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Writer's pictureHoyt, Filippetti & Malaghan, LLC

Positioning Your Construction Business for Success


As the construction industry evolves, so must your approach to ensuring your business not only survives but thrives over time. By adopting forward-thinking strategies in areas like technology, financial planning, and leadership transitions, you can set your construction company on a path to sustained success. Here’s how:  


 Embrace Technology to Stay Ahead of the Curve  

Technology isn’t just an option in today’s construction industry – it’s a necessity.   

  • Start by evaluating and upgrading your current technology stack. Investing in modern Enterprise Resource Planning (ERP) systems can integrate various aspects of your business, from project management to financial tracking, making your operations more efficient and data-driven.  This may include integrating a separate application that works with your accounting software to assist with estimating, proposals, invoicing, etc. 

  • Project management software, tailored for field operations, can further enhance productivity and decision-making.   

  • Regularly reassess and adopt new technological tools to ensure your business remains competitive and agile. By adopting technology, you will be able to work more efficiently and likely service a greater number of customers. 

  

Optimize Your Tax Strategy for Better Financial Health  

Once you are confident in your technology stack, turn your attention to optimizing your tax strategy. Tax efficiency can significantly enhance your company’s cash flow and overall financial health.   

  • Effective tax planning. Planning is a cornerstone of financial stability. One method is considering revisiting your approach to long-term contracts. The tax code offers various methods for accounting for these contracts, and working with your tax advisor to select the most beneficial approach could significantly improve cash flow.  

  • Innovation. For companies involved in innovation, R&D tax credits are another opportunity not to be missed. Though current laws require these expenses to be capitalized over five years, proposed changes could allow immediate deductions, providing immediate financial benefits.  

  • Depreciation. Review your depreciation methods as bonus depreciation decreases to 60% in 2024. Comparing this with Section 179 depreciation options or weighing the benefits of a cost segregation study can help you decide the most advantageous route for your company.  


 Prepare for Leadership and Ownership Transitions  

Once your financial and technological strategies are in place, it’s time to focus on the future of your company’s leadership.   

  • Succession planning. Whether you opt for a buy-sell agreement, a gradual handover, or another strategy, having a clear plan in place ensures continuity and stability for your business.  

  • Estate Planning. The current lifetime estate tax exemption of $13,610,000 will expire at the end of 2025, making now the ideal time to utilize gifting or trusts to protect your assets and secure your legacy under the most favorable conditions.  


By prioritizing technology, fine-tuning your tax strategies, and preparing for leadership transitions, you position your construction company to not only meet today’s challenges but to thrive in the years ahead. These proactive measures are the building blocks of a resilient, future-ready business.  


If you have questions, contact HFM today. Our professionals are well versed on the latest issues to provide our clients with professional, personalized services.

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