The World Famous "Fence Wizard": 2007

Monday, December 31, 2007

2008 - Fence Industry Notices

Some brief notices that may affect your company heading into the new year:

Starting in 2008 - Tax Law Changes

Self-Employment Tax Contribution Base Increases. The maximum amount of self-employment income subject to Social Security taxes will increase, probably to about $102,000 in 2008, up from $97,500 in 2007. (The exact amount was not set at this writing. Check this Web site for updates.) The self-employment tax rate remains 15.3 percent. The full rate applies to the first $102,000 of self-employment income; after that only the 2.9% Medicare tax applies.

Social Security Tax Contribution Base Increases. The maximum amount of wages subject to Social Security tax will increase to about $102,000 in 2008, up from $97,500 in 2007. (The exact amount was not set at this writing. Check this Web site for updates.) The 7.65 percent tax on employers and employees will apply to the first $102,000 or so of wages; after that only the 1.45% Medicare portion of the tax will apply.

Business Standard Mileage Rate Rises. The standard business mileage rate will increase for miles driven in 2008 for business, up from 48.5 cents per mile in 2007. (The exact 2008 rate was not set at this writing. Check this Web site for updates.) Remember that you can deduct the cost of parking and tolls in addition to the mileage allowance.

Fence Wizard Update on this item:

IRS Announces 2008 Standard Mileage Rates; Rate for Business Miles Set at 50.5 Cents per Mile

Tax-free Parking for Employees. Starting in 2008, firms can pay for $220 a month of parking tax free for employees, up $5 per month from 2007. The cap on tax-free transit passes rises to $115 a month, up $5 a month from 2007.

Increased Section 179 Expense Deduction. The maximum amount of equipment placed in service in 2007 that businesses can expense increases to $128,000, a $3,000 increase from 2007. The annual investment limit increases to $510,000 for 2008, up from $500,000 the year before. Thus, you won't begin to lose the benefit of expensing until you place more than $510,000 of assets in service in 2008.

IRS 2008 Benefit Plan Limits Announced (feed courtesy of Strategic HR Lawyer)

The IRS recently announced benefit plan limits for 2008. Here are some of the highlights:

  • Maximum 401(k) Contributions - $15,500
  • Maximum Compensation Limit - $230,000
  • Highly Compensated Employees - $105,000
  • Annual Contribution Limit for Defined Contribution Plans - $46,000
  • Annual Benefit Limit for Defined Benefit Plans - $185,000
  • Age 50 and Older Catch-Up Contributions (for other than SIMPLE Plans) - $5,000
  • Annual Contribution Limit for 457 Plans - $15,500
Also:
CA Law will take away hand held cell phones and all phones from CA teenage drivers July 1st

Friday, December 28, 2007

Fleet Decisions: Gas vs. Diesel.

Often times we fall into the trap of thinking that overhead costs are generally the same for everyone and there is not all that much we can do about it. An average company can get away with that mentality; a great company scraps and claws for every possible cost advantage over their competitors. In a slow Fence Market - cutting costs and buying smart has never been more important for your bottom line. If you are in position to add or replace a truck in your fleet - we hope this diesel vs. gas comparison will help.

Numerous considerations must go into your decision. You have to worry about insulting the local Chevy dealer if you buy a Ford; will Jim (your best foreman) get mad that his truck is now the second newest because Franks 76' International is the truck your replacing and not his. Will your wife complain that you are spending 50K on a new "work" truck while she is still driving the Volvo that she has managed to dent on all four corners, top, and bottom. We can't calculate those items mathematically; we can estimate the cost per mile of a new truck. Your cost per mile vs. your evil competitor is all that matters here.
We all know that Diesel has outpaced the price of gas per gallon for some time now. Lets briefly review the past three years:
As you can see Diesel is projected to stay higher in 2008 but the cost gap is narrowing. The Fence Wizard Calculator says that Gas was running 5.5% cheaper than diesel in 2005 but that number is expected to narrow to 3.1% in 2008. Those who already own diesel trucks know that paying a small premium for fuel is well worth it - lets briefly review why that is the case:
Diesel trucks get much better mileage when comparing gas trucks with equivalent power (if you can find one). Overall Diesel maintenance costs are cheaper despite higher costs for oil changes; lets skip to the chase - Fleet Central has performed an exhaustive fleet review cost comparison for "Medium Duty" trucks. We will not bother re-inventing the wheel so here it is:
If you are not familiar with the depreciation line item ask your accountant if and how he or she is depreciating your rolling stock and read this depreciation guide.
Ready to go Diesel?
Popular Mechanics just completed a three-way comparison of light duty diesel pickups in their December 2007 issue (Fence Wizard readers may access the article and the video free of charge). They gave the trophy to the Chevy Duramax (fastest 1/4 mile and the best fuel economy of the bunch).The fact is that running 20 year old trucks will keep your cost per mile high - you have to ask yourself how much does one transmission failure 40 miles from town actually cost you? If your ready to upgrade - the Wizard recommends that you think Diesel.

Energy Information Agency
Get Popular Mechanics for just $1.00 per issue with this special Fence Wizard Link

Friday, December 21, 2007

Fence Domains; Good Luck......

The internet has been scoured and picked clean by people with no jobs. They have systematically taken and reserved nearly every possible domain name that you might find useful. If you have an interest in buying a useful domain name in the Fence Industry - here is what we found on www.whois.domaintools.com.
By the way "Fence.com" is for sale but we have not found the information or sale price yet.

Domain Price
PrivateFence.com $200.00
StuccoFence.com $295.00
FenceTree.com $500.00
CountyFence.com $500.00
ActiveFence.com $688.00
FenceMen.com $750.00
WestFence.com $999.00
FenceInstaller.com $1,000.00
AmericanFenceInc.com $1,388.00
CreativeFence.com $1,688.00
FenceKing.com $1,800.00

Thursday, December 13, 2007

A Wizardly Billing Tool....

