How to create a valet parking empire and avoid Obamacare obligations. (Maybe.)

The managers are your people. The valets are employed by a separate trust at each different account.

There might be a workaround to Obamacare for companies with more than 50 full-time equivalent employees. Here are my thoughts on it.

There might be a workaround to Obamacare for companies with more than 50 full-time equivalent employees. Here are my thoughts on it.

As you ponder the building out of your valet parking empire, the thought might occur to you that you could just set-up multiple different companies to avoid the Obamacare health care mandates. That's definitely not going to work.

When the "Patient Protection and Affordable Care Act" was created, lawmakers saw to it that there was no easily obvious way to skirt around the requirements. However, I do believe there is a workaround. 

It's a bit radical.

And I'm going to lump this in with my belief that valet workers should be cultivated to stay for the long-term.

  1. First, a management company is established.
     
  2. The management company will lead and manage individual "valet company trusts" or "employee trusts."
     
  3. You go for one major hotel account, minimum 250 rooms with 75% average occupancy (i.e. a busy place!).

    This will be your manager factory, and where you prove the concept.
     
  4. A trust is set-up by the management company from the very beginning. The valet parking contract is awarded to the trust.
     
  5. A third party trustee is assigned who ensures that a lucrative management contract is awarded from the trust to the valet management company (you)… which includes a guaranteed minimum and performance bonuses.
     
  6. The valet employees for one particular hotel are employed by the trust. The manager of the hotel's valet business unit is employed by the separate management company (you). 
     
  7. The employees are the beneficiaries of the trust, where surplus profits beyond the needs of the business are distributed to qualified employees on a quarterly basis. The formula could be by hours worked, or by position, or by a mixture of the two. (For example a supervisor could be entitled to a larger percentage.)

So the management company (you and your team of managers) is hired by the trust (the entity you set-up to be awarded the valet contract for this one property). You get a guaranteed management fee with performance bonuses. 

Your managers and the valet workers are two completely separate things. 

I would endorse the method of there being a no-tipping model, where the valet tip is built into the parking fee. The valets get their wage plus their portion of the weekly parking revenue, which is divided by the number of hours they worked that week.

With this method, all valet workers earn the same hourly pay, whether they worked on a slow Monday night or a busy Sunday morning. So wage fairness is built in. Nobody is going to be upset about being scheduled for the crappy shifts where there is no money.

So the hotel gets their percentage, you get your management fee, the workers get their hourly pay plus their piece of the parking action, and the rest of the money is for insurance, uniforms, and other ordinary business expenses.

Since the valets are now stakeholders, they will be motivated to be extremely careful with the cars. If they try harder and are more careful, this means fewer claims, which means more money in their quarterly bonus, since the valet operation will have lower costs and more surplus profits beyond what the hotel gets and what your management company gets. 

They will be motivated to provide the highest level of service, so that guests will return and spread positive word-of-mouth about their experience at the hotel. The valet workers will become "super servers" aiming to please the guests as best as they possibly can. Because the greater the number of happy customers there are, the greater the chances that the hotel will be a busier place in the future.

And if the hotel is busy with guests, that means more cars to park, which means more parking revenue for them to get a slice of, and even greater possible quarterly bonuses.

With this approach, everyone's interests are aligned.

Your management company, the valet workers, and the hotel all want the hotel to be the greatest success it can be, with all customers receiving the very best care and attention possible.

From this first account, this could be where you find your next star manager. You find that star and succeed in lining-up the next account. 

You set up a separate trust just for valet parking operation #2. The trust gets the contract. Your management company gets hired by the trust to oversee and run the valet operation for the benefit of this employee trust. After you have 50 full-time equivalent employees made up of unit managers and support staff, you're on the hook for those healthcare obligations, but just for your people, not the valet workers in the different trusts you set up. Those are separate entities.

Meanwhile, since you were choosy with which accounts to pursue, each individual separate employee trust is rolling along, and the workers are staying on the job because their job is actually something special, where they really do get a piece of the pie, as long as there is a pie to divide... (and there should be a piece because of the hard and diligent work they put in.)

These valet workers should rise to become serious, professional valets. They are going to be very serious about having a good team and doing the job right.

This is a complicated approach, but I think it can work. What do you think? Leave me a comment below.