Year-end Steps Business Owners Need to Take to Ensure Success | Innovate New Albany | New Albany, Ohio
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Year-end Steps Business Owners Need to Take to Ensure Success

Year-end Steps Business Owners Need to Take to Ensure Success

With the typical rush of the holiday season, the final two months of the year are always busy and challenging. For business owners, the anxiety level is compounded further with a host of additional stressors –

  • Will we make a profit this year?
  • Can we close our pipeline sales before year-end?
  • Will employee retention be a problem?
  • What issues need my attention at this time of the year?
  • What should I be doing to ensure success next year?

Well, have no fear because Mr. Biz is here to help! Take a deep breath, grab your coffee, and read the checklist that follows to help ease your tension level.

Financial Tasks – these will ensure you are optimizing your company’s financial well-being

  1. Review financial statements – pay particular attention to comparisons to the prior year (2016, in this case), prior year quarter (4th quarter of 2016), and prior quarter (3rd quarter of 2017)
    1. Balance sheet – summary of business health at a point in time
    2. Income statement – are you profitable . . . or not?
    3. Cash Flow – shows you the net change in cash and where the money went
      1. Operating – revenue and expenses
      2. Investing – assets purchased and sold
      3. Financing – loans and repayments
  2. Review Key Performance Indicators (KPIs) – these measures should be regularly reviewed and, if selected properly, demonstrate how and why your business is growing
  3. Review pricing – this, too, should be regularly reviewed but is critical to ensure your products and services are being sold at profitable levels; despite owners’ confidence, this is almost always an area that needs additional expertise and attention
  4. Work Accounts Receivable
    1. Sort in descending order to target the largest balances first
    2. Push to close past due accounts before year-end; would it be worth offering a discount in order to get cash in the door and close out the account?
    3. Consider sending aged balances to a collection agency
  5. Prepare for taxes
    1. Calculate 4Q estimated payment and ensure it is received by the IRS no later than January 15th
    2. Schedule a January appointment with your tax advisor
      1. Beat the rush and get on the calendar now
      2. This will also give you a deadline against which you can plan your tax-related “To Do” list
    3. Consider ways to reduce tax burden (always consult your tax advisor for guidance specific to your business) – for example:
      1. Taking advantage of year-end sales to buy needed equipment
      2. Writing down unsellable inventory
      3. Paying outstanding Accounts Payable
      4. Making a charitable donation
      5. Deferring revenue, if possible
  6. If you sell products, take inventory – consider a year-end sale to boost sales and reduce inventory

Operational Tasks – these items keep the wheels on the road and your doors open

  1. Review insurance policies
    1. Consider new coverages for changes in your business
    2. Do you need to increase coverage to account for business growth?
    3. In a nutshell, ensure you do not have any uninsured risks
  2. Review and update your technology
    1. If you need to update hardware or software, take advantage of year-end sales
    2. Ensure your cyber security is up-to-date with the latest developments
  3. Back-up all of your critical data – this should be done regularly but especially at year-end
  4. Check your website
    1. Test all links and functionality
    2. Update information, as necessary
    3. Renew or update your security certificate

Human Resource Tasks – these tasks will place the proper emphasis on employees

  1. Complete performance reviews for every employee – feedback, both positive and constructive, is critical to continued employee development and, therefore, your company’s future success
  2. Check your payroll details
    1. Ensure you include often forgotten items such as taxable fringe benefits – for example, sick pay or car allowances
    2. Corrections are cheaper to make in December vs. early next year
  3. Administer an anonymous employee survey
    1. If you want honest feedback, and that is the only feedback that matters, it must be anonymous
    2. Gives your employees an opportunity to provide feedback and have a voice
    3. Consistent negative feedback can be a leading indicator of ensuing employee retention problems
    4. Information can help shape new programs and changes for next year
  4. Plan employee recognition
    1. Will you pay bonuses or provide profit sharing?
    2. Consider a holiday party or year-end celebration
    3. Be creative – provide annual awards, grant comp time, deliver verbal recognition, etc.
    4. Celebrate successes!

Strategic Tasks – these will take your company to the next level!

  1. Establish goals for next year – make the goals measurable; track them directly and with KPIs throughout the year; don’t forget to STRETCH!
    1. Financial
    2. Operational
    3. Human Resources
  2. Use the established goals to create a financial budget
    1. Utilize trends from this year and known upcoming changes
    2. Assess staffing needs to accomplish established goals
  3. Create action plans that will ensure you accomplish your goals and budget – a great man once said, “Failing to plan is planning to fail!”
    1. Make the actions specific and transparent
    2. Assign an owner to each action

Year-end can certainly be a daunting hurdle to clear for every business owner. However, if you follow this checklist, you will start the new year with a detailed plan for success!

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