Steps you can take to secure your business in the New Year
While, for the most part, businesses operating in the construction and real estate industry made it through the COVID-19 pandemic relatively unscathed, we know that a new year could mean new (and unexpected) challenges. This is why we believe it’s more important than ever to take steps to safeguard your business, such as freeing up cash, minimizing your tax burden, and ensuring that the proper policies and procedures are in place to secure your long-term financial wellness. This article will outline 7 steps you can take today to secure business success in the New Year. For additional insight, reach out to Rea & Associates construction and real estate services team.
#1: Understand Your Tax Incentives
The Tax Cuts and Jobs Act (TCJA) has impacted the real estate industry in a few different ways over the last few years. As you prepare to file your 2020 tax returns, it’s essential to understand your business’s appropriate tax incentives. Consult with Rea & Associates and read our blog, “Tax Incentives Still Exist For Those In Real Estate,” for more information.
#2: Make Sure Your Clients Can Pay
Before extending credit to a financially-strapped client, you need to make sure that your client has sufficient collateral to pay you back eventually. If you find yourself in this situation in 2021, we recommend conducting a field examination, commonly known as a field exam, before committing to lending out any money.
#3: Minimize Your Estate Tax Burden
Having an estate plan in place is a necessary step for all business owners, regardless of size. Estate plans exist to provide you and your loved ones with protection and peace in mind should the unthinkable happen. If you’re looking to set up an estate plan in 2021 to protect your assets and your family, consult with a CPA or a state and local tax expert,
#4: Optimize Your Space For Modern Consumers
The pandemic has revolutionized how many consumers shop. As a result, repurposing your retail space for a COVID-19 world is essential for long-term success. Instituting options such as “buy online, pick up in-store” can also go a long way in making your business more profitable and sustainable.
#5: Review Your Contracts
The New Year is the perfect time to review your long-standing contracts. Cybersecurity laws are always changing, and the truth is that you could be carrying more liability than you know.
#6: Understand The Impact Of The New Lease Accounting Standard
If you own or operate a business with the United States, a new U.S. Generally Accepted Accounting Principles (“GAAP”) may affect your leases. If you have questions on how this will impact your business, we recommend reading the article, “Deciphering The Impact of the New Lease Accounting Standard.”
#7: Calculate Your Financial Ratios
Financial ratios can help you understand your business’ value. Financial ratio analysis can help you understand your company’s profitability, efficiency, liquidity, and solvency. To read more about how you can use financial ratios to evaluate your business, click here.
Rea & Associates is here to help you prepare for the year ahead. To learn more about these topics and others, join Rea & Associates for our Construction Industry Kick-Off event on Friday, January 22, 2021, cosponsored by Overmyer Hall & Associates.
By: Doug Houser, Principal & Director of Construction & Real Estate Services