Doing one of your first Public Works Projects? Have a big Residential job that you need a to send a professional looking progress billing on?

The Wizard has a free tool for you. Call it an early Xmas present. We have developed an Excel file that you can use to professionally bill for partial payments. All you have to do is figure out what percentage of work you have done and punch in the numbers. The rest of the headache of redundant math and percentage calculations will be done automatically for you. This file will also calculate the retention (you choose between 5% or 10% retention). Most General Contractors require a similar format - they should accept this (and they will be impressed with the automatic template). The only problem is that Google Blogger does not allow us to upload the file to this site. So if you want the excel file template just send an email to: fencewizard@gmail.com (Type "Request Excel" in the subject) and we will forward the file to you. You obviously need to already have Microsoft Excel to run this file.

Here is what the template looks like, you can enter in your own item list in the "B" Column - I entered in some example descriptions and values. (click on it to view a larger image):


Saturday, December 8, 2007

The "John 3.16" of your large fence project management.

This post will likely be the most important information that you will ever read here at the Fence Wizard Blog. We say that because if you follow this advice carefully you can avoid being trapped in a position that can unfairly cost you thousands of dollars as a prime contractor or a subcontractor. The Topic: "Organizing and maintaining Correspondence". Have no idea what I'm referring to? That's OK - your in the vast majority group of people who are not attorneys - surely a good thing.

First off this post is specifically a guide for how to manage information from the moment you meet a customer until final payment is received. We are not tackling contracts, profit markup's, bidding, or any type of selling technique.........you are thinking: "What else is there?".

Now - follow this line of thinking: Once you sign a contract with a customer, general contractor, or any entity whatsoever; you are entering a "Legal Agreement". MOST customers will attempt to breach this contract by encouraging you to do work beyond the explicit agreement without compensation. Your goal as a "FOR PROFIT" business is to avoid providing free services at every possible opportunity!

You are reading more carefully now because you are now thinking of the last customer who did this to you - and it may well have been within the past week. Do not get into the truck ever again ready to kill somebody because you just caved in and agreed to provide extra work for a customer who is breaching what you thought was a clear contract for work. All of us have 10,000 of these stories so I wont write the full book here. Every contractor knows this problem; how do you keep yourself out of the work for nothing change order game?

Start Here. From the moment you meet a customer (by phone or in person) begin keeping detailed notes about everything the customer says. Even if they are using incorrect product language or descriptions WRITE IT DOWN and KEEP YOUR NOTES ! It is amazing how many customers will refer to the first or second phone call that you had with them and claim that they had implied for you to include a particular item in your bid (how could they possibly know that you forgot that conversation and did not include the diamond encrusted strike latch (dipped in liquid platinum). Well, the fact is they probably never mentioned the latch - but since you can't remember all 2,000 phone calls this week and you have no method to prove them wrong - you now have to give away the diamond encrusted latch and how on earth will you melt the platinum. While you must begin with good notes, you must take the time to reasonably list all important items and spec descriptions on your work proposal or contract. If your proposal is detailed and never mentions the special latch , then you have ground to stand on. If your proposal and contract never mention any product details - then it can't be assumed that you included or excluded the special latch. Please allow the latch example to be synonimous with (Part 203 F of the 300 page job book that you priced to the school district) or (Option 13 to the Army Core of Engineers that included adding six gate operators but deleting 1800' of a Concrete Retaining Wall previously listed in Option 7A and 7B.

Ok - so first we must keep good "Phone Notes" from day one; second a detailed work proposal or contract. Now the job starts; this means that unexpected events will occur - but before they do you are going to begin keeping a "Daily Project Log". Contractors who win lawsuits brought against them often have just one piece of relevant evidence: THE DAILY PROJECT LOGBOOK. Why? Because a Daily log is the only method you have for proving job site conditions, scheduled events, peculiar things, the light rainfall on Tuesday, your workers hours on site, and any other acts of God that can and will occur. Often small miscellaneous inputs in a logbook will trigger the memory of other things that happened 18 work days ago when the landscaping company was trenching along your posts holes (now a telephone cable is out and you are tagged with a bill for repair). There are millions of reasons to keep project logs; as a rule of thumb for small and mid size fence companies - utilize them for every public works project and every job that will account for 3% or more of your estimated yearly gross income. The format is not crucial but you need to include: the date, weather conditions, scheduled events for the day, worker list with time in and time out, safety meetings and sign ins, and the rest and often the majority should be for miscellaneous notes such as "Dave, the assistant manager, asked for workers to park on street instead of the parking lot for the duration of the project". (Knowing the exact day you were asked to do this could be important - hopefully it is not).

The Project Logs are essential but here is another tip that will not eat up any of your time or your foreman's time: Ask your customer to email you all questions or requests. I know you have email or you would not be reading this. Email is best automatic correspondence device. It marks the exact time and is an exact quote of whatever your customer wants or wants to know about. Email is the contractors best friend and it can bail you out of major disagreements if you can force your customers to use it. The fact is that when you get a cell phone call while you are trying to load a bobcat you are going to forget a certain percentage of the conversation. Very simply ask the caller to shoot you an email because you can't write the message down at the moment. This is the best habit you can get in; avoid blindly discussing project details when you are ill prepared to do so; the customer has the advantage in those scenarios because they prepared prior to calling you. Remember , whatever you say will be held against you when the customer is looking for free add on.

