Highlights from the Summer Management Conference

By: Jim Moody, CAE

CSA President

We’ve just returned from our Summer Management Conference in the north Georgia mountains. Though our crowd was smaller than in the past couple of years, those who attended seemed to find it a meaningful experience.

One of the things that I love about CSA is the focus on family. Many of the members are family-owned companies, and CSA has always welcomed spouses and children to the Summer Management Conference. It’s not unusual for fathers to bring their sons or daughters who will eventually take over the business to our roundtable meetings. This family orientation says a lot about the character of the organization. Frankly, it’s one of the reasons I took the job almost three years ago.

It was heart-warming to see families out on the lake kayaking, jet-skiing or just tooling around on a boat. Some folks went horseback riding while others hiked up mountain trails to waterfalls. We also had a large group venture down the Ocoee River for a really fun whitewater experience (fun unless you were in the boat that flipped over, but that’s another story).

While we had substantial educational opportunities at the meeting, I’m not apologetic for planning a meeting that includes ample opportunity for fun. You work hard day in and day out. It’s a stressful business, and that’s never been more true than today. I believe creating opportunities for you to let off steam, enjoy time with family, and enjoy bonding with colleagues is a critical part of the management conference. As we choose places to meet, we do it with an eye towards the activities in the area.

Of course, we also look at the pricing. We chose a smaller, lesser known property this year because of the value it provided. It was quaint and rustic yet nice all at the same time. The food was excellent and again provided good value. As it turned out, to the surprise of some, it was a perfect place for us.

Next year we’ll again be at a more typical resort. The economy has hurt hotels in the same way it has hurt our industry, and hotels that were once out of our range have become possibilities. We’ll be at Marriott Bay Point Resort in Panama City Beach. This is, I believe, the nicest hotel in the Panama City area. It’s set up for conventions like ours and for families. There are ample on-site restaurants (including one on the water with a very nice sunset view) and the pools are what you’d expect from a top-tier resort. There’s great golf and a very nice spa. Water sports (kayaks, jet skis, etc.) are available for rental, and the bay makes for a very nice water playground.

One of the drawbacks of this property for many years was the fact that it was on the bay and not the gulf. While there is a small sandy beach, it’s not the same as being right on the gulf. The hotel has solved this problem with the acquisition of a boat that ferries hotel guests a mile or so across the bay to Shell Island. This island is part of the St. Andrews State Park, so there is no development there. It’s pristine beach, and because there’s no bridge, it has a private island feel to it.

We considered Sandestin for this meeting, but the part of Sandestin we could afford was not the nice new part. From where we would have been, you’d still have to drive or ride a shuttle over to the beach, and their beach is often six or seven rows deep with chairs. If you aren’t in the first row, your beach experience isn’t that great.

So, Marriott Bay Point it is. We’ll be there soon after the 4th of July (Thursday, July 8-Saturday, July 10), and you can tie in a full-fledged beach vacation if you’d like. Our rate is a bargain at $178/night. That rate is extended to July 3 - July 13. Mark your calendar now. For reservations, click here.

Meanwhile, the Education Committee is seeking ideas for next year’s speakers. If you have an idea of someone you’d like to hear, please let me know so I can pass it along. Recommendations are desired from everyone – not just attendees of this year’s meeting.

For those of you who did attend this year, thanks so much for supporting CSA. I don’t take lightly that you gave your time and money to the association, and there are many competing interests for both of those. I trust that you feel that the return you received on your investment was adequate. If not, please let me know.

You can see a full set of photos from the event here.

Where’s the Money From? Simple Question to Saves Lien Rights on Credit Accounts

By: Jared W. Heald, Esq.
Hendrick, Phillips, Salzman & Flatt, PC,
Atlanta, Georgia

In the current economic recession, materials suppliers are continually having to write-off bad debt as their credit-account customers continue to default on making payments for materials, file for bankruptcy, or simply close the doors.

