As 2016 winds down, it’s time to start planning for 2017. For business owners this means getting financially prepared for the new year by following 25 ways in order to keep your business up-and-running for the long haul.
1. Revisit your business plan.
If you’re already a business owner then you probably have a detailed business plan that covers;
- A summary of your business.
- A description of your company.
- A market analysis of your competitors.
- The structure of your organization.
- A description of the products/services you sell.
- How you're marketing your business.
- Financial projections.
2. Gather necessary information for a business loan.
Speaking of loans, lenders will also require the following information;
- Business licenses
- Personal and Business tax information
- Personal and business bank statements
- Income statement and revenue information
- Detailed financial projections.
Even if you’re not currently looking for a loan, it’s better to have this information handy so that you’re not scrambling to put it together when you do need to borrow money.
3. Focus on profitability.
One of the most common mistakes that business owners make so that when they put money back into their company it’s only to grow. Instead, companies should be focusing on how to become more profitable. That’s because they grow too quickly and end-up having cash flow problems by doing things like hiring too many people but not enough revenue to pay them.
Either revisit or create a financial model by paying close attention to your expenses, assessing your marketing plan, building your projections from the bottom-up, checking results from the top down, and finding your breaking point. It may not be perfect, but those steps can guide you in boosting profits.
4. Set a savings goal.
By Jan. 1, 2017 you should have a savings goal in place. Remember, this goal should be measurable, achievable, realistic and timely. For instance, it could be establishing an emergency fund that can keep your business operational for three to six months if need be.
5. Evaluate your business processes.
Take a couple of moments to evaluate your business processes. This will let you see which areas are effective and running smoothly and which ones aren’t. For example, if you’re still using a paper-based invoicing system you should make the switch to a cloud-based system so that you can send invoices electronically and receive payments immediately.
6. Review your all of you insurance policies.
At the very least business owners should have the following insurance policies; personal liability, property, workers compensation, home-based, product liability, vehicle, and interruption. And, we don’t want to leave out health insurance as well.
Reviews these policies before the start of the new year. You may be paying for unnecessary coverage or there may be more favorable policies available from competitors. Also, depending on your business and its size, you may be required to purchase new policies that you weren’t aware of. If you get caught, you may be penalized.
7. Keep up on new tax rules and regulations.
There may not be major changes every year, but it’s important to pay attention to any new federal, state, and local tax rules and regulations. It could be anything from filing dates, increasing or decreasing tax rates, what can or can’t be deducted, and how much you can contribute into your 401(k) or Roth IRA.
8. Be aware of salaries in our industry.
Every year Robert Half publishes a salary guide that provides comprehensive data on average starting salaries. This will vary depending on where your business is located, but it’s an excellent resource. Use it to offer employees a competitive salary and plan your finances accordingly.
9. Declutter and get tax deductions.
There’s no better time than at the end-of-the-year to start decluttering your life -- and your business. The main advantage of decluttering your life is that it forces you to get organized, which will end-up saving your time and money. Also, you may be able to donate some of the things that you’re no longer using in your office. Not only does this make you feel good, you may be able to deduct from your taxes.
10. Research financial institutions.
As mentioned earlier, you never know when you’re going to need to borrow money. During your holiday travels, take the time to start researching and comparing possible lenders that fit you exact business needs. This way you can apply for a loan as soon as you need to without having to do the legwork.
11. Draw on your bank credit line.
Again, you never know when you’re going to need to inject cash into your business. To be on the safe side, if you have a credit line use at least a little of it. The reason? Banks prefer to issue credit lines to companies that use it.
12. Evaluate your product lines.
The end-of-year is the perfect time to review all your product and service lines. Doing so gives you the ability to get rid of any of those under-performing products or services and adapt your business to fit the needs of an ever-changing market.
13. Look for ways to generate recurring revenue.
If you haven’t noticed, recurring monthly revenue is all the rage. That’s because it creates a predictable cash flow, decreases missed or late payment, and saves your business a lot of time and money. Find ways within your business to start generating recurring revenue for 2017.
14. Make saving automatic.
Just like with your personal savings account, you can make saving automatic by withdrawing a portion of your paycheck, 5 percent for example, and directly depositing it into a savings account. You can also set it up so that throughout the month a certain amount of money is transferred into your business's savings account. This prevents you from spending that money.
15. Challenge the status quo.
Don’t be complacent! That’s one of likeliest ways to kill your business. Start thinking of how you can boost gross margins, how to leverage your most profitable products or services, and how to target high-profile customers.
16. Monitor your monthly expenses.
If you haven’t done so yet, start tracking your monthly expenses. You want to track every single purchase and expense your business has made from month-to-month. This lets you know how much you’re spending on your expenses and where to start trimming the fat if you’re overspending.
Also, this lets you know if any of your accounts have been jeopardized to cyber-attacks if you spot any unauthorized purchases. This not only gives your total control of your money, it’s one of the most important steps when creating a budget.
17. Create a budget and stick it.
Speaking of budgets, it’s time to sit-down and create one for your business. I know it’s not exciting, but after you create a realistic budget you can get your finances in order by getting rid of any frivolous spending. Budgets also help you keep you’re spending in-check so that you can reach any savings goals that you’ve set.
18. Cut costs, even if revenue is solid.
Cutting expenses it tough, especially if revenue is good and you aren’t have any cash flow struggles. But, why wait to start making those costs? If there are expenses that you feel are unnecessary or just make you cringe, then get rid if them instead of wasting your money.
19. Shop around.
Whether if it’s a new insurance policy, credit card, bank, supplier, or vendor, start comparing prices. You may discover that you can find a better deal. And, if you do find a better bargain, but don’t want to make a switch, then negotiate a price that’s in your favor.
20. Evaluate the ROI of your sales and marketing efforts.
Track your leads and see where and how you’re reaching customers. If that’s through Facebook ads, then keep going with that method. If not, then dedicate that money to a channel that is getting results.
21. Stay organized.
I can’t stress this enough. You have to a system in place so that all of your records are organized. Take your invoices, for example. When they’re organized you can see which invoices have been paid and which are pending. You can also have them handy in case you get audited. Thanks to the cloud, most of this information is started in one convenient dashboard automatically.
22. Meet with an accountant or tax advisor.
This is probably the most important move that you should make. These professionals know how to prepare your finances, whether if it’s taxes, planning, or budgeting, the correct and legal way. I would suggest that you make an appointment before the tax-season
gets in full-swing because they’re going to be extremely busy.
Rampton, John. Entrepreneur <https://www.entrepreneur.com/article/285550>