When you follow those basic steps you will have important reference tools for an argument, should one occur. The reality is that doing these things avoids arguments and misunderstandings. There is still the question of how to handle a customer that has a passive aggressive technique of pushing you into a bad position. You have to be tough and calm in these situations - a fight with the customer will never help you finish the job or get paid - never. If you can, avoid making any decisions at the moment a customer corners you. The reality is that a customer can and will develop a strategy to confront you on something you have not thought about and had no intention of providing. Being caught off guard often causes us to simply give in to requests because we feel nervous or unprepared. Listen to all requests, if you do not feel comfortable explaining any answers - then reply: "please let me review my notes and I will call you from the office" or "its a good question, let me review it with the boss and find out".
(SIDENOTE: Its always to your benefit to have a secret evil boss). If you can buy yourself some time you can make a better decision about throwing in the strike latch or presenting your customer with evidence that they chose the fork latch and what the change order amount would be "to add that item to the project". The reality is that sometimes you must throw something in to close out a job. When you provide anything beyond your agreement but decide not to charge for it- send your customer an invoice with the description of the extra work, the fair value price, and then credit the account for a reason such as "good customer discount". It is vital that the customer see what the value of the "free" service was. This encourages them to not actually think its free - reasonable people do not expect free things; they just want a good deal.

Again, unexpected events will occur on every job site and you must protect your company. We know this will happen - when it does:RELAX and do not take personal blame for not having Wizardly foresight. Use your notes and collection of correspondence to prove yourself right; you deserve to be paid for extra work. But are your employees doing extra work without you knowing??? Stay tuned to the Wizard, that article is coming soon.

For a far more detailed experience on the topic The Fence Wizard recommends these books:
Contractor's Guide to Change Orders
Construction Daily Project Log for Construction & Maintenance

Tuesday, December 4, 2007

Fence Industry outlook - what can the stock market tell us?

We have all been affected by the construction slowdown - especially those who are focused on residential work. When will it come back? How can we forecast 2008 and beyond. Well, no single person or indicator could do that alone. However, "The World Famous Fence Wizard" is here to guide the Fence Universe and that is what shall be done.

Lets give Wall Street a chance to help. The Wizard has developed the following fund (first of its kind) of publicly traded companies that are directly related to fence material, raw product, and the Construction Industry. The idea is to evaluate a group of companies and stocks to get an idea of what Wall Street is betting on going forward. The difficulty is that there are very few publicly traded companies that focus on the fence industry. The test fund is diversified but the focus is on companies with a strong American presence; this is not an international gauge at this time. When it comes to materials such as raw steel, zinc or timber we must remember that such markets are without doubt related to the world economy, if zinc prices are up worldwide then zinc stocks will rise even if domestic demand is weak. Also - high raw material prices often indicate a strong market but we must recognize they directly hurt end users like Fence Installers who have to pay more for product. So if world demand for zinc is high - Joe Blow's Chain Link Fence Company will pay the high demand price regardless of the strength of demand in his market . Without further ado here are the fund selections, split into three groups:

1. Residential Related industries
TWP (Trex, the largest composite fence and deck manufacturer).
HD (Home Depot - we must included the giant in building product retail).
XHB
(This is an index fund of U.S homebuilders...... new homes = new fences).
WLK
(Westlake Chemical Principal is a leader in manufactured vinyl products including fence).

1year chart for this group: down 45% combined

3 month chart for this group: Down 32.25% combined
Conclusions - as expected, residential related industry has been hit very hard, the worst of our 3 subgroups, the sub prime fiasco seems to have pushed these stocks down further, the 3 month drop is substantial.

2. Commercial and Industrial Related Industries
ZRBA (Zareba Systems, Inc. is the world's leading manufacturer of electronic perimeter fence and security systems for animal and access control).
GVA
(Granite Construction Co. is a regular play for those betting on increased spending on public works and building projects throughout the country)
DJ_2357
(Dow Jones Heavy Construction Fund - we all know that security and fence follow these projects at regular if not increasing rate)

1year chart for this group: Up 19.33% combined

3 month chart for this group: Down 14.66% combined
Conclusions: Stronger then the residential indicators because it is not dependent on the rise and fall of new homes and less dependent on consumer spending and credit worthiness. The Government will keep spending on public works -that helps holds heavy construction spending closer to constant.

3. Raw material / mining, lumber, chemical, steel etc.- again international demand affects this group and it relates to all types of end users. Did you know copper prices affect the cost of pressure treated wood posts?

VMC (Vulcan Materials;concrete and aggregate products).
DJ_1733
(Dow Jones US Forestry Index covers all the major lumber yards and mills).

DJ_1770 (This global mining index includes holdings in all the big names).
DJ_1757
(Dow Jones U.S. Steel Index)

1year chart for this group: Up 15.5% combined

3 month chart for this group: Up 8.5% combined

Conclusion: this group has gathered significant profit from worldwide demand for material, strength in these stocks, especially mining, will actually create a burden for domestic construction to recover as foreign demand drives up pricing. Another issue - the weak dollar makes it more and more expensive for American business to buy anything on the world market. For example - if a vinyl manufacturer is buying chemicals and oil derivatives it will cost more in dollars as our currency remains weak. Conversely, If you are drilling for crude in Texas you are benefiting greatly from a weak dollar that is helping to push up the price of oil. World markets are affecting your local company, it is important to understand why.

The Wizard Fence Fund Indicator totals:
All groups combined past 1 year: Down 3.4%
All groups combined past 3 months: Down 3.1%
This suggests that the forward thinking is very negative. We need to see the past 3 months beat the 52 week trend and turn positive in order to conclude any positive outlook is occuring on Wall St. Most of the weakness remains in residential building - this wont change much in 2008 and will likely get worse. Lets check back on this in 3 months and see if we can locate any improvement.

