by Yuwanda Black
Inventory, tax preparation, company policies and sales projections - not your ordinary holiday list. However, you are no ordinary person. You are a small business owner.
As the year ends, evaluating how to run smoother and more profitably in the coming year should be at the top of every business owner's list. An end of year assessment will give you a head start.
Following are four areas, at minimum, that should be scrutinized:
1. Inventory: What sold? What didn't sell? What are you going to do with the excess? How? By when? Will you add new products/services? Discontinue others? Adjust prices? Add complementary goods/services?
If you've kept adequate records, you should be able to glean all of this information quite easily. In spite of the time of year, this is no time to be sentimental. Numbers don't lie. Get rid of what didn't sell and add more of what did.
2. Tax Preparation: Don't wait until March/April. If you are a corporation, your return is due March 15th, not April 15th. Organize now so that you can start the new year ahead of the competition. While they're mired in last year's paperwork, you'll be servicing customers.
If the thought of accounting and inventory makes you nauseous, as it does me, invest in good software for these purposes. QuickBooks, Peachtree and Microsoft BCentral come to mind. It will pay huge dividends this time of year.
If you're thinking you'll just outsource these functions - forget it. Unless you can afford a part- or full-time bookkeeper, you will have to do some amount of accounting for your business. In fact, even with a bookkeeper, it is essential that you know your own books. Numbers are the lifeblood of your business. There's no way around this. If there were, I would have found it by now - trust me.
Good software, though, can make it soooo much easier. You'll be able to run applicable reports, organize receipts (which you've been doing all along, right?), and hand everything over to your accountant right after the New Year. Now, just think how accomplished you're going to feel!
3. Company Policies: End of year is a perfect time to reflect on all company policies: human resources, retirement plans, insurance, payroll, etc. If you want to change carriers, add incentives, phase out others, etc., now is the time.
It is much easier to begin new relationships and terminate others at year's end. Mainly, it makes for easier accounting. And, we don't to complicate that process anymore than necessary, do we?
For example, let's say you've decided to change payroll providers. Rather than switching in August and reconciling records from two companies at year's end, start with a new provider in January.
As human beings, change tends to be difficult. We all like what is familiar - even if it's not the best. However, we're programmed to accept change at the beginning of a new year. After all, "new" is part of the phrase. So, whatever changes you implement may go over easier with employees at this time.
4. Sales Projections: Now it's time to look at your numbers with an eye toward the future. What can you do to increase sales 5, 10, 20%? This is why it's important to know your numbers. You should already have an idea of where the bulk of your revenue came from and what you could add/drop to increase sales.
Gather all of your reports, eg, sales, inventory, income, expense, etc., and go through them thoroughly. With concrete numbers in front of you, you will be able to devise a plan for next year's sales goals.
The holidays are about giving. So, make your list and check it twice. You've taken care of everyone else all year long. Give yourself the gift of preparedness for future success.
Yuwanda Black is an Author/Instructor/Speaker,
and small business expert who advises others on how to achieve the
dream of working for themselves. She has written and published
numerous small business articles and press releases
in promotion of
her ventures. Her current venture, EthnicVendors.com is an
online shopping portal and catalog distributor for ethnic goods and
services. It is a subsidiary of EthnicHomeDecor.com.
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