Presenting our end-of-year business planning tips to position you for success in 2020.
Consider attending to these matters for a profitable new year:
Small Business End-of-Year Checklist
Making New Year’s resolutions is easy, but keeping them can be difficult.
Organizing your resolutions into a to-do list and scheduling specific actions can help you follow through on your commitment. Here are 8 year-end small business action items to help you stay on track:
1. Meeting With Your Accountant
The end of the year is a great time to review your financial performance over the past 12 months to improve your results going forward. A thorough financial review involves 3 steps:
- Assembling key end-of-year reports for your small business, including your profit-and-loss statement (income statement), cash-flow statement and balance sheet
- Analyzing the data in your reports for key trends, such as whether your business was profitable, whether your cash flow is sufficient to sustain operations and whether your assets offset your liabilities
- Planning how to improve your results by taking steps such as increasing your sales revenue, cutting costs or paying off business debt
To get the most out of your review, schedule a review with your accountant so they can help you analyze your financial statements and identify which actions would be most beneficial to improve your performance. You might also ask them to schedule ongoing reports for you on a weekly, monthly or quarterly basis so that you can keep on top of your financial performance throughout the year.
2. Taking Care of End-of-Year Business Tax Planning
The end of the year is the time to start getting ready for your annual tax filings as well as devising ways to improve your tax strategy in the coming year. Items that need attention include:
- Providing employees and contractors with required W-2 and 1099-MISC reports before the Jan. 31 deadline
- Checking that your estimated tax payments over the past year remained consistent with your actual revenue and tax obligations
- Verifying you’re claiming all applicable tax deductions
- Reviewing whether restructuring your company’s corporate structure could reduce your tax obligations
Your tax adviser can provide you with guidance on handling these issues. Scheduling a meeting with your tax professional should be an action item on your year-end checklist.
3. Counting Your Inventory
Part of preparing your year-end financial and tax statements includes counting the assets in your inventory.
To organize your inventory count:
- For accuracy, try to schedule your count when items are moving slowly and you temporarily can suspend shipping and receiving
- Divide your inventory storage area into zones and assign pairs of workers to each zone, with one employee assigned to count items and the other assigned to record counts
- Isolate items that need to be counted separately from regular inventory, such as damaged or outdated items
- Count items that move slowly and reserve stock before starting your regular inventory count
- As workers count items, have them tag sections that already are counted and record a list of sections that have been completed
- To double-check accuracy, have another team of workers or a supervisor do a full or sample count of areas that have already been counted
To save time on your next annual inventory count, consider using inventory automation tools. For instance, connecting your point-of-sale barcode scanning system to inventory-management and accounting software can help you stay current with real-time inventory updates.
4. Developing a Business Plan Revision
Updating your business plan at the end of the year — or creating one if you don’t have one — can put you in a position for better results in the coming year. The Small Business Administration recommends that a business plan should traditionally include:
- An executive summary providing a brief overview of the highlights of your plan
- A description of your company, its mission and its competitive advantages
- An analysis of your market and how you plan to position yourself against competitors
- An outline of your company’s organizational and management structure
- A description of your product and service lines
- An explanation of your marketing and sales strategy
- Financial projections, including key financial statements
- If you have financing needs, a funding request
If you need help developing your business plan, the SCORE Association provides access to a national network of experienced business mentors as well as business plan templates and other online resources.
5. Revising Your Marketing Plan
If you want to generate more revenue in the coming year, a good place to start is by improving your marketing plan. Consider questions such as:
- Are you pursuing measurable marketing goals, such as increasing your number of leads generated a week, number of social media followers or number of email subscribers?
- Is your company’s marketing plan based on market research rather than intuition or guesswork?
- Is your marketing message positioning your brand to stand out from competitors?
- Are the marketing channels you’re using the most effective ones to reach your target audience?
- Are you creating enough digital conduct to market yourself online?
- Are you conducting an end-of-year review of comments on your social media profiles to gain feedback from your target market?
- Is your website capturing enough leads from your online marketing campaigns?
- Are you doing follow-up marketing to email and social media subscribers?
- Are you cultivating repeat business from existing customers?
- Are you making efforts to win back inactive past customers?
- Are you tracking your marketing performance so you can identify underperforming areas and make adjustments and improvements?
- Are you using marketing automation tools to increase your efficiency?
If you need help developing an effective marketing plan, consider hiring a marketing agency to assist you.
6. Improving Your Sales Strategy
Marketing needs support from sales to convert leads into revenue. To give your sales strategy a performance lift in the coming year, consider these questions:
- Is your sales team using a standard operating procedure to generate leads, set appointments and close sales?
- Are your sales representatives using sales scripts for each phase of the sales process?
- Is your team generating enough leads and setting enough appointments to reach your sales and revenue targets?
- Are your representatives following up on sales opportunities that failed to close the first time?
- Are you taking steps to generate repeat sales, cross-sells and upsells?
- Are you cultivating referrals?
- Are you making efficient use of sales automation tools?
- Are you tracking your sales performance?
If you’re underperforming in any of these areas, consider seeking professional sales training for your sales personnel.
7. Considering Technology Upgrades
If you’re looking to increase sales or cut costs in the coming year, upgrading your technology can be a way to increase your efficiency and improve results. Conducting a year-end review of your business processes and use of technology can help identify areas that could benefit from upgrades.
Tech Upgrades Worth Considering
- Migrating your information-technology (IT) infrastructure to the cloud
- Tracking your business performance with analytics software
- Adopting a cloud-based accounting software application
- Using an automated marketing platform
- Making your website mobile-friendly
- Adopting customer-relationship-management (CRM) software (And, hey, some are free.)
- Improving your customer service by adopting automated tools such as chatbots and interactive voice response (IVR) telephone systems
- Strengthening your IT security
Depending on your business model, you may be able to identify other areas that are candidates for upgrading.
8. Reviewing Hiring and Outsourcing Options
Another way to improve efficiency is to review your human-resources strategy to see whether any personnel changes might help your business.
Consider whether you could improve your efficiency by:
- Hiring new part-time or full-time staff to manage specialized tasks such as administration, accounting, marketing or sales
- Outsourcing routine or specialized tasks that are peripheral to your company’s core skill set
- Downsizing your staff through automation or outsourcing to cut payroll costs
Systematically reviewing all your staff positions and business functions can help you identify which of these strategies might best benefit your business.