Here is a tip - try to avoid investing in any of stocks or etf's that i listed in the first two categories. In fact, you would want to do the opposite - short those groups (bet against them). As a member of the fence industry and the overall construction industry you already have significant risk and reward already built in to everything on the list. To be diversified, you need to invest in other industry. Remember all of the workers at Enron who had all of their savings in Enron stock..... bad idea. You could take a small stake in the "raw material" group - this would help "Hedge" your company against rising material costs in the same way that Airlines invest in crude oil futures. You too would want to have some investment in energy, this would help to "Hedge" your bottom line against things that hurt your company like higher fuel prices and electric bills. If stock in Exxon Mobile drops - don't worry too much, your probably paying less on fuel for the company fleet. Please remember - these are very basic concepts to consider and not right for everyone.

Related Articles of interest:
World Fence News Contributer Jim Lucci describes the tight rope for the fence industry.
Jp Morgan Analyst predicts Lumber Markets have reached bottom.
Matt McCall, president of Penn Financial Group says its time to look at investing in homebuilders.
World Fence News Staff Aritcle "December Field Report"

Sunday, December 2, 2007

Fencetech 2008 etc.......

FEB 5-7: Fencetech will be at the Mandalay Bay in Las Vegas, NV. Click here for AFA's website information and schedule. Still no indication if the Fence industry will take a larger role in the installation of pipe for pole dancing, apparently most show goers spend significant time analyzing structural stability of such "posts" from a 10' - 20' distance.

For those on the east coast you can see most of of the big names the following week at......
FEB 13-16: The 2008 International Builders Show will be in Orlando, FL - Tickets will set you back $100.00 so don't bother taking the kids. To see the complete list of fence manufactures and distributors that will have booths click here.
Also - for a quick look at the ISB show featured products click here.

For a huge list of construction related Trade Shows, locations, and dates try: www.biztradeshows.com. The Biztradeshow list is not complete to be sure - it does not have either show I described above.
World Fence News Puts Out This Event List As Well.

Thursday, November 29, 2007

United Fencers Network Established on Facebook...

The United Fencers Network or UFN has recently been established on facebook. Facebook allows groups of the same ilk to converse, meet, and discuss common interests. The UFN will be focused on concepts and concerns that suppliers and installers are currently dealing with. The advantage of using Facebook for this enterprise allows free access to all who join, access to industry news, and instant communication with other companies, suppliers, and even customers that are literally around the world.

When you have a minute or two - stop by www.facebook.com - sign up - and look for the United Fencers Network (UFN). It's easier than running a 20' stringline and hopefully it will keep us all in line. Our consumers are online now - lets get back ahead of the game, get informed and connected. Let me make it easier::::
Here is a shortcut - follow the linkbelow:
http://www.facebook.com/p.php?i=773340998&k=Y6GZYVUZQWXMXEGDSJ46R

Everyone can join Facebook free and easy. To register, go to:
http://www.facebook.com/p.php?i=773340998&k=Y6GZYVUZQWXMXEGDSJ46R&r

Monday, November 26, 2007

Historic Fence photos......

The Fence Wizard will be posting historic pictures of installation and equipment in December. Send the Wizard a historic pic from your companies past with a full description. Lets not forget where we all came from just a short time ago.


Send your pics to: fencewizard@gmail.com

Sunday, November 18, 2007

A New Player In Aluminum Fencing...

North Carolina based "Aluminum Fences Direct" has jumped into the retail and wholesale aluminum fence market. All panels are assembled in the U.S. - they also get all raw material from U.S. sources - a rarity in the segment. The Warranty appears to be an industry best and pricing appears to be extremely competitive with wholesale sources. I asked management a few questions and here is some more info for Fence Wizard readers:

With our volume commitment and national coverage, we have contracted an aggressive discount structure that we're able to forward on to you... the DIY home owner and smaller fence contractors.

As mentioned, all of our aluminum fence panels, posts and gates are made and assembled in the USA which is why we can offer such a quick turn-around of just 5-10 business days.

We have some traditional styles like most aluminum fence companies, but another thing that sets us apart is some of our unique styles. We have a cast aluminum style that looks just like wrought-iron and we have a more traditional style that resembles a curved gothic top. These styles and more are only offered through our unique manufacture source.

We have a great deal of knowledge about fencing, especially aluminum, so if you have any questions in what you might need, please don't hesitate to contact us. Visit our website to see how we’re different from all of our competitors. Thank you for your consideration!

Additional Information:
Limited Lifetime Warranty Info
Pictures

Monday, November 12, 2007

Architects already know it - go to caddesisgns.com



This website can be a great tool for folks looking to specifiy exactly what they want on their private business or even residential fence project. Its very simple and this is a free site --- go to http://www.caddesigns.com/
Type in "Fence" in the main search on the top of the page and you will see:

CSI CATEGORIES (Select category to refine search)

(32 31 00) fences and gates
(32 31 13) chain link fences and gates
(32 31 19) decorative metal fences and gates
(32 31 29) wood fences and gates
(32 31 23) plastic fences and gates
(32 31 16) welded wire fences and gates

(Go ahead and use the above category links, I made them active)
Follow your nose from there - you will have acces to designs like the
one pictured (Top) from Builders Fence Company.



Sunday, November 11, 2007

TREX sets aside another $45 million for defective product replacements....

TREX is one of the nations largest manufacturer of Fence and Deck material and has seen its stock price fall from $27.70 back in February to the current price of $8.00 on Nov 9, 2007. Trex had already lowered 2007 earnings estimates citing a significant effect from the construction slowdown. But the Fence Wizard is focused on the announcement of the massive $45million charge to create a reserve for defective product replacement. If you install or own a TREX product - please comment and let us know what is going on with this company and how you have been affected. Is Trex paying for labor to replace defective products?

