CoatingsPro Magazine

NOV 2018

CoatingsPro offers an in-depth look at coatings based on case studies, successful business operation, new products, industry news, and the safe and profitable use of coatings and equipment.

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Page 19 of 76

COATINGSPRO NOVEMBER 2018 19 Building the Next Layer Aside from ling the proper paper- work with the state to form the entity and ensure compliance with regula- tions, the next priority on the list is to ensure that the employees are properly classied (e.g., W-2 employees or independent contractors) for tax purposes. According to the Internal Revenue Service (IRS), this step is vital for small businesses because the classi- cation determines whether or not the business owner needs to withhold taxes. Improper classication can lead to hefty nes from the IRS. Another necessary layer of protec- tion involves insurance. Especially for a construction business, having the right level of insurance coverage can mean the di erence between closing up shop within the rst few years or being part of the 35 percent of businesses that are still around in ve years. Some standard insurance policies include: • Builder's Risk • Umbrella • General Liability • Commercial Liability • Surety Bond Še premiums for insurance can vary, but the umbrella policy premium by itself can run around $500 to $3,000 annually. Learning From the Failures W hile it may seem a bit disheartening that almost 70 percent of new construc- tion companies fail before the ve-year mark, there are also certainly lessons that can be learned from those who did not pass the test of time. Reasons for failure include: 1. Poor planning. As Benjamin Franklin famously said, "If you fail to plan, then you plan to fail." Any business, but especially those in the construc- tion industry, can fail if there is not sufficient planning. Every success- ful building company has a strong business plan as its foundation. 2. Too little money. The average amount of initial capital needed to start a new business is roughly $30,000. For a construction company, that amount can jump to more than $50,000. One of the main reasons that many construction businesses do not make it to five years is that there is not enough start-up money. Obviously, someone providing a small piece of the overall construction puzzle may be able to start with less capital. Initial start-up costs often surpass the original plans because labor, admin- istrative, and other costs may exceed expectations. Money Matters ^^^JSLTJVPUK\Z[YPLZJVT Heavy-duty construction offers superior protection without sacrificing comfort and mobility. Available for use with a high-pressure compressed-air supply or a low-pressure ambient-air pump. Rugged Reliable Comfortable Re ad e r In qui r y at co ati n g sp ro m a m /i n q1118

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