prices will go up year after year. Look at price averages in your region and how they’ve changed over the past five years. Use that data to inform your estimates, and always round up. Underbidding on materials may make your bid more appealing to clients looking for a bargain. But you’ll pay for it with less money to keep your business going.

Consider an Escalation Clause
Once you sign a contract, generally you’re committed to doing the work at the price you specified. An escalation clause gives you a way to renegotiate the contract based on price increases. The terms are usually very specific, which means that you’ll have limits on the time you can raise prices, how much you can increase them, and how soon you can get payment for the difference. If you can’t reasonably predict what materials will cost you for the project, the clause may make the difference between safeguarding your profits and shaving them off entirely.

Evaluate the Best Terms
In an industry with fluctuating material prices, using escalation clauses can be a way for contractors to avoid cutting into their profits when prices go up. It’s important to choose the right one based on the project. For example, you might opt to share the risk up to a certain point. If the project is relatively short and you don’t anticipate rapid changes, you can offer to shoulder the increase unless it passes a certain percentage.

During longer projects, it may make more sense to activate an escalation clause past a certain amount of time. That helps to accommodate price changes that happen months or years later. Some escalation clauses allow you to raise the price the day it changes. If you want or need this level of flexibility, expect to show your work in your original price estimate.

Keeping a contracting business above water involves careful attention to the prices of materials you use. By tracking material costs and adding escalation clauses to certain contracts, you can protect your income and profits. To discover more benefits of running your own business, contact CSLS today!

Several states, California included, have shut down what they call “non-essential services” until they can get better control over the rising cases of COVID-19. Although construction is currently proceeding mostly as usual, this may not be the case next week. Dealing with a state-level or city-level shutdown presents a number of possible complications for your business. Here are five things you can do to help keep your business going, if you’re forced to cut hours or shut down for a short period of time.

Assess Status of Current Projects
It is common for contracting businesses to have several jobs going. You might be almost done with one and barely starting with another. The first thing you should do is assess where you are at with every current project. In some cases, you may be able to suspend work for a short period of time or change the nature of the project while you wait for a shutdown to end. In other cases, you might simply need to finish some paperwork, which could be easy to do remotely. There’s a high likelihood that you would have to suspend most work during a shutdown. But there may be other ways to run your business in the meantime.

Check on Your Cash Flow
One of the first rules of running a contracting business is to ensure that your cash flow is sufficient to handle temporary delays in revenue. While a shutdown due to COVID-19 might be longer than temporary, it’s possible that your cash flow may still be able to buy you some time. Invest the time to examine all of your expenses, including:

• Payroll
• Workspace rentals
• Equipment
• Supplies

If you made active orders for projects that are now on hold, you may be able to pause or cancel them until you are ready to make those orders again. Finding ways to limit what you have to pay can help ensure that you save most of your money for important things like keeping your employees on-staff.

Consider Financial Support
While the last thing that you may want to do right now is take out a loan when you’re not bringing money in, there are a variety of ways you can look at getting extra financial support while you wait for the opportunity to open business again. This might come in the form of

• Low-interest business loans
• Lines of credit
• Grant programs

Take a look at federal legislation related to economic stimulus and see how the benefits for businesses may relate to yours in particular. It’s an imperfect solution, but it may help you keep the lights on.

Communicate with Clients and Lenders
In any kind of crisis, most business owners try to plan for the worst but hope for the best. This involves making sure that everybody who relates to your cash flow, from clients to lenders, is aware of what you are dealing with and how you were working to minimize problems. It might mean trying to negotiate a new timeline with a client rather than having to abandon a project altogether. It might also include talking to lenders and creditors and requesting some kind of forbearance that allows you extra time to catch up on payments while your income is lower. In most cases, you are much more likely to reach a satisfactory agreement if you talk to them before you fall into violation of the contract.

Get Updates on Limitations
While some experts are estimating that the threat posed by COVID-19 may last for months or even years, it is unlikely to lead to a long-term shutdown of the construction industry. That said, it is hard to tell when barriers to normal business function will lift. You should plan to spend some time every day looking for news as it relates to your field. This will give you the best opportunity to find out when you’ll be able to start working again.

Running a business in the middle of chaos can lead to a shutdown. With these tips, you’ll know what to do to keep your company as safe as possible. For more information about preparing for your contractor licensing exam from home, contact CSLS today!

If COVID-19 has shown anything, it’s that the U.S. is quite unprepared to deal with a large number of sick people. Other countries have dealt with it by addressing faults in their infrastructure, like an insufficient number of hospital beds. And while the healthcare industry is in more need than ever now, these kinds of problems mean that construction contractors have a role to play, as well. Across the state, construction workers are getting ready to help. Here’s what is going on and how you can be a part of the solution.

Stay Updated on Current Guidelines
It may feel impossible to stay updated on the current status of rules concerning businesses in California right now. That said, you should still do everything you can to keep informed. At present, the state still classifies construction as an essential industry. This means that contracting businesses can continue to work on construction projects as long as they maintain proper attention to social distancing and sanitation practices. This may change at any time, so you will want to keep the latest information at your fingertips.