Nov. 6, 2007, 7:48AM: 3Q Loss for Deck and Fence Maker Trex
© 2007 The Associated Press

WINCHESTER, Va. — Trex Co. Inc., which makes decking, railing and fencing products, said Tuesday it swung to a loss in its third quarter due mainly to a large reserve for replacing defective decking material manufactured at one of its plants.

For the quarter ended Sept. 30, the company reported a loss of $41.2 million, or $2.77 per share, compared to a profit of $4.6 million, or 31 cents per share, in the prior year quarter.
Analysts polled by Thomson Financial expected a profit of 11 cents per share. Trex said its profit was hurt by a $45 million increase to a product defect reserve for the replacement of decking material manufactured at its Nevada plant between 2003 and 2006 and a $9.4 million inventory adjustment. Revenue fell 18 percent to $64 million from $78.1 million in the third quarter of 2006. Analysts predicted revenue of $75.9 million.

Trex Warranty Infomation
Trex Press Release addresses Defect Issue



Friday, November 9, 2007

How to find and hire an employee....

This is the best article I have read on the subject, it was brought to us from Fenceweek.

FINDING GOOD EMPLOYEES (using your cell phone)

Good employees, with a strong work ethic and knowledge of their trade, are already employed. When they want to change jobs, they can usually do so quickly. That is why, when you decide to hire an employee, you also need to move quickly.

Here is a method that some of our coaching clients are using and so far it is working great.

Write a four or five line ad, starting with "Top Pay for (insert job name here)." Then list briefly what you are looking for, i.e., experience, must have own hand tools, late model vehicle, good driving record, no drugs or alcohol, whatever else you feel is important. The key phrase is "Top Pay for . . . "

Put the ad everywhere you can: in the paper, on the Internet, on the bulletin board at the supply house. List your cell phone number - and make sure you have your cell phone with you to take the calls. When potential employees call in, here is what you say:

"I'm going to give you a 30 second commercial about the job, when I am done I want you to tell me if you can do it. You will be checked and evaluated during the first two weeks of employment so if you tell me you can do the job, be aware you will be checked and tested. I will not talk about money on this call. If you can do the job, we will meet later today or tomorrow morning, have some coffee, talk about the job, the pay and see if there is a fit between us. Is that fair enough?"

Now, notice that you won't talk money. That forces the potential employee to focus on the job requirements, and it stops your competition from calling and finding out what you are willing to pay good help. If the caller comes back with any questions about pay, they are the wrong person for you. Their focus is obviously on the pay, not the work, and it tells you they won't follow directions!

Give them the short commercial, describing the work and the requirements. Remember to keep it short and to the point. 30 seconds is plenty of time to tell them what you want. When you are done, you ask them, "Can you do that job?" If they say no, then say good-bye nicely. That is one less resume to look at, one less interview to hold - both you and the potential employee have saved time.

If the answer is yes, set a time and place to meet for coffee. When you meet, go through your normal hiring questions. If they measure up, hire them on the spot. Forget the resume and job history stuff. Good employees are not going to hang around waiting for you to go through the three to five week game of interviewing every guy in the world. Give your new employees a two-week trial period. If they make it through the first two weeks, there should be a second probationary period so you get a chance to really see what they are like and what they can do. The second period should be at least six weeks or more. At the end of the second trial period, you set their wage.

Remember, asking for resumes, former employers, and the rest of the fall-da-rah that goes with that approach seldom will get you the same truth that a short trial period will provide. If they don't work out, send them down the road and start over.

You should have an employee manual in place, and one job requirement is reading and signing the manual. If they won't sign the manual, don't hire them. In today's market, the deck is stacked more and more on the side of employees, and you must protect yourself and your company from those who are looking for a free lunch.

Using this approach, you will find that good employees are available, and they are ready to move ahead. Be ready to move ahead as well and you'll save yourself time and aggravation.

Final Comment:

I can't emphasize enough the value of a good employee manual.

I received a call from a company that terminated an employee. Almost a year later, the employee sued them for $26,000 for discrimination, etc. In your employee manual, include language that states they can only file a claim against your company for a period of 6 months after they leave. That limit has been upheld in the courts. Have your attorney write it, add it to your employee manual, and be sure that everyone, including long time employees, sign off on it. Cover Your Assets.

Thursday, November 8, 2007

The Story long ignored by US media: the overwhelming success of Israel's border fence

The Fence Wizard staff has brought you the complete story that has miraculously gone unreported concerning the Israeli border fence and its effect against terror attacks. The links, videos, and slide shows below will convey an enormous amount of information in just minutes - this is well worth it, the information is well presented. Once you absorb this basic information you will be forced to wonder- Why have I not heard about this?????

Click HERE for the official Israeli Diplomatic Website....below are the key links:
The Anti-Terrorist Fence - Facts and Figures: English
The Anti-Terrorist Fence - An Overview: A comprehensive summary of the major issues concerning the fence (WORD 62 KB)
Saving Lives: Israel's Security Fence (pps): English (2mb)
Which Is Really Worse
(pps 1mb)

Fence Against Terror (Video - IDF Spokesperson production). Ramadan Shalah, Palestinian Islamic Jihad leader,publicly admits that Israel's Security Fence is an important obstacle to the terrorist organizations policy of carrying out suicide attacks.

Although the media describes the fence as a wall, 96% is rather rudimentary chain link fencing. The walled section was erected to protect a highway from rooftop sniper fire that had become a regular problem. The erection of a fence in this case has saved lives. It has increased the freedom of peaceful people. The ultimate display of a good fence making good neighbors. The fence is not the answer to all problems, but it is saving lives and adding Wizard like stability.

Tuesday, November 6, 2007

Update: Golden State Fence, Guilty or an unfair poster child?

