December tends to be slower for most contractors. Work is wrapping up, the holidays are coming, and it's easy to coast through the last few weeks and slide into January without having looked at how the year actually went or what needs to change.
Here's a checklist of things worth reviewing before the calendar flips. None of it takes a full day. Some of it takes 20 minutes and can meaningfully affect how next year goes.
Insurance renewals
Most commercial insurance policies renew annually, and December through February is renewal season for a lot of contractors who set up coverage at the start of the year. Don't let a renewal auto-process without reviewing it.
Call your agent and ask three questions: Are my coverage limits still appropriate for my current revenue? Are my classification codes still accurate for the work I'm actually doing? And can we shop this to see if there's a better rate without sacrificing coverage?
A 20-minute phone call with your agent can save you several hundred dollars a year and make sure you're not underinsured going into the next season.
Pricing review
When did you last raise your rates? If the answer is more than 18 months ago, they probably need to go up. Material costs, fuel, insurance, and labor have all moved. Your rates need to reflect that.
Calculate your overhead rate per hour (as covered in the overhead article) using your actual expenses from this year. Compare it to what you assumed when you set your rates. If your overhead has grown but your rates haven't, you're effectively making less than you were.
A 5–8% rate increase once a year is normal, defensible, and almost never costs you the clients worth keeping.
Equipment review
Go through your equipment list and ask two questions about each piece: Is it costing more to maintain than it's worth to keep? And is there something I consistently need that I don't have?
The first question is about aging equipment where repair costs are climbing. There's usually a point where continued investment in an old machine stops making sense — and December, with Section 179 deductions still available for the tax year, is sometimes the right time to make that call on a replacement.
The second question is about capacity constraints. Were there jobs you couldn't take or had to turn down because of an equipment gap? Was there a piece of rental equipment you needed so consistently that ownership would have penciled?
Tax preparation
Get your records to your CPA or bookkeeper in January, not April. The earlier you have your financial picture together, the more options you have for year-end strategies — additional retirement contributions, equipment purchases under Section 179, timing of income or expenses where you have flexibility.
1099 forms for any subcontractor you paid $600 or more during the year must be filed by January 31. Make sure you have current W-9s from every sub you used and get those 1099s prepared on time. Late filing penalties are real and avoidable.
License and bond renewal
Check your contractor license expiration date and your surety bond renewal if applicable. These are the kinds of administrative details that get missed when you're heads-down in fieldwork, and an expired license creates problems on jobs that require proof of current licensure.
The one financial number to calculate in December
Your average actual job margin for the year. Not your estimated margin — your actual margin, calculated from real costs on real jobs. If you've been tracking job costs, this is a summary calculation. If you haven't, it's a good argument for why you should start next year.
Compare it to what you thought you were running at. If there's a gap — and there usually is — the December review is where you find it and decide what changes next year. Better estimating, tighter overhead management, higher rates, or better job selection.
The contractors who keep getting better over time are the ones who look at the numbers honestly at the end of each year and use what they find. The ones who stay flat are the ones who move from December into January without asking how the year actually went.
Take the time. It's worth it.
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This isn't tax or legal advice. Talk to a CPA for guidance specific to your situation and business.