Now that 2015 is complete, what is your distribution strategy?
Hopefully 2015 was a prosperous and successful year for your company! With success come decisions (and the tax man). What are your plans for distributions (for Sub-S companies)? Surety underwriters generally assume contractors will distribute enough funds to cover paying taxes on their profits for the year. After that, communication and planning are key. Talk with your surety advisor, CPA and financial planner to come up with a plan that keeps your company on solid ground.
What are your goals for 2016?
Do you have a company goal that includes growing in the New Year? Growth and change requires planning. You will not only have to address equipment and staffing but also credit arrangements and surety bond capacity. Are you comfortable your financial situation supports your credit and bond needs required for your planned growth?
What has to happen for you to reach your goals?
The theme of this article is planning. In order for you to reach your goals, you first need to decide what your goals are and then come up with a plan that will allow you to successfully achieve those goals. Meet with your management team to discuss equipment and staffing needs. Talk with your banker, surety advisor and CPA to plan for your credit and surety needs and find out what needs to happen to meet those needs. Your CPA can help with a tax strategy to keep Uncle Sam out of your pocket while also allowing your company to support its credit needs. Planning and teamwork between all your advisors is key.