One Last Small Business Year-End To-Do: Take Stock
by Margot Carmichael Lester, Staples® Contributing Writer
The end of the year is a flurry of activity for most small business owners, and its easy to overlook or ignore a few tasks here and there in favor of another cup of cocoa or finalizing financials. One important task left to complete is a look back on your business year.
Year-end is a good time for a retrospective view and for looking forward, explains Tulsa, OK-based business coach Jean Cook with The Alternative Board. You have most of the current year behind you, which means that you have both the tangible data and the less tangible, but still important, perspective on how the year went. At the end of the year, apply what was learned to the planning for the next year.
Heres what you should include in your look back:
1. Goals: If you set goals for the year, review your progress against them. And if you didnt, create some! There's competition, regulatory matters and politics to navigate, but most of the stumbling blocks companies encounter are inside the organization, says Greg Bustin, CEO of Dallas-based Bustin & Co. and author of Accountability: The Key to Driving a High-Performance Culture. Developing practical solutions for replicating successes and fixing or eliminating problems should be the outcome of the review process.
2. Finances: Take stock of expenses and product/service revenue streams. Ask, What are my current business expenses? Are they all necessary? Might my money be more wisely invested with a different vendor or on different marketing strategies? suggests business and personal coach Lori Marcoux, co-founder of Extraordinary Learning in Seattle. I want to establish a reasonable budget for my next 12 months based on how I did working within my budget over the last 12 months, how much I spent and where I spent money on necessary and unnecessary line items. Its also important to review which products and services are producing the most revenue so you can decide where its most wise to focus your energy over the next 12 months.
Completely analyze your performance against all metrics in order to adequately plan in the upcoming year and next three years, says Kenneth LaRoe, CEO and chairman of First Green Bank in Mount Dora, FL. In a pinch, at least review key ratios, EBITDA, total sales and market penetration.
3. Operations: Analyzing processes and procedures helps create efficiencies and streamline operations. What patterns do you see in product/service delivery? What does customer feedback tell you about how you operate? Where can you improve productivity without sacrificing quality? Another component here is capacity review, Cook adds. Does the business have the capacity to cover the next years sales target? In manufacturing, this includes equipment capacity; in retail it could be shelf space or square footage; in services its employee available hours.
4. Marketing: Its crucial to understand the results you got from marketing spend. Did your customer base grow? How much business did you get from repeat customers? Which marketing tactics were most effective? Use analytics to determine how digital marketing efforts like social media, blogs and email newsletters or deals performed; and conduct an audit of your print marketing, too. Make note of whether or not there was a return, Marcoux says.
5. Time Management: Its vital to assess how many hours you spend on specific business-related activities to understand their value. I want to confirm Im creating a fulfilling experience and results I judge as positive, Marcoux says. I also want to evaluate whether or not Im allocating enough time toward self-care, self-reflection and social time with my people as well. Im much more effective in business when Im taking care of myself, when Im feeling fulfilled and energized.
Cook adds: Too many small business owners work in their business and dont spend enough time working on their business. Make a plan for segregating time and effort to work on strategy and planning. One day a month, a few hours a week, maybe thats 30 minutes every morning with coffee. Whatever will work, make the commitment to doing it.
6. Professional Development: Look back for places where you lacked the skill necessary to complete a key business task, or where a dearth of knowledge hindered performance, and seek out opportunities to learn. Knowing what you know and recognizing what you dont know is a sign of a good leader, Cook says. Be honest. You and your business will be better off if you seek advice, delegate or outsource for those areas that are not in your wheelhouse.
Once you assemble your feedback on the past year, set new goals for the year ahead and establish one or two action items to get you started on the path to achieving them. Make goals and tasks attainable, but aspirational.
Looking back at my business performance over the last year helps me see the bigger picture and understand what is possible to attain over the next 12 months, Marcoux says. I have an opportunity to learn from my past, hit the reset button, and practice even better, more effective and efficient behaviors going forward.