As promised the Fence Wizard responds to Golden State Fence founder and CEO Mel Kay's rebuttal regarding his company, for full context the Wizard recommends reading Mel’s comments, click: The World Famous "Fence Wizard": Mel Kay defends Golden State Fence reputation and history....

Here is the Wizardly Response:
Mel States: “First of all, there has never been any attempt to sidestep the law to undersell our competition”

The Wizard finds that sidestepping the law is exactly what your company pled guilty to. Golden State Fence was not just found guilty of hiring illegals; it was the conspiratorial aspect that Golden State Attorneys could not shake the prosecutors from. Those “10 employees (who didn't make one iota’s difference to our bottom line)” were found in prior government audits to be illegally employed. When they were later found at other Golden State locations still employed - it was clear that Golden State had not made a satisfactory effort to change its ways. So why was Golden State made an example of when so many companies have been caught hiring illegals? The Associated Press offered the following: “You have to show a kind of criminal conspiracy,” said Steven Camarota, research director of the Center for Immigration Studies in Washington, a group that advocates tighter immigration controls. “The mere hiring of illegals is not enough.”

Prosecutors agreed and brought charges against Golden State Fence for the repeated non-compliance. Its hard to ignore that the Federal Government notified your company in writing in July 1999 that at least 15 of its employees at its Oceanside office were discovered to be illegal aliens following a visit by agents. “At that time, Golden State executives said they were terminating the illegal workers, but in September 2004, U.S. Immigration and Customs Enforcement (ICE) agents found that 49 Golden State employees at the Oceanside office were illegal aliens”. http://search.washtimes.com/national/20070330-124512-2035r.htm

This is not a record of attempted compliance – after being warned at just one of eight locations (Oceanside) your company increased the amount of undocumented labor by 310% at that location alone.

Mel States: “We lead the nation in our industry regarding the wages we pay our employees from the yard personnel to installation to office”

How can you possibly know this? Have you surveyed every fence company in the nation? Certainly any company that regularly wins government contracts must pay prevailing wage rates (either state or federal) to it’s workers. Those rates are typically between $35-$60 per hour depending on the project and classifications assigned for the project. Non-Union workers earning those rates can make over 100K per year; certainly a wonderful thing – but these rates are not established by Golden State – they are required rates. This makes the undocumented labor violations all the more egregious. By knowingly hiring illegals, as you pled guilty to – you took excellent jobs away from US citizens. Lets be direct on this – the growth and success of Golden State Fence Company came at the expense of some US citizens and to the great expense of companies who did not hire suspected illegal immigrants. Although Judge Moskowitz agreed that Golden State had paid good wages and benefits; the advantage of hiring undocumented workers cannot be discounted. With low unemployment rates, as seen over the past several years, there are only so many workers available in the labor pool – companies that did not hire suspected illegals were at a great disadvantage to Golden State and any other company that did not constrict themselves to the law. This is why it is remarkable that after years upon years of increasing its market share, Golden State Fence has the audacity to ask other companies to forgo the practice that gave it such market advantages and profits while taking away so much work from any company that held the line regarding employment law.

This begs the question – How does Golden State Fence or Fence Corporation, or whatever other name you like, get away with continuing to bid government projects despite being caught for hiring illegals? Maybe the attorneys at Golden State have figured out how to duck the law on this as well – I think we are all curious as to how its possible. Are we to believe that Golden State made sure to only allow its illegal workers to work for the residential portion of the company? Would this not prove without any doubt that you knew exactly which workers were illegal and which ones were legal? If not, how can you explain the continued bidding on public works projects with Fence Corp? Is Fence Corp not part of the Golden State Family that paid about $5 million in fines for the violations described, thus making it in-eligible to bid public works?

Mel states: “We also provide two-three week vacations, holiday, sick pay..”

The Wizard is very impressed with this, although it seems nearly impossible to give workers 6 weeks off per year plus sick pay. This equates to over 15% of the year paid without work – hard to believe but we will take you at your word.

Mel states: “Illegal Immigration - We hired 1942 employees from September 1999 thru November 2005.” ……… “The majority of our installers have been with our company 15-25 years”

The Wizard Cannot ignore these two conflicting statements. If “most” workers have been with the company for 15 years or longer how can you explain the turnover you cite with hiring over 1942 workers over a 6 year span while maintaining a workforce of about 500-700 according to quoted sources.

To make these figures fly we would have to assume the following:

Most workers= at minimum 251 (a tiny majority of 500). This leaves 249 others (the minority). 1942 workers hired /249 slots available = 7.8 workers hired per slot. Using that data over a period of approximately 6 years:

6years/ 7.8 hired per slot = .77 years worked per employee hired during the 1999-2005 span.

This basic math tells us that roughly half of the employees hired during that period would not have ever become eligible for the vacation pay and probably other benefits that arise from working at least a full year. Perhaps this explains some of the savings that comes from hiring and firing (or simply losing) such huge numbers of workers. Certainly this amount of turnover is not common in the industry – not to that degree. In fact it reminds me of a scheme that many US resorts use during peak season; ski resorts for example will hire large percentages of young foreign workers to work the season. Most of the benefits offered to them require a full years work, however most of them did not understand the benefits package and never intended to work more than the peak season and do not have legal visas to stay that long. Its a great deal for the resorts; very misleading to the foreign students on the work visas.

In short, the Fence Wizard wishes to bring attention to your new programs that are targeted at fixing the system that we all have to deal with. If the Wizard can be of service - we would be happy to share and help provide such information to others in the fence industry and beyond. Certainly no person wishes any other business to suffer as yours surely has from workers who bring false ID and false SSN’s to a job interview.