See What’s Happening in Your Area
Right now, the focus is on both containing the spread of COVID-19 and providing additional resources to the healthcare industry to treat people with the virus. Just like China was able to build a new hospital within a very short period of time, the state of California is mobilizing construction workers to expand and retrofit hospitals. This will make it easier for healthcare professionals to identify, diagnose and treat people who may have the virus. If you want more information about what you may be able to do, read local newspapers and social media posts from government officials. This may be the fastest way to get updates.

Get Ready for Action
Watching people come together from a large variety of industries to help produce personal protective equipment and ventilators is an inspiring sight. It is amazing what the population can do if they are only given a chance to use their skills and the resources that they already have. If you are already working on existing projects, it is probably best for you to continue meeting your obligations. But if your well of work seems to be running dry, looking for ways you can help may be able to make a big difference. This is a great time to network with other professionals in your area and see if you can team up to assist, even in small ways.

Take Advantage of Business Support Programs
While the focus is on businesses that are able to donate labor or supplies to battling COVID-19, many industries are also seeing significant cutbacks to their revenue streams. If you were worried about what the virus spread might do to your ability to keep your business running, one of the best things that you can do is start investigating the many local, state and federal programs recently implemented to help keep small businesses afloat. An interest-free loan or a grant may give you the ability to keep paying your bills while you protect your workers and help your community.

If All Else Fails, Minimize Harm
At the end of the day, every person has a responsibility to try to help contain the spread of COVID-19. A novel virus may cause significant damage, and it won’t be apparent how much until the vast majority of the threat has already passed. If you are unable to participate in assistance efforts related to COVID-19, your best bet may be simply to avoid increasing the risk for yourself and your employees. Focusing on what you can do to flatten the curve of rising cases and fatalities is a good effort all by itself.

The spread of COVID-19 has brought out the best in millions of people. If you want to be one of them, your contracting business may be able to help. To learn more about what the construction industry means to your local community, visit CSLS today!

You may already know that automation is shaving months or years off construction projects. As technological innovations improve, the degree of accuracy in various tools allows contracting businesses to consider how they can use automation to get their work done faster. Here are a few reasons automation deserves an important role in your design phase, and how you can best take advantage of it.

Why It’s Time to Automate
Whether you’ve been working in the industry for years or you’re just starting out, there are plenty of reasons to rethink the way you do things. The construction labor shortage exploded by the housing crisis and was made worse by increasing numbers of construction professionals heading into retirement. It’s getting better but it’s still a big problem in a lot of fields. Automation isn’t just gaining popularity–it’s improving in accuracy. This means that you can automate processes that will do the work nearly as well or, in some cases, better than you could do with a skilled worker.

Tips to Incorporate Automation Into Your Workflow
When you aren’t sure what is out there, it’s hard to imagine how automation could possibly make your work faster and more effective. That’s where a little research comes in. You wouldn’t think of hand-writing an invoice that you could easily input into a tool, because this technology has been around for decades. Here’s how you can find ways to make automation a seamless part of your workflow:

1. Identify where your projects are falling behind schedule (or over budget).
2. Research the best solutions to your current issues.
3. Don’t jump at the first option you find, because there may be better ones on the horizon.
4. Take opportunities to test out products before you buy.
5. Read reviews of tools and software systems, to get a sense for their success rates.
6. Test it out on low-impact projects before you automate full-time.
7. Offer employees training in the latest methods.

Give yourself the time to adjust, and you might be surprised how quickly it changes your perspective.

Fields Where Automation Is Taking Off
Even 10 years ago, automation wasn’t a big deal in many areas in construction. With changes happening every year, you’ll find more and more businesses adapting technology to make projects go faster. Automation is currently driving:

• increases in the use and efficacy of modular construction
• availability of self-driving construction equipment
• innovations in drone technology, which allows workers to perform complex tasks from a distance

Right now, a lot of the technology is proprietary. This means that one company’s approach might be completely different from another’s. Within the next few years, you’ll see the best performers rising to the top and spreading to other fields.

Keep Watching for News
Although automation is picking up speed in all kinds of fields, it’s also changing rapidly. This means that if you there aren’t many options in your specialty, or if most of the choices you have are pretty sketchy, just wait six months or a year. You can probably remember a time when drones were terrifying at worst and vaguely helpful at best. They’re now shifting from surveying the scene to interacting with it. Imagine how much better tools and systems will be in five years.

Make Workers a Priority
Although automation is often feared as the killer of jobs, it doesn’t have to be. In a world where there’s years more work available than qualified people to do it, efficiency is king. Automation isn’t going to force or even allow you to get rid of your whole staff in a year. Instead, it will make you and your employees’ jobs easier. That means you can take on more projects and satisfy more clients with reliable deadlines and a shorter turnaround.

Construction automation is becoming an integral part of the industry, and you should consider how it will affect your contracting business. To discover more about the latest tools and technology used by licensed contractors, contact CSLS today!

