I have been kicking around an idea for years that seems to be gaining traction in my internal “go-no go” decision process. I am contemplating accepting credit cards as payment in my small construction company. Granted, this may not work for every situation, but for small projects it may work well. Here are my off-the-cuff thoughts.

The reasons for:
• While I may take a 2 to 4 percent hit (+/- from the research I’ve done) from the credit card processor, payment to my company’s account can be cut down to hours rather than weeks. It also eliminates the drudgery of mailing an invoice and the follow-up that often remains.
• Dealing with banks and home equity lines of credit are becoming more and more burdensome from a time perspective.
• Convenience is important. I am working on leaning and streamlining as much as possible, and this seems like it may be a partial solution.
• I can begin generating electronic invoices and accept payment via a secure website. Again, less paper waste, more audit trail and convenience for the customer (and me).
• Technology seems to be expanding in this area. A web connection allows it to be processed in the field, if the customer wishes.

The reasons against:
• I will take a potential 2 to 4 percent hit when I can afford it least.
• In these days of ever increasing fees and cost pressure, how do I make that up?
• Is there a perceived status difference in accepting credit cards? Will my firm become a “Buy here, pay here” kind of place? You know – $99 down and only $99 per month!!
• Will my clients find this useful or a nuisance?

I would love to here if any other firms have found accepting credit cards to be useful or a nuisance. At this point I could be talked into either direction. Even on larger projects, milestone payments may be small enough to make this work and allow the customer some options for improving cash flow. Very curious to find out more.

Let me start by saying that I am a dyed-in-the-wool believer in our version of capitalism.  All the good, the bad, the ugly, I firmly believe it is the most efficient and fair system yet devised.  I hesitated discussing this topic on a short blog post, but I firmly believe that healthcare is a distinct problem for us as an industry.  I don’t have the answers, but I do know that the costs of the current system make providing health coverage to our employees increasingly difficult, if not impossible, to maintain. 

Normally, when costs rise beyond a standard rate of inflation,  the market generally sees an opportunity to earn money and fills that need with hospitals, outpatient care facilities, etc.   Young people train as doctors, nurses and anesthesitists because the demand is so great.  In essence, the void is filled by competitive forces and costs normalize over a period of time.  If they don’t, and the cost of service outstrips the consumer’s ability to pay it, we have a healthcare version of a bubble bursting.  This is how it should work.  But something in the system is not functioning, costs rise annually well beyond inflation, and the losers are the business that pays all or a portion of healthcare coverage costs for their employees and the employees themselves.

Now that we have determined that I can see a giant brick wall crashing down around me, what is the solution?  What have some of you done to lessen your healthcare coverage costs, or at least ease the insatiable rate increases?  A construction company, billing $45/hr. or so for skilled tradesman does not have the additional revenue to absorb double digit percentage increases yearly.  In this market of declining revenue, the simple solution is to drop coverage for your employees.  This can cause a downward spiral effect as quality employees leave for locales that offer health coverage.  Not a pretty picture from any vantage point.

Some firms are exploring  Health Savings Accounts (HSA’s) and Health Reimbursement Accounts (HRA’s).  In effect, these are high deductible plans with a fairly substantial co-pay.  In the HSA, the employee keeps the funds in the account at the end of the year, in the HRA the employer keeps them.  Folks in our industry have told me that these work well for construction firms where the majority of workers are under the age of 35 and in relatively strong health.

Other firms I have spoke with have joined forces with groups in order to leverage purchasing power.  Perhaps the local Home Builder’s Association has an option availabe.  In any regard, providing coverage is increasingly expensive, and many of our brethren in the industry, through no real choice of their own, have to opt out of providing coverage to their employees.  We all lose in this instance.  Our best and brightest will not stay with us for long without a competitive benefit package. 

In short, please explore all available options (Group plans; HMO’s; increase co-pay; HSA’s or HRA’s) before eliminating the benefit altogether.  Keep open lines of communication with your staff.  Examine your plan yearly and shop it competitively.  Some employees may be willing to fore go a raise in order to keep their premiums affordable.  Our national healthcare system is in trouble.  Our ability to stay a worthy competitor for bright young talent hangs on our industry’s ability to provide good pay and benefits, along with quality of life issues.  I personally don’t believe a socialized medical system is the solution.  But I also know that high single digit or double digit annual cost increases are simply not sustainable and will cripple our industry.

What have some of you done to provide this benefit affordably to your staffs?  I, and many others I will assume, would love to hear any and all options available to us.