Vital Strategies for Surviving the ISP Transition

www.yourisphelpguy.com

For many contractors the New Year is beginning with a major change from FedEx Ground and the nationwide ISP transition from the current CSP model…some much sooner than later. By now contractors throughout the US are asking the questions of the “W’s”:

What is the ISP transition?

Why is it happening now?

What does is it mean for my business?

Who can help me?

…And many more questions…

The answers are all there for the contractor and are provided by FXG with its station management and its transitional workbook…to a degree! There are guidelines and limitations that are set by the law of business when dealing with independent contractors. For example, massive corporate conversions or transitions will design and execute tasks of a conversion based on the segments of the business such as locations, departments, and timelines. These tasks are assigned to a specific gateway within the corporation’s transitional goals and are typically for the corporation’s assets, related to its companies or divisions. The difference with the corporate and FXG conversions is that FXG is not buying out a division or eliminating a division of its business, instead it is converting its service business model with its contracted service providers to a true independent model. Therefore, FXG is further limited in providing support to the contracted service provider during its conversion and may prove to be challenging to that contractor. The dilemma for both sides is how to maintain service during and after the conversion without compromising the independent contractor relationship and without jeopardizing its standards of quality service. However, like all things in business there is a reason for change developed from a strategy. It is the strategy of the FXG ISP transition to convert smaller CSP contractors with larger ISP contractors in fact to continue as a contractor with FXG, the ISP business is required to have at least a min of 5 (PSA’s) or 500 stops (some stations may require less). Other strategies for the transition are overlapping, new termed service agreements, and new compensation standards by negotiations.

As a result, these changes now place the burden on the contractor to buy in/ sell out/ or overlap with Ground/HD and/or with other contractors in order to keep their businesses. Yes, a workbook is provided to all contractors by FXG for a step by step “How To” for the ISP transition but with such an enormous undertaking of the ISP transition a contractor needs more than just deadlines, new procedures and new operational requirements; a contractor needs assistance, education and a Strategy of its own!

Vital Strategies for Surviving the ISP Transition

www.yourisphelpguy.com

A strategy is defined as “a careful plan or method of achieving a particular goal usually over a long period of time” or a strategy is defined as “the art of planning and directing overall military operations and movements in a war or battle” both of which consist of strategic planning and strategic thinking in order to achieve that goal. Q: Why is strategic planning and thinking important for a contractor? A: It provides a blueprint to provide the best path for the biggest business

decision as a contractor with FXG. FXG and ISP transition both use the ideology for the definition of the word strategy with contractors by (1) achieving a total transition of the contractor with a period of up to 9 months and (2) using the methods of military style “battle” techniques for negotiating with the contractor for the best outcome. As a contractor with FXG it may at times feel unfair with such strategy by a large corporation BUT the contractor has the ability to strategize to its best outcome as well by using these same strategies. Q: How can a contractor be ready for the transition and negotiations? A: Planning, Preparing, and Processing for the transition and understanding its business operations by means of Strategic Planning and Strategic Thinking.

Strategic Planning will help the contractor sift through all transition deadlines and requirements to setup immediate goals for the ISP transition, including reviewing the ISP transitional workbook provided by FXG. This is also the time to begin seeking assistance from an outside source or consultant with knowledge of how the changes will affect the current business model as a CSP and to help the contractor with its biggest decision on whether to move forward with the ISP transition or to leave it behind and sell. Here are some steps that a contractor should consider in the strategic planning:

1. Outline the Goals for the business, Resources and need for Support 2. Identify if the business will go through the transition or make preparations to sell the business 3. Begin early preparations for the transition by:

a. Timeline, it is important to get started immediately b. Settlement collection for what will and what will

not be included in the ISP c. Revenue and Cost Analysis for the business for

year one, two or three post ISP

Vital Strategies for Surviving the ISP Transition

www.yourisphelpguy.com

Strategic Thinking will help the contractor by using a thinking process for success that will be applied to negotiations for the contractor and FXG. It is this thought process in foreseeing a successful bid through FXG’s negotiations in transiting from the CSP model to the ISP model. Although FXG provides a workbook and the online tools to achieve a successful negotiated transition, it is best for the contractor to seek out others for a more collaborative “think tank” for the best and “not so good” case scenario when negotiating the ISP transition:

1. Identify scenarios for the most important step of the ISP transition Negotiations!

a. What is the best case for the contractor’s negotiations? How much more can a contractor make?

b. What is the worst case for the contractor’s negotiations? Will a contractor make the same amount as pervious years? How will it affect the bottom line and cash flow?

2. What happens if the business grows before, during and after the ISP transition? 3. Identify the value of the business before and after the ISP transition and how will it affect the ability

to sell the business in the future. Remember the goal for FXG is to convert all CSP model

contractors to the ISP model by May 2020 and it is the

intention of this conversion to create the following:

New Service Agreements with one-three (or more in

some districts) terms

Set a pattern of overlapping an area for HD and Ground

eventually to be required)

Create a bidding process for contractors to negotiate its

compensation for their service areas

Vital Strategies for Surviving the ISP Transition

www.yourisphelpguy.com

So, how do you survive the ISP and its various

strategies…first get reacquainted with your

operations as if it’s a new business and reconnect

to all aspects of its business activities contracting

with FXG. Next, know your strategist on the other

side (FXG) as they will know all about your

business. Prepare and plan for various scenarios

and situations of service expectations before and after the ISP transition because it will affect your business

future with FXG. More importantly when negotiating with FXG on its final step to the transition… Know your

Numbers!!! I strongly express to really…really…really know your numbers because it is the strategy of FXG to offer

a competitive market value for your service as a contractor and that my friend will not be the “numbers” or value that

is not how you want to end your negotiations.

In the silver lining of all things in life, you have a major advantage with

the FXG strategist, your own professional and experienced strategist

working with you throughout the entire ISP conversion. Marcello

Gonzalez is YourIspHelpGuy.com and has been helping contractors with

FXG for over 15 years and empowering contractors against all obstacles

that have plagued contractors with new addendums, compliances, and

corporation set ups. I have been educating contractors on the corporate

structures and tax requirements for this structures not only with the IRS

but on a state level as well. FXG has necessitated the levels of understanding that were not required in the past as

a FXG contractor by adding more and more state and federal requirements including internal FXG audits for payroll

and corporate status compliances.

The ISP transition is the final straw in the “test of knowledge” of the past years changes into a massive conversion

that has left many faced with a reality of their future business status as a FXG contractor. I have developed the

services of YourIspHelpGuy.com to offer contractors an option for assistance during the ISP transition not just with

negotiations but with all areas of the conversion. I will help answer those “What if’s” or “How will I” or “What to do”

questions because you not only deserve to keep your business with FXG and to keep your hardworking operations

as well as the people that depend on you for employment…you deserve a strategist!

Contact us at: yourisphelpguy@yahoo.com or call/text 281-827-5664 * Marcello Gonzalez *For more information or a personal consultation I am also available to do presentations for groups. (Minimum of 5 attendants).