5 Tips for End-of-Year Business Planning
By now, the pumpkin pie is just a distant memory, and the new year is flying towards us fast. Our minds are getting pulled in seven different directions with the things we have to accomplish before the end of the year.
Many business owners and solopreneurs struggle during the holidays to set aside time for reviewing the past year. We’d all love to take a month off to think back about our successes and failures over the last twelve months, but for most people that just isn’t possible. Responsibilities, commitments and pressures force us to keep looking forward, when in reality we’re leaving a lot of money on the table by not carving out time to embark on a solid end-of-year review.
Here are 5 tips to finish your year with a productive bang.
#1 – Write down everything you’ve achieved
This is the time to grab a coffee (or a glass of wine), find a quiet space to reflect, and perform a brain dump of your entire body of work this past year. It may feel indulgent at first, but this is a crucial step in building an understanding of what you can improve next year.
Your body of work is everything you made or projects you finished. Every blog post you submitted, every contract you delivered on, every website you designed, every cupcake you baked. We recommend opening your notebook and writing as opposed to typing (science tell us writing improves memory recall and encourages critical thinking), but do whatever feels right. As you build this list, ask yourself if the year has aligned with your mission and values.
There’s a simple and succinct review process used by serial entrepreneur Chris Guillebeau: what went well, and what didn’t go well? As you look back at our work, ask yourself these two same questions. Take your time, and make sure to celebrate your accomplishments as you go.
#2 – Review your financial goals
Don’t think you’re a business expert? It’s okay to admit it! Most small businesses are started by people who have a skill in a particular product or service, not because they’re business gurus. Creating a great product is key. However, most people are in business to make money. The financial goals you set for your business are just as important as the product you make or sell.
Start by setting new revenue goals. This can be a good time to look at your pricing structure, and get honest about your business model. Many entrepreneurs make the mistake of undercharging. Ask yourself: “Are my experience, time, and costs accurately reflected in my pricing?” Consider bumping up your rates in the new year to reach those revenue targets so you can increase income without having to sell more product. A simple Google search can show you all of the tools available to set financial goals during end-of-year business planning including market research, past performances, and industry analysis.
#3 – Make the first quarter count
Now that you’ve dissected this past year, start your end-of-year planning by determining how to knock the first quarter out of the park. By setting a strong foundation for Q1 you’ll build momentum into the next three quarters.
When planning business growth, name the top three strategic results you’d like to accomplish in the next three months. Picking just three goals allows you to focus and build an action plan. Any more than three can dilute your efforts and lead to feeling overwhelmed. It’s important to be realistic as to what you can achieve, but don’t be afraid to stretch. Be relentless in your pursuit of creating a clear action plan to start your year off right.
#4 – Devour more books
Charlie Munger once said “go to bed every night a little wiser than you were when you got up.” In the spirit of setting goals for the new year, this is a perfect time to resolve to read more business books. Studies into the habits of successful people show they are voracious readers. Bill Gates reads 50 books a year. Facebook COO Sheryl Sandberg devours books and even shared her reading list. Oprah Winfrey credits books as her “pass to personal freedom.”
It doesn’t matter how successful you are at this stage of career, education is a journey, not a destination. Reading helps us learn from the mistakes of others (so we don’t make them too) and gives us an opportunity to stand on the shoulders of giants. It can inspire us, excite us, invigorate us and give new perspectives on how to succeed. Don’t worry about keeping up with Bill Gates, just try to read 5 pages a day to start, and build up to 10 and then 20. You’ll usually end up reading a lot more, and will be building up new knowledge before you know it.
#5 – Get your tax planning in order
You’ve treated yourself to an uninterrupted “business year in review” session, thought long and hard about your pricing structure, set first quarter goals, and put some new best-selling business books on your Amazon wish list. Exciting stuff! However, it’s important to take care of some of the housekeeping, too.
Now is the time to get some solid end-of-year tax planning done. You can reduce your taxes by exploring which expenses can be prepaid in advance for next year. This will allow you to deduct those expenses this year and offset your income. For example, you can prepay a couple months of office rent, or buy equipment, or potentially give your website the refresh it needs. Adding tax planning to your end-of-year review will relieve some mental pressure, and help make next year one for the record books. A little planning goes a long way.