As we approach the end of the year, it’s important to take a step back and reflect on what you’ve accomplished so far and where you want to go. Here’s five business tips that will help set you and your business up for success.
With Halloween and the midterm elections behind us, it’s important to take a step back and reflect on what you’ve accomplished so far and where you want to go. While many people focus on holiday celebrations and new year’s resolutions this time of year, business owners also need to focus on your year-end business planning. This includes both preparing for the new year, AND taking stock of the past year. Things like taking stock, preparation, and planning are key to running a successful business.
So whether you’re an entrepreneur just starting out or someone who’s been in business for a while, these tips will help get your business moving in the right direction. After all, you get what you measure. And, what you measure is what you can improve. This review helps you realign goals and resources so you can take advantage of new opportunities.
Here’s five business tips you can apply now that will help you achieve your goals for next year.
Prepare Key Financial Documents
Financial documents play a crucial role in your company. And, you’ll want to do this because reviewing your financial documents gives you three benefits:
- It shows you whether you’re running a healthy business or if you need some belt-tightening going forward. Your financials provide a guide to your company’s financial position and health, and should include details about your assets and liabilities, profit and expenses, and cash flow.
- If you do need some adjustment say, fewer expenses, your financials show you where adjustments are needed and tell you how much you need to adjust.
- If you’re in the market for funding, expansion, or possible an acquisition, financial documents are often required to let interested parties see the financial state of your business.
So, here’s the financial documents you need before year-end are:
- A balance sheet, showing all the assets, liabilities, and equity;
- An income statement, showing revenues, expenses, and profits; and
- A cash flow statement, showing opening and closing cash within a specific period, with inflows and outflows.
And, while all three of these are important, it’s the cash flow statement that is not only the least understood, but also the most important statement. We know cash is king. In fact you can run a business at a loss for along long time so long as you have sufficient cash flow. It’s that important.
Business owners should keep these statements on a monthly or at least a quarterly basis. And, there a couple of reasons for this. You want to know the state of your business consistently, so you can plan accordingly. If you want to expand, you need to know you can, for instance. If your business is starting to show red ink, you want to know as soon as possible, so good financial reporting serves as an early warning system for your company.
Get Your Tax Documents Together
While the end of the year may not be tax season, it’s a good idea to get your tax documents together as well. The financial reports you prepared in the previous step should help you ensure you get all of the deductions your business is entitled to.
You should also compile your income, both business and personal, if relevant. Gather all your deductions. And, this is where we talk about keeping all those receipts.
Assess Your Business Goals
If you had a specific goals list for this year, pull it out and go over it. If you didn’t, write down what your unwritten goals were (and consider a written list for next year). Review your goals systematically and assess them using the following questions:
- Were your goals achieved? Why or why not?
- If they were exceeded, what strategies did you employ?
- What are the next steps? (Do you want to use higher than anticipated revenue to expand, for example, or make debt payments?)
- If they fell short, why? How?
- What are the next steps? (Do you need to pull back on your product line, for example? Pare down your forecasts? Lower prices?)
Goal assessment is so important, yet so many business owners just seem to gloss over it, and that’s a huge mistake.
Plan Employee Morale Events
Another great way to wrap up the year is to plan morale events for employees. Yep, you read that right!
Not a financial tip, but it is a solid business tip to not forget your employees in your year-end planning. They’re an important ingredient in your business success.
There’s a lot of discussion right now about employee retention. Not only that, but the year-end holiday season provides multiple opportunities to reward them for what they’ve done. As a business owner, you want to boost morale and company loyalty.
Consider what your employees might value: A big holiday party? More time with their family over the holidays? If so, maybe you swing extra days off for everybody. Maybe they’d like flexible time to shop? You could you give flex hours so they avoid the huge crushes in stores. Or even think about scheduling some paid time to conduct a drive for charity.
Plan Your Own Vacation
All too often, business owners put off their own vacation until the year is totally over! Everybody needs some time to recharge and relax. Plan a vacation or think through your time off before the year is out.
With your business needs and goals clearly visible, your planning will be less time-consuming and more convenient. And, getting these important items taken care of early will help set you and your business up for success in the new year.
If you’ve got questions about assessing your goals, applying these tips or strategically thinking about your business, let’s talk.