End of Year Checklist for Businesses

Yes, It’s That Time Of Year Again. But This Year, Let’s Be A Little More Proactive. Intentions Are Great, But They Are Nothing Without Action.

First things first, get your financial house in order…

Reconcile ALL accounts

When I say all, I mean all. So often I will have a new client that tells me there are 3 bank accounts and that’s it. However, when the books are brought up to date, what I actually find is way different. Instead of 3 simple bank accounts there are actually 5 (the other two are just not used as much). On top of that, there were 3 credit cards and a line of credit. ALL of these must be accounted for correctly in your books.

So, Reconcile all accounts.  

The key is to verify that your books reflect what your bank says your ending balances should be for each account. Not doing so could result in missed expenses which means less deductions and more tax dollars paid to the government unnecessarily. Be sure you are handling client expenses properly as well. We’ve got a helpful article you can find here.

Take time to evaluate (thoroughly) your financial reports for the year

At a very minimum, pull a profit and loss report for the entire year and pay attention to where your money is coming from and where it is going. Which revenue sources might be easier to increase than others? Are there any expenses you can aim to cut in the coming year? Don’t fall into the trap of thinking that you must spend money to make money, that is false. Get creative and make sure your business runs efficiently.

Speaking on efficiency…

Time = Money, so don’t ignore the time your team spends

Generally speaking, a firm can support $1M in annual revenue with less than 10 people. Are you using your team wisely? Take a look at what each position in your business is responsible for and estimate the time that position should take. Now look at the people in those positions, are they working efficiently or working for work’s sake?

Adjust your financial reporting for next year

One adjustment that can significantly impact your business comes from evaluating how your Income Statement is presented. Your income statement tells the story of where your money came from and where it went. Many businesses operate in more than one area, yet their financials often don't reflect this. For instance, $500,000 in revenue is impressive, but doesn't it matter where that revenue came from?

Consider these two report layouts. Which one tells you more about your revenue sources?

REPORT OPTION #1

Service Revenue: $500,000

REPORT OPTION #2

Product Sales Revenue: $125,000

Consulting Revenue: $200,000

Subscription Revenue: $175,000

Knowing where you generate the most revenue is crucial. If you have a declining revenue stream, it might be time to consider dropping that service and focusing your efforts on areas where your business is already thriving.

For the love of business, set goals!

This is one of those things that EVERYONE knows they should be doing, but less than 5% of businesses actually do. Your goals should cover at least 4 areas in your business. Financial management, team management, client management, and growth management.

Financial Management

Revenue goals are almost always parallel with marketing efforts. You should always nurture a referral program, but do not neglect marketing. You should have a marketing budget in place and know approximately how much new business is generated from each marketing effort. This helps you to set revenue goals. Other financial management goals include having monthly budget review, quarterly in-depth evaluation of progression towards financial goals, and prioritizing and cutting expenses.

Team Management

The best way to motivate your team is to make them part of the bigger purpose or goal within your business. People are driven by something greater than themselves. Share your business’ goals with your team and make sure they are clear on the role they play in reaching each goal. Regular weekly meetings to check in with each other nurture and renew your team’s motivation.

Client Management

It may not seem related to money and finances, but it directly affects your business’ revenue in a huge way. Your clients’ experience with your business starts when they see or hear about you (before they even call in). What are you putting out there for your prospects? What are their pain points? Are you addressing them in a compassionate way? When they make that first call to your office, are they greeted by a positive upbeat caring receptionist? When they engage in your services is the on-boarding process easy for them? As the services progress, do they feel updated on the status or are they calling your office asking what the heck is going on? Once services are complete, do they never hear from your or do you put them on an email list where you provide them with relevant information on a regular basis so that next time, they come to you again? Can you duplicate all of that so that every prospect experiences the same process, creating raving fans who will refer you to the ends of the earth?

Growth Management

Nothing saddens me more than seeing a business drag its owner carelessly behind it because they can’t keep up with growth, let alone control it in a direction of their choosing. A critical component of growth and scalability is process creation. This applies to every aspect of your business. Your operations should depend on processes, not people. If you have the right processes in place, almost any qualified person should be able to step in and maintain the workload for their position.

In addition to creating processes for the work you're doing now, consider how those might change in the future. Technology plays a huge role in how businesses operate and will continue to do so in the future. Always look towards the future and how you can serve your clients better than any competitor by utilizing technology that will aid you in your mission.

“Success is no accident. It is hard work, perseverance, learning, studying, sacrifice, and most of all, love of what you are doing” – Pele

So, here’s to the new year, make it the BEST year so far!

 If you’re ready to take your business to the next level, contact us here. We’d love to see if we’re a good fit for your business.