Smart business owners know that year-end planning is critical to keeping an organization on track. This process can give you insight into how your company performed over the past year, and help you develop a plan to prosper in the year to come.
These guidelines for year-end business planning will help get you started.
Understand the numbers
The end of the year is an ideal time to plan the following year, because it’s likely you’re already going over the financial numbers. Why not do some analysis to help with your decisions on next year’s plan?
It’s a good idea to get this step done before you do anything else, that way you have an accurate sense of where your business will end up financially by year end.
- Financial documents – prepare and examine standard business financial docs to be the basis of your decisions. These docs might include your balance sheet, income statement, or cash flow statement. Analyze the related ratios, like total debt ratio, profit margin, etc. It won’t take long if you have your balance sheet.
- Tax strategies – Evaluate your current tax strategies. Which of these tax strategies have you used and how well did they work for you? Investigate different tax strategies that you haven’t used. Talk to a professional such as an accountant and/or tax lawyer to get advice about which tax strategies would be best for your personal and business circumstances.
Evaluate your goals from last year
Now that you know where your company stands financially, it’s time to take a look at how it got here. Pull out your business plan and any other planning documents such as last year’s action plan and review last year’s goals.
Did your business accomplish what you set out to do? Why or why not? Make some notes on your thoughts about the successful accomplishment of your goals (or lack of it). These will be handy when you do your business planning for the current year. Reflecting on your past successes and shortcomings is the best way to create a solid plan to grow your business next year.
Set new goals
You’ve done all the groundwork and you’re ready to do some business planning. That means that you are going to:
- Set next year’s goals.
- Prepare an action plan or plans.
- Start implementing your action plans.
Before you set any goals, make sure you are setting goals that are going to help you accomplish what you want to accomplish. Also, ensure that you can work out the steps to take that will allow you to reach your goal by creating an action plan. And most importantly, take action.
Don’t fail to plan
You know the cliché; if you fail to plan, then you plan to fail. A little planning goes a long way.
We all know how important business planning is, but it’s easy to put it off in the flurry of daily events. Hopefully, this article has inspired you to get to it and made your business planning easier.