When faced with such a situation, those suppliers who have protected their lien rights can take solace in the fact that while their customers may be going out of business, the supplier can look to the owner of the real property into which their goods and materials were incorporated for payment. However, a little-known nuisance in Georgia law may operate to erase suppliers’ lien rights without their knowledge.

As a prerequisite to preserving lien rights, Georgia law requires suppliers, who provide goods to a customer on more than one job pursuant to a credit-account, to make a reasonable effort to ascertain the source from which their customers received the funds being paid to the supplier so that the supplier is able to properly allocate the payment. Georgia law requires the supplier to ask its customer where the money being used to make payment on the credit account originates. In the absence of an inquiry, a supplier runs the risk of waiving its lien rights.

Georgia law does not permit a material supplier to blindly allocate a customer’s payment to the delivery of choice, which understandably is often the oldest delivery still on the books, even if the customer consents to the allocation. The following example will demonstrate this rule of law in action and explain why the inquiry is crucial.

Supplier is in the business of selling masonry products on credit to approved customers. Masonry Contractor is one such credit-account customer of Supplier. Masonry Supplier is awarded a contract on two projects, Y and Z. Supplier provides $20,000.00 in goods to Masonry Contractor at Project Y on August 15th. Supplier provides $30,000.00 in goods to Masonry Contractor at Project Z on September 15th. Supplier tracked the provision of supplies to the two projects using separate account ledgers.

On November 1st, Masonry Contractor makes payment to Supplier in the amount of $20,000.00. Supplier, unaware of its duty to make an inquiry regarding the origins of the monies being paid to it by Masonry Contractor, applies the payment to Project Y for two reasons: first, the payment received from Masonry Contractor matches the dollar amount of goods sold to Project Y; and, second, Project Y’s account was the oldest outstanding delivery to Masonry Contractor. Unfortunately, shortly thereafter, Masonry Contractor does not make further payment to Supplier and is rumored to be going out of business

On December 1st, Supplier files a claim of lien on Project Z for the $30,000.00 of goods supplied to Masonry Contractor for use on Project Z. Upon receipt of a copy of Supplier’s claim of lien, the Owner of Project Z challenges the validity of Supplier’s claim of lien. Owner Z argues that Supplier was paid $20,000.00 for materials supplied to Project Z making Supplier entitled to a $10,000.00 claim of lien on Project Z only. Owner Z can prove its position because Owner Z has banking records from Masonry Contractor and itself showing that the November 1st payment to Supplier was made out of funds received from Owner Z. Under Georgia law, Owner Z wins and Supplier is only entitled to a claim of lien against Project Z in the amount of $10,000.00.

The end result is that Supplier has been fully paid for the $30,000.00 worth of materials supplied to Masonry Contractor for Project Z, but has not received any payment for the $20,000.00 worth of materials supplied to Masonry Contractor for Project Y.

As all suppliers who have had the unfortunate mistake of being involved in litigation realize, the Court’s finding in favor of Owner Z against Supplier does not occur until many months after Supplier has provided materials to either of the projects in our example meaning Supplier cannot place a claim of lien on Project Y to try and secure payment for the materials provided to Masonry Contractor at Project Y. Had Supplier asked Masonry Supplier, “Where’s the money from?” this unfortunate consequence could have been avoided.

While this is illustrative example of this Georgia rule of law is simplistic, it helps explain the real pitfall faced by suppliers who fail to make the proper inquiry – the loss of lien rights through expiration of time because of an erroneous belief of payment on the project. Obviously, in the common business practice, where a supplier provides goods to a customer at dozens of projects at the same time, the realities of tracking payments received on a customer’s credit account back to the appropriate project is much more difficult and time consuming on an accounting department or accounts receivable manager. However, if a supplier wishes to have the ability to counter this unique defense available to an owner to defeat a supplier’s claim of lien, the supplier must have made the appropriate inquiry.