Sometimes you read about a massive construction project with an estimated budget that just keeps going up. You might wonder how governments, even state or national ones, can keep dedicating billions more. For your business, ensuring that your projects have sufficient funding to keep going is a matter of survival. Here are a few things you can do if you find yourself in a situation where your project is running over budget or lacks enough funding to finish.

Determine Your Obligations
The first thing that you should do is figure out what your obligations are to the project and to the client. This is where an investment into refining contract language that protects you becomes very important. It applies whether you are working directly with the property owner or as a subcontractor. Carefully review the contract that you have signed, and consider hiring a lawyer to help you review it if necessary. This will help you to know what you are required to do, and which actions could possibly put you in trouble.

Look at Additional Funding Options
The most obvious solution is to look for additional funding options. For a reliable property owner with good credit, it may be as simple as applying for additional financing. In some cases, like a lost grant, it may be much more difficult. The right option depends heavily on the type of project and its scope. But if you can find a way forward with this option, you may be able to avoid a lot of stress and conflict in renegotiating or canceling the contract.

Consider Revising the Project
If it’s not possible to get more money, then you may need to renegotiate the contract to limit the scope of the project. Whether or not you can do this depends on the contract and who is responsible for the funding shortfall. For example, if you are working with a client who was only able to secure partial funding for the project, then your personal responsibilities may be lower. On the other hand, if budget overrun came as a result of a fault in your original estimate, you might be on the hook to cover at least part of it. In any case, attempting a reasonable renegotiation of the project may allow both parties to reach a satisfactory conclusion under the new circumstances.

Minimize Additional Investment
The last thing that you want to do is keep investing into a project that is failing fast. How you approach that feeling depends on the contract. If you get to the point where you may need to cut your losses, it’s probably best to consult a lawyer to make sure that this is the wisest course of action. Otherwise, this is an important reason to vet clients and projects for funding or ability to pay. It’s also a vital advantage of regular communication between property owners and contractors, or general contractors and subcontractors. Knowing where you are at on any given day can help you determine where to go next.

Evaluate Solutions for Future Projects
Once you get to the other side of a situation like this, one of the last things that you may want to do is spend a lot of time figuring out how to avoid it. As tempting as it can be to take a break and minimize how much time you have to think about it, it’s better to debrief and make improvements while everything is still fresh. Make notes of miscommunications or errors in calculation that led to the shortfall or overrun. This will help you to implement better practices in the future to cut down on the chances that this will happen again.

Budget overrun in construction is so common it might be part of the job description. But if you want to avoid it cutting into your profits, you’ll work to minimize it in your projects. For more advice on running a successful contracting business, contact CSLS today!

With design-build fast becoming the industry standard, many contracting business owners rejoice. This approach to building puts more decision-making power into your hands, with the ability to influence the design based on your unique skills and experience. The trick is, not every contracting business has a designer. If you don’t, there are several aspects of the design process that you may not know. Here are a few factors to consider and tools you can use to help you determine what you need.

Why Is Design-Build a Popular Approach to Construction?
To know why design-build is taking over the construction industry as the preferred approach for both private and public works projects, you need to understand design-bid-build (DBB). DBB treated the design and construction processes as two completely separate elements of building, with different professionals working to achieve each one. DBB involved a professional, usually an architect, to create a design. Then the property owner would solicit bids from contractors who would build according to the design. Many experts believe this approach is much less efficient and often leads to problems, since the people on the hook for doing the work aren’t involved at all in the design stages.

By comparison, design-build makes the contractors in charge of construction an integral part of the design process. As is often the case, design-build became more popular for private projects well in advance of government projects. But even large organizations are starting to see the benefits of bringing the contractors they intend to hire on board from the beginning. It cuts costs and often takes much less time to completion.

Why Is It Important to Have a Professional Design Construction Projects?
For someone just breaking into construction and hoping to build their own business, the major hitch about design-build is the need to have a qualified professional at the helm. This is partly why DBB worked for as long as it has. The property owner or the organization requiring the project could hire someone with sufficient training and certification, like an architect, designer or engineer, to create a plan that meets building codes and achieves design goals. For the sake of safety and durability, sometimes there is no way around it.

How Can Contracting Businesses Make Design More Efficient?
The thing about design is that while custom is often ideal, it may not always be necessary. Contractors come into a space, take relevant measurements and requirements, and produce a design to fit owner specifications. But this may lead people into reinventing the wheel over and over again. Innovations like generative design seek to improve the design process. Instead of creating something entirely new from scratch every time, people may be able to search through designs that meet certain limits and refine them to suit their needs. This cuts down on time spent constructing the design and helps ensure a better long-term result.

When Should Contracting Businesses Partner with Designers?
If you research established design-build contractors, you’ll usually find that they have a certified interior designer on staff. This person may conduct many of the initial design consultations with property owners and produce a design that the rest of the team can carry out. They may also work with a licensed architect. For many types of building projects, this kind of care is frequently a requirement. For others, like surface-level renovations that do not change the structural layout, it might be more of a good suggestion. In either case, it’s probably wise to network with designers in your area, especially as you get started.

Design-build can be a great way to bring most of your construction project tasks in-house, as long as you can handle the design requirements. To find out more about building your contracting career, contact us at CSLS today!