5 Pieces of Your Business to Review Before the New Year
The year is nearly done. We hope that it has been a prosperous one for your company and that you are excited about 2015. While you may be slowing down as the holiday season approaches, there are a few must-dos to tackle before the new year.
1. Clean up accounting
You’ll want to tie up any loose ends. Make sure that all expenses are entered and that things are recorded and classified properly. You will need accurate financial statements to prepare tax returns and to assess your company’s performance.
2. Review performance
As soon as you have your financials completed you can assess your company’s performance for the year. Review revenue. Break it down in whatever way is appropriate for your business. You might look at it by product line, by job, by client, by geography or by salesperson. Assess gross margin and profit in a similar way. Look at expenses by line item. There should be one person and only one person responsible for each line item.
What goals did you have that went beyond financial performance? Did you achieve everything on your list? Did you launch a new product line, expand into a new geography or complete an acquisition? If not, what changes do you need to make? Where do you need to shift your resources and/or focus to reach these objectives?
3. Review external relationships
You likely have important relationships with vendors, partners and/or customers. The end of the year is an excellent time to review the relationships that are critical to your success. Is your company getting what it needs from the relationship? What changes can you make to improve the benefit that your company is getting or should you end the relationship?
It may sound odd, but an equally important question to ask is are your vendors, partners and/or customers benefiting from the relationship as well? It is certain that if they aren’t benefiting from the relationship, they won’t be doing business with you for long. Business only continues when the relationship is mutually beneficial.
4. Review employees
The year's end is a traditional time for employee-performance evaluations. Although we feel strongly that employees should receive feedback much more frequently than annually, it is nevertheless appropriate to assess each person’s performance at the end of the year. You should be measuring their accomplishments against specific, quantifiable goals. However, if you did not set these, you can still make a qualitative assessment of performance.
5. Review yourself
Finally, you’ll want to take a step back and assess your own performance. How did you do vs. your goals? What would you need to do to take your personal performance to the next level? Is there a book that you have been meaning to read? Do you want to attend a training course? Should you hire an executive coach? Reaching out for help when you need it is not a sign of weakness. It’s a sign of intelligence and self-awareness.
The end of a year is a great time to assess how you have done and where you stand. It’s also the right time to plan for the coming year.