Finally, while the Wizard will not waiver regarding the law, we can certainly move forward to insure that others comply with the law. The terrible misfortune for all of us is that the Federal Governments is has been unable to seal the border and to provide a reasonable guest worker system that is accountable to the American Voter and the American Taxpayer. Had these ends been met – no company would ever have the burden that Golden State Fence Co. has faced.

The following publications were utilized:
http://www.msnbc.msn.com/id/16211320/ ; http://search.washtimes.com/national/20070330-124512-2035r.htm http://query.nytimes.com/gst/fullpage.html?res=9B0CEEDC1231F936A25751C1A9609C8B63
San Diego Tribune
Relevant Links about this discussion:
Golden State Employment Link
Golden State Fence Official Website
Mel Kay Autobiography

1st annual web design awards for fence companies

This guide should serve a model for up and coming companies to view and emulate the best websites in the fencing industry. If you see a category that we have missed or a company website that trumps our choice -LET US KNOW! Its a big internet out there.

Category #1: Best product (manufacturer website)
..........www.fenceonline.com
Lots of ideas, options, and pictures. Clearly the online fence info winner and its from a company with a long history of quality distribution.

Category #2: Best new product website.............. www.simtekfence.com
This must be the fastest growing fence product in America with dealerships now expanded throughout the country. The growth is so promising that Simtek spun off from the parent company "Mity Lite" into a stand alone company.

Category #3: Best local fence company website............www.champifence.com
Found this one from Central California - gives viewers important company information and background and then hits you with recent project pictures and key links right on the homepage; very professional. Nick Champi Enterprises Inc.

Category #4: Most travelled Fence Website..............www.hooverfence.com
According to alexa.com and wholinkstome.com the winner for this category is Hoover Fence - they have been online retailing for longer then anyone and getting more hits than anyone else.

Category #5: Earth friendly Fence product that makes sense.... www.calibamboo.com
Cali Bamboo is worth a visit even if you have no current fence needs; check out the multitude of project pictures and ideas for inside and out of your home. For you Greenies - check out their regular newsletter and total commitment to renewable resources; the Wizard is impressed the companies 1% giveback program .

Category #6: Best online tool for Fence Companies...........www.fencebids.com
A good source of projects coming up for bid and vast array of industry news; Gene Kalb has been a well known member of the fence industry for many years, thank Gene. Just remember, he is no Fence Wizard - but then again, who is?

Monday, November 5, 2007

Golden State Fence changes name to "Fence Works" in attempt to rebuild reputaion....

For many years Golden State Fence sidestepped the law in a successful attempt to undersell its competition. Golden State Fence attacked competitors from every angle - Cheaper labor, cheaper materials, and even targeted price dumping in order to put some competition completely out of business. Approximately 225 workers at Golden State Fence were found to be illegal aliens - some of them had already been outed 6 years prior by an immigration audit and Golden State simply shuffled them around. The following legal drama resulted in millions of dollars of fines and a house arrest for owner Mel Kay, the company has now floated several new names. The first attempt was "Fence Specialties" however when looking at the website and the name "www.fencespecialties.com" one may have thought that they were selling special "ties". The name was skirted and according to the latest available news the new name will be "Fence Works". Other indications are that the industrial side of the company will operate under the name "Fence Corp". Whatever the name - Golden State Fence is a proven cheater of the worst kind. For years they cheated the law in order to beat down any competition that dared to abide by the basic labor laws. Now "Fence Works" has the audacity to beg other companies to implement a special citizenry check; here is what they write on their web page:

"Fenceworks encourages other companies in the fencing business to also participate in these government programs as this creates a level playing field in the industry and is the best way to reassure our customers that we are providing dependable service with legally documented workers."

Lets leave it at this - The World Famous Fence Wizard has a good memory, whatever the name, a cheater is a cheater.

Saturday, November 3, 2007

Mel Kay defends Golden State Fence reputation and history....

As visible below, Mel Kay has commented directly on the Fence Wizard article "Golden State Fence changes name to "Fence Works" in attempt to rebuild reputation...."
Because this is an open forum we are posting Mel's response as an original article in order to provide him with a fair opportunity to have his comments read by all.

Dear Fence Wizard:

I was shocked at all the inaccuracies after reading your column in regards to Fenceworks. Please allow us the same space to address these outrageous accusations.

First of all, there has never been any attempt to sidestep the law to undersell our competition. Our success rate from bid to sell is not much different that anyone else. We just bid more projects.

Cheaper labor? We lead the nation in our industry regarding the wages we pay our employees from the yard personnel to installation to office. Our installers averaged $59M a year for 2004-2006. Some earned as high as $105M. We also provide two-three week vacations, holiday, sick pay plus health insurance along with a life insurance policy and it doesn’t matter what color their skin is or where they were born. The majority of our installers have been with our company 15-25 years. That must say something for our company.

Cheaper materials? Oh my goodness – we’re the ones that led the way starting in 1992 changing the standard practice of setting raw steel posts for wrought iron fencing to using all galvanized posts and we are still one of the few contractors doing this.

We’re the ones who developed and changed the installation method of welding to bolt-on attachments to avoid field welding which penetrates all the coats of paint and promotes rust.

We’re the ones who led the industry in selling only pre-galvanized wrought iron or aluminum and today, we’re one of the few shops adhering 100% to this policy – all at an additional cost to us.

We’re the ones who set the standards for implementing the use of only hi-grade fence board and rails. If it doesn’t meet the grade standard of the West Coast Lumberman’s Inspection Board (WCLIB) Paragraph 117A, we leave it alone and let others buy it. Please visit any of our jobsites over the last 12-15 years and see the proof.

We’re the ones that were instrumental in getting some of the major vinyl fence manufacturers to increase the thickness of their product to improve stability.