NLBMDA News - Obama Administration Considering Using TARP Funds to Assist Small Businesses

It was reported over the weekend that the Obama administration is working on an initiative to use money from the $700 billion Troubled Assets Relief Program (TARP) bailout fund to assist small businesses, which the administration believes are the key to an economic recovery. "Small business" is defined by the federal government as companies with 500 or fewer employees. Read more.

NLBMDA News - Card Check Negotiations Given New Life By Franken's Arrival

Sen. Al Franken (D-MN) was finally sworn in to the U.S. Senate on July 9, giving the Democrats the 60-vote block they need to override procedural hurtles on controversial legislation such as the so-called "Employee Free Choice Act" (H.R.1409/S.560). While several key Democrats continue to hold firm in opposition to the card check legislation as currently written, Sen. Tom Harkin (D-IA) continues to press for support of a "compromise" that will garner enough votes to bring the legislation to the Senate floor before the end of the month. Dealers who are concerned about legislation that undermines the employee-employer bargaining relationship should visit www.BuildtheVote.org to remind your Senators to hold firm in opposition to card check legislation in any form. Source.

NLBMDA News - Health Care Reform May Be Funded by Tax Hikes

As Democratic leaders in the House and Senate struggle to identify methods to pay for the estimated $1 trillion price tag of health care overhaul that includes a public plan, House Democrats are reported to be leaning towards raising taxes on individuals who earn more than $280,000 and couples earning more than $350,000. Of course, these tax hikes would also impact small businesses paying on the individual rate schedule. It is estimated this would cover half the cost of the legislation, while the remainder would be covered by lower Medicare spending. Read more.

NLBMDA News - Energy/Climate Change Legislation Gets Chilly Reception in the Senate

Following the closer than anticipated vote in the House of Representatives on energy legislation in June, Senate committee chairs have backed off of earlier assertions that a bill could be passed out of that chamber prior to the August recess. Read more.

NLBMDA News - DHS to Increase I-9 Compliance Efforts; Senate Seeks to Preserve "No Match" Rule

Recently, the Immigration and Customs Enforcement (ICE) agency announced that it was increasing its I-9 compliance enforcement efforts. The I-9 form is the eligibility-for-employment form that requires verification of certain documents. At the same time, Homeland Security Secretary Janet Napolitano announced that the agency would rescind the controversial Social Security No-Match Rule, which had been blocked by a court order. Read more.

Zandi: Recession Will End This Year

Moody's economist also says housing will not be 'an early source of growth' in this recovery.

Source: BUILDER OnlinePublication date: July 13, 2009
By Alison Rice

First, the good news. Mark Zandi, chief economist for Moody's Economy.com, believes the Great Recession will end this year.

If that's true, that will surely be welcomed by just about everyone. During this difficult economic period, more than 8 million jobs have been lost. Housing starts have dropped to an annualized level of 500,000 units, down from more than 2 million in 2005. Banks large and small have failed. Read more.

About Passports

This article comes from the Ohio Construction Supplier's Association.

Are you planning a trip to Canada, Mexico or the Caribbean? As of June 1, American citizens entering or returning to the United States by air, land, and sea are required to produce standardized documents. A passport already is required for all international air travel to and from the United States.

The new law means Americans must have one of the designated documents: a passport, passport card or a “trusted traveler” document such as the Nexus card. There are exemptions for children under 16: They need just a birth certificate (an original or copy). Teenagers 16 through 18 traveling in organized groups – such as school or sports teams – also need only birth certificates.

What will happen if someone arrives at a U.S. border crossing without a passport or one of the new alternative IDs? The U.S. Customs and Border Protection indicate that entry would not be denied, although a lengthy delay might be in order while citizenship is verified.

Getting your passport is easy but requires some advanced planning. To ensure you receive your passport in time, be sure to send in your documents at least six weeks prior to your departure date. Full details on attaining or renewing your passport can be found at here. You may also apply for a passport at your local United States Postal Service Office.

