benefits of using a peo as an investment real estate and renovation company
Benefits of a PEO for Investment Real Estate & Renovation Company
As the owner of several companies in the property management, renovation and real estate investment space, Joe Franz has always had more than enough work on his plate, and that was just on the front end.
When he added up all the hours it took to handle his administrative tasks, he quickly realized that if he wanted to grow his business, he needed to find a way to free up his schedule to focus on revenue-producing activities. Thats where he began looking for solutions to optimize his time to remain focused on what he knows best.
“I didn’t want to spend my time doing payroll, managing my liability and getting workers’ comp insurance so I was looking for a solution that would be easy to manage for a small business like mine,” said Franz, a licensed general contractor in the state of Florida.
Like any business owner, he turned to his network and started searching for the best value and option to handle employee management and administrative duties. Using his experience and advice from peers he realized the common denominator is that all of the successful business in the industry were utilizing a co-employment solution; a PEO or ASO solution.
At the end of the day he chose to hire a Professional Employer Organization, also known as a PEO. Why? Because he wanted all of these processes to be handled by a single vendor. When you utilize an ASO or administrative service organization, you still need a vendor for payroll, human resources, and workers compensation. PEOs are single-source providers of integrated business services that allow business owners to responsibly outsource many of their human resources, administrative and employment-related tasks in a cost efficient way. Plus, and perhaps most importantly for people in Franz’s position and industry, they can also help with securing workers’ compensation coverage at a competitive rate.
“In the construction field, one of the challenges is to get reasonably priced, easy to manage insurance coverage, in particular, workers compensation coverage,” Franz said. “I could probably do it myself, but I’d have to go through the state agency, and which can cost an arm and a leg. It is expensive.”
Prior to working with a PEO, Franz hired a lot of 1099 employees, which came with its own set of insurance-related headaches and additional administrative duties .
“What you find out is a lot of those people don’t have the proper insurance coverage,” he said. “Not to mention they also don’t always pay their taxes properly or don’t track things the proper way. This can be stressful and risky for an employer like me.”
To mitigate the risk of the liability of a 1099 worker getting injured or fined on a job site, Franz knew he needed to bring them on an employee under his general contractor’s license. If he were going at that route alone, it would mean he would have to pick up the administrative workload he was hoping to avoid. However, by working with a PEO in a contractual co-employment relationship, he was able to maintain his role as worksite employer now that the PEO was recognized as the administrative employer reducing his overall risk.
Franz, who first started working with PEOs about 15 years ago, connected with Tampa-based AXIS Group LLC in 2020 in the midst of very uncertain times considering the pandemic and was instantly impressed with their level of service and industry expertise.
“AXIS was highly recommended by associates and once I met with Patrick [Moraites, partner and VP of AXIS Group], I didn’t need to look anywhere else,” Franz said. “He took all my information, listened to understand my situation, then presented me with three PEO solutions to choose from and explained the pros and cons of each one and how they applied to my situation. His opinion was aligned with mine and I said ‘sign me up.’”
“Soon after that their client care and enrollment team reached out to provide an overview of what the enrollment process would entail, what documents were required, and scheduled a day to get the ball rolling. The onboarding process was quick and easy,” Franz said, and now the time he spends on non-revenue producing tasks is minimal if at all.
“My admin is that I log in on Monday mornings, type in how many hours my employees worked the week before and I hit enter,” he said. “The time I’ve been able to save is fairly significant and I would recommend a PEO to anybody who is in the home improvement field and wants to focus on growing their business.”
All in all, working with a PEO has been a win-win situation for Franz. He gets to run his company his way while taking advantage of the benefits that come with a PEO, many of which aren’t usually available to small businesses.
“It’s a great partnership between owning your own business, having employees and having a 50-50 partnership with someone who’s doing all the back end HR stuff for me,” Franz said. “My employees love it because it’s nice and easy for them. They have someone to call if they have questions and if they want to sign up for health insurance, they can. That’s not something I would be able to provide to a small group of people.”
Curious how a PEO can help your small business thrive and grow? Contact the team of experts at AXIS Group today.