Price dumping? Where in the world did this come from? Because we pay our bills on time, work our butts off, and put our company first allowing us to buy direct from the source such as sawmills, steel mills, vinyl manufacturers, etc., we’re accused of price dumping? Nothing is further from the truth. We just eliminate the middleman.

Illegal Immigration - We hired 1942 employees from September 1999 thru November 2005. Ten of those employees were rehired under different names at different locations – not 235. For this we paid a steep, steep price – a lifetime of retirement savings and investments, and irreparable damage to an impeccable record of 40+ years in the fence business. As Harry Truman once said, “The buck stops here” and along with my VP & GM, Mr. Michael McLaughlin, we stepped up to the plate and accepted full responsibility for the 10 employees (who didn’t make one iota’s difference to our bottom line). If anything, we were guilty of too much compassion!

Name Change? Since our incorporation in 1998, we’ve always been Fenceworks, Incorporated DBA Golden State Fence Company and this was only because we found there was another Golden State Fence that had incorporated that name in Sacramento before us. As work has slowed due to the horrific construction slump, we’ve been pushing out further and further to try and get work. In doing so, we’re now operating in the Sacramento area – the same city the other Golden State Fence operates out of so therefore it was necessary to switch to Fenceworks Inc. to avoid confusion. Nothing devious about this.

Fence Specialties – We have a wholesale operation that sells only materials and we operate it as a separate division. Nothing devious about this.

Fencecorp – Yes, it’s our public works shop, same as some of our other competition does with different shops. These jobs pay extremely high wages and are much different than the private contractor-type fencing we provide through Fenceworks/Golden State Fence and it helps to keep it separated. Nothing devious about this.

You say we have the audacity to beg other companies to implement a citizenry check. You bet we do. I will do whatever I can to warn others in my trade (or any other) to avoid what happened to Golden State Fence, Mike McLaughlin, and me personally. I wouldn’t wish that on anyone.

We’ve become very proactive. We’ve paid our attorneys to speak before builders conventions. We’ve done the same at subcontractor meetings. Many of our competitors have visited our office for further guidance and information which we gladly provided. I am personally speaking before the American Immigration Lawyers Association Convention on 11/30/07 in Scottsdale, AZ. We are signatory to the E-Verify Federal Voluntary Program and every Fenceworks employee has been run through it. We’ve adopted a new Code of Ethics and Conduct that the government helped us prepare and we’ve shared this with numerous competitors. So yes, I am guilty of the above. Please keep in mind, more fence companies than not currently employ “illegals”.

In closing, I am hoping you will be fair and let this also be publicized. I would also like to extend my personal invitation (all expenses paid by us) for you to visit our facility so you are able to meet those that make our organization work. I believe once you see first hand how Fenceworks really operates, you will realize how unfair it was in accusing us of being cheaters. I look forward to meeting you. I feel between what you have to offer along with ourselves, this may be an opportunity to help a lot of other companies from falling into the same situation we experienced.

Sincerely,
Mel Kay
President/CEO

Wednesday, October 17, 2007

Technorati invites Fence Wizard Blog to domain.....

Google Analytics reports that the Fence Wizard has quickly become one of the most travelled sites in Fence related industries, hits have been collected from over 60 countries with an average of 250 unique visitors daily. Thanks to all of you that are sending in email questions, we respond as quickly as possible.
Click: Technorati Profile

Tuesday, October 2, 2007

Unique and Unusual Fence Gifts and Apparel

You were kind of hoping that this stuff did not exist..........Well - it does. Consider this the complete list of ridiculous gifts for the Fence Man or Fence Woman that has everything.



To reach the official main page of The World Famous Fence Wizard, Just click here.

Friday, September 21, 2007

Fence Industry Wildcard: "DOGS".

As implied in previous articles by the Fence Wizard the residential fence installation market is enduring a complete recession in "most" American markets and will likely get worse in the short term. One bright spot - new dog owners. Americans have a love affair with dogs. Chances are if a homeowner has no dog; they will get one soon. In addition, new laws such as the no chain law in California are basically forcing some Dog Owners to repair, replace, or add a new fence to comply. It is vital to focus on any trend that could make your company more competitive. The facts are clear, more Americans are getting pets and they are spending more money on pets every year.
Here is some relevant data from the APPMA (American Pet Products Manufacturers Association):

Total U.S. Pet Industry Expenditures

Year............... Spending (in billions)

2007............... $40.8 Est.
2006
............... $38.5
2005
............... $36.3

2004............... $34.4

2003............... $32.4

2002............... $29.5

2001............... $28.5

1998............... $23

1996............... $21

1994............... $17

Now, we know we have demand for anything relevant to pet owners and specifically dog owners. Lets address a big problem: "ELECTRONIC DOG FENCING" or "INVISIBLE FENCE". I have linked our readers to these products on the sidebar under "Fence Builders Enemy". Indeed it is exactly that and for a couple hundred bucks homeowners can avoid a $ 5 -10,000 perimeter fence installation. So lets review your sales technique if you think your customer might go to the dark side......
Invisible fence will NOT:
1. Keep out other animals
2. Protect your animals from attack by other animals
3. Keep out thieves
4. Keep out vandals
5. Keep out Jehovah's Witness's
6. Most importantly - it will not guarantee a pet from escape
7. It Can and Will effectively lock your dog out if they get excited and breach the perimeter then they may be too scared to return and suffer another shock.

Get your sales pitch straight, it only takes 2 minutes to explain why you would personally avoid the lure of a cheap invisible fence for your own animals. Be a good member of the community and stop by the local SPCA and even pet shops to leave your card. Develop relationships with others in the animal care industry including your local veterinarians. Use this bright spot in the market to your advantage - the growth in this area will not stop anytime soon.

Add to Technorati Favorites