Sales techniques you may have forgotten – or never learned

By: Jim Moody, CAE
CSA President

CSA held a sales seminar last week, with Tim Shaver as the speaker. Tim is out of Nashville. We came to know him through our friends at Stewart Lumber in the Nashville area. Stewart is a member of one of our roundtables, and they’ve used Tim as a consultant for several years. Tim’s also worked with several other lumber dealers, and he has a pretty good idea of what life is like in our trenches.

Here are some nuggets I gleaned from his presentation. Some of this may be old hat to you, but I found much of what he presented to be innovative and different than what I’ve heard from others.

· Many sales people are simply peddlers (where there’s high pressure and low price) or at best vendors (order takers). That may have worked in 2005, but no one can make a living in sales today waiting for the phone to ring with orders or simply dropping the price to get a customer while wiping out the margin.
· As a sales person, you want to be a trusted advisor with complete knowledge of the business. You understand the customer’s needs, perhaps even before he does, and you solve them (and let him know you’ve solved them). You want the customer to believe he can’t conduct his business as well without you. In this environment, price is not so important. It requires a high skill level to be a trusted advisor. Not only do you need expertise in your field, you also need the ability to build strong relationships.
· It’s easy to be a trusted advisor when you are the only source of information. Unfortunately, that’s rarely the case in today’s environment. The internet and competitors ooze with information, so the relationship has to be based on your ability to use the information that everyone has in a way that’s more useful to the customer. Everyone has knowledge; you have to translate it into wisdom.
· Some customers will never see sales people as anything other than peddlers because of their perception of our industry. When you realize that’s the case, think carefully about how much time you want to spend on that customer. Does it make sense to do lots of take-offs for him when he’s just going to use that to get quotes from your competitors and drive the price down below your cost? Many times, sales people spend the most time on customers that contribute little or nothing to the bottom line. Focus more time on customers who have the ability to see you as more than a peddler.
· Far too many sales people get into the business thinking they will get a handful of accounts and then spend their time as an account manager rather than a sales person… because they hate to sell. If you are hiring a sales person, even if they are the No. 1 seller at your competitor, make sure you aren’t hiring someone who’s only been an account manager. Is the reason they are leaving their current position because the gravy train is over and they’ve forgotten how to sell?
· Sales people often dislike systems because they create work and accountability. Yet research shows time and time again that following a system works better than flying by the seat of your pants.
· Old systems (when they are followed) typically involved qualifying a lead, presenting a quote, closing the sale and following up. But this system allows prospective customers to push sales people off with “I’m just looking,” or to take your information without any interest in buying from you. It’s also prone to the “I’ll get back to you” or “Let me think it over” problem.
· A better system involves creating bonding or rapport, being honest with the prospect (“We may be a little higher, but we provide some things that our competitors can’t, and we can’t do that for free. In the end, because of the knowledge and service we provide, you’ll come out better.”). You figure out where he’s feeling pain and offer solutions. Seek out the people who are in some pain (as long as the pain isn’t the inability to pay bills, of course) because they are worth a lot of your time. Solve someone’s pain, and they will be indebted to you. You may have to help them figure out what that pain is by asking lots of questions. You may even have to plant the seed in their mind that they are in pain (a lobster doesn’t realize the water’s getting dangerously hot until it’s too late). When that happens, price becomes a non-issue.
· Never ask “who’s the decision maker.” No one ever wants to admit that they are not the decision maker, so they will almost always tell you they are the decision maker even if they aren’t. Just human nature. Instead, a better question is “Who besides yourself is involved in making this decision?”
· If you don’t measure your time, you can’t be in control of it. Be activity-driven and have goals for the activities you need to perform to be successful (number of site visits to non-customers, contractor lunches, cold calls, referrals asked for, etc.). Track these to see how you are doing compared to the goals. Sales people hate this, but being disciplined about it pays off for the sales person and the company.

The seminar Tim presented was half a day long, and he covered a lot of territory that I’ve not reported here. He also explained these points in much more detail with great examples. If you are interested in more information from Tim (he does sales consulting, training and will help in the hiring of sales people), contact him at 615-399-8700 or tim@nashvillesalestraining..com.