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Take Stock of the Business Year – How to Conduct a Year-End Review & Plan for the New Year

January 6, 2010

By CaronBeesley

How is your business doing? Have you conducted a business review lately? As the year draws to a close, there is no better time to start planning again – and this invariably means taking stock of the business year, reviewing your market position, and deciding where to take your business in 2010.

Conducting a holistic year-end review has meaningful benefits for every small business owner – not least of which is planning for and positioning your business for economic recovery in the year ahead. 

Below are some tried and tested tactics you can employ to review your business performance, together with some tips for seeing beyond the malaise of 2009 and finding optimism in your accomplishments.

Give Yourself a Pat on the Back – Focus on Your Accomplishments

Where better place to start than focusing in on what your business has done well – a year is a long time in business and while we celebrate the highs, it is often the lows that stay with us. Change this attitude by reading *Make Your Year End Review A Morale Booster from’s Tana Woodward. Not only do Woodward’s tips help remind you of your successes they can help you repeat them.

Next you will want to assess key areas of your business including core activities, sales and marketing, employees, and business finances, here are some things to consider:

1.  Assess your Core Activities (i.e. What you Do and Who Your Market Is)

Core activities essentially encompass your business operations – areas to assess include your core products and services as well as your customer base. Ask yourself questions such as:

  • Which products or services are the most profitable? How can you optimize operations around the success of these?
  • Are any products that are failing? Are there any changes you can make to enhance their sales or profitability (production, distribution, sales, marketing, price, etc.)?
  • Are your products or services still aligned with your target market? Has your core customer base changed in the past year, what market forces impact your customer base? If the answer is yes, you may need to go back to the drawing board and assess what your customer needs are. Read this Market Research Guide to help you make more informed decisions about your market.
  • What can you do to optimize your cost base? Many businesses have closed their brick and mortar establishments to operate online only (get tips on starting an online business). Others have become home-based to save costs. Where can you realize efficiencies?
  • What do your customers think of you? In this *article on OPENForum, Karen Rogers, Vice President of FedEx Marketing and Jeff Barry, Vice President of the Enterprise Council on Small Business, stress the importance of having a “customer-centric” approach to business. More than just customer service: “…successful businesses watch the customer, become the customer, and involve the customer. Frame your market research in terms of living the customer’s life…” In *The End is Near (of 2009!) – Are you Ready?, Denise O’Berry offers some great tips for doing exactly this.

2.  Conduct a Sales and Marketing Review

In addition to measuring your sales performance and marketing ROI against your objectives and business plan, a full sales and marketing review should also include an analysis of market forces and the benchmarking of your business against the competition – an efficient way to do this is to conduct a SWOT analysis. Read *SWOT Analysis: A Great Strategic Tool (courtesy of Chemeketa. OR,  *Small Business Development Center). 

3.  Evaluate your Employees

Annual performance reviews are traditionally always something that managers and employees alike tend to dislike, if not dread. But a well prepared and honest performance review is an invaluable way to base line employee performance (strengths and weaknesses), recognize achievement, and ensure that individual goals are aligned with overall business goals. Get more tips on employee performance reviews from SCORE *here.  Once you have held reviews, you may need to revisit job descriptions and look for training and cross-training opportunities to prepare and align your employees with your changing business landscape.

4.  Review your Business Finances

Every business is different so it’s worth talking to your accountant about your individual circumstances, but as a guide you will need to review:

Budget – Do you have one and are you sticking to it? Read *5 Tips on Budgeting from SCORE.

  • Cash flow – Is it sufficient? Can you forecast cash flow trends so that you can anticipate problems and prepare for them in advance? Do you need and have a contingency plan? Learn more about *Managing Your Cash Flow from SCORE.
  • Profit – What is the state of your gross profit margin?
  • Cost Base and Pricing – Review your cost base (constantly). Do you need to adjust pricing – how will this impact your customer relationships?
  • Borrowing – Are you staying on top of your business loan or overdraft obligations? Should you options for refinancing?
  • Taxes – Get a step ahead of tax season pressures now to help maximize your deductions and sail through tax season. Read Small Business Tax Preparation Tips – Stay a Step Ahead of “Tax Season” Today for tips.

 Additional Resources

  • Writing a Business Plan – Resources, templates and tutorials to help small business owners develop a sound business plan.
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