Regardless of whether you run a startup or a seasoned small business, the end of the year is a critical time to evaluate your operations and plan for next year. It’s understandable if you find yourself spread thin or behind on your task list during the holiday season. However, if you want to set yourself up for success in 2020, it’s helpful to make time for the following items.
1. Evaluate your business strategy
It can be tempting to spend more time planning the future than evaluating the past. But if you skip conducting a year-end review of your business strategy, you miss a valuable opportunity to learn from your mistakes, pivot and create a more powerful plan to support future growth.
As you evaluate the past year, review and update key performance metrics such as financial statements, website analytics, and customer retention and growth. Recognize your success and look for ways to replicate your wins. At the same time, don’t sugarcoat areas where you fell short. As you evaluate the big picture, it becomes easier to plan next year’s road map to success.
2. Assess your employee strategy and development
Strategically investing in your employees can help you attract and retain the best candidates. With the low unemployment rate, companies are still competing for talent — and the cost of turnover is not insignificant. According to studies from the Society for Human Resource Management, every time a business replaces a salaried employee, it costs six to nine months’ salary on average.
To help improve morale and reduce turnover, it’s important to evaluate your staff and identify how top performers will play a role in achieving your future goals. The end of the year is also a time to reward key employees with bonuses, which often strengthens loyalty and your team atmosphere.
3. Assess borrowing needs for the next year and plan accordingly
It’s valuable to identify your potential capital needs and determine when it makes sense to borrow. For example, if you anticipate heavy business during the holiday season, borrowing to stock up your inventory can help improve your profitability. As you evaluate your situation, also consider how you will fill short-term needs such as bridging a seasonal cash flow hiccup and long-term needs such as adding a new business location. To maximize your financing dollars, it’s helpful to meet with an experienced banker to discuss possible options.
4. Visit with your accountant before the last day of the year
Your accountant is a valuable resource in helping your business avoid financial missteps. The end of the year is an advantageous time to discuss tax implications from changes such as restructuring, hiring new employees and depreciation. It’s also an opportunity to learn about any tax law changes that may impact your business.
Consulting with your accountant can also put you on the right pathway for tax season. It is far easier to execute tax strategies on Dec. 15 than it is on April 15.
5. Evaluate needs for equipment upgrades and replacements
At the end of the year, it’s often easier to find the best prices on equipment as dealers clear inventory for the new year. Depending on your business income and tax strategy, there may also be tax benefits from making these purchases at the end of the year. It’s important to consult with your accountant to discuss your needs.
Don’t hesitate to act
Even if you’re late to the game, executing these steps will put your business in a stronger position in 2020. This month is the perfect time to analyze your business, identify growth opportunities and pivot for success.
Dan Brown is a business banking relationship manager for Zions Bank in East Idaho. To contact Dan, call 208-754-3053 or email email@example.com.