CONSTRUCTION ENTITY STRUCTURE.
Most construction businesses pick an entity by default at startup and never revisit it. The structure that made sense at $500K in revenue has different consequences at $5M, because self-employment tax, the split between salary and distributions, and liability exposure all change as the business grows. The choice belongs with your CPA and your construction attorney, but the financial data that answers it has to come from clean books, and the structure you settle on has to still read well to a surety.
The question SPM hears most often is whether to convert an LLC to an S-Corp. There's no universal yes to that, because the answer depends on current revenue, the mix between salary and distributions, payroll tax exposure, and your CPA's read on the tax savings against the added administrative cost. It is a financial analysis with a dollar answer at the end of it. What SPM does is make sure the numbers going into that analysis are right, and that whatever structure comes out of it still presents cleanly to a bonding agent.
WHAT IT MEANS.
Entity structure is the legal form your construction company operates under, LLC, S-Corporation, or C-Corporation, and it affects taxes, liability protection, bonding capacity, banking relationships, and your ability to bring in partners or sell the business.
The tax answer and the bonding answer aren't always the same answer. Sureties evaluate the financial strength of the bonded entity specifically, so a structure built purely around tax efficiency can leave an underwriter unable to see the whole business. That's a solvable problem, but it has to be solved on purpose rather than discovered at renewal.
WHERE ENTITY CHOICE GOES SIDEWAYS.
You chose the structure without knowing the financial consequences
Most construction businesses start as sole proprietorships or LLCs by default, because that's what the filing service put in front of the owner. The structure that made sense at $500K in revenue has different implications at $5M, since self-employment taxes, the split between distributions and salary, and liability protection all move as the business grows. The entity you have may not be the one that serves you best now.
Entity structure and bonding can conflict
Sureties evaluate the financial strength of the bonded entity, and only that entity. If you operate through several entities without a well built holding arrangement, bonding agents can struggle to read your true financial position at all. The structure that's optimal for taxes may not present the strongest financial profile for bonding, and both of those are real constraints.
You don't know whether you should convert
The most common entity question SPM gets is whether to convert an LLC to an S-Corp. The answer depends on current revenue, the mix between salary and distributions, payroll tax exposure, and your CPA's analysis of the tax savings against the administrative cost of the election. The election pays for itself only when distributions outrun the payroll and filing burden, so $2M and $8M get different answers.
WHAT EACH STRUCTURE DOES.
A single member LLC is a pass-through entity, so all profits and losses flow through to your personal return. It's simple to maintain, requires no corporate formalities, and provides liability protection. At lower revenue the primary downside is self-employment tax on all net income, because there's no distinction between salary and distributions and the whole net number is exposed to it.
An S-Corp election, applied to an LLC or a corporation, lets you split compensation between salary, which comes with payroll taxes, and distributions, which don't come with self-employment tax. The savings can be significant at higher revenue, but the election requires a reasonable salary the IRS will accept, real payroll, and more administrative overhead. Coordinate the decision with your CPA, because the breakeven revenue where the S-Corp saves more than it costs moves with the situation.
SPM doesn't provide tax or legal advice, and entity structure decisions belong with your CPA and your construction attorney. What SPM does is make sure the financial management systems work correctly inside whatever structure you operate, including multi-entity setups with equipment LLCs, operating companies, and holding entities. We also make sure the financial presentation to your surety reflects that structure correctly rather than obscuring it.
FLAT MONTHLY FEE. NO SURPRISES.
Three tiers, priced by your trailing twelve month revenue. Which one you're in depends on how much of the work you want off your desk. No hourly billing. No payroll. The one-time onboarding fee is right here in the table.
| Last 12 months revenue | Monthly fee | One-time onboarding |
|---|---|---|
| Under $1M | $1,900 to $3,300 | $1,000 |
| $1M to $3.5M | $2,600 to $5,300 | $1,500 |
| $3.5M to $6.5M | $3,800 to $8,300 | $3,000 |
| $6.5M to $9.5M | $5,100 to $11,800 | $4,500 |
| $9.5M to $12.5M | $6,100 to $14,900 | $6,000 |
| $12.5M to $15.5M | $7,400 to $17,650 | $7,500 |
| $15.5M to $18.5M | $9,400 to $22,400 | $9,000 |
| $18.5M+ | Quoted individually | Quoted individually |
The onboarding fee covers migrating your books back to the start of your last taxable year and getting you fully operational in 60 days. It's billed once, with your first invoice. It's the same for all three tiers. Your first month is prorated, and your monthly engagement starts on the first of the first full month.
Range reflects the three tiers below. Which one you're in depends on how much of the work you want off your desk. No payroll. No hidden line items. The onboarding fee is right here in the table.
You stop guessing.
You get the CFO work. Job costing built against the way you estimate, a 13 week cash forecast, monthly WIP, and a meeting every month that ends in decisions and never in a report.
Your bookkeeper still does the books.
Every job shows its margin while it is still open.
Everything in Core, plus the bookkeeping and bank reconciliations done for you, and the job costing and WIP software set up, loaded with your cost codes, and managed every month. Use your own online software, or move to ours and we cover it.
A bookkeeper we choose does the books and reconciliations. No payroll.
You approve, and the money side gets handled.
Everything in Strategic, plus a controller we choose who handles your bills and receivables for you the way an in-house controller would. They call vendors, pay the bills and keep the accounting current. We plan the cash flow first, and you approve every payment because it is your money.
A controller we choose does the payables and receivables. No payroll, no pay applications, no collections.
FREQUENTLY ASKED.
