Here are year-end business tips to save you money, time and protect you and your business.
December typically brings many of us great joy and celebration. We are able to spend time with family, reflect on wonderful memories of past December holidays and look forward to the start of a new year.
As entrepreneurs there are certainly important tasks we need to do before the end of year to keep our business and personal life in order. Here are five tips that can help in ending the year on a positive note.
Tip #1 – Corporate Records, make sure you have all your corporation or LLC records in place. Every Corporation or LLC should have the following documentation prepared each year to protect the corporate veil and provide back-up documentation in case of a tax audit. One of the first things a tax agency will do in an audit is ask for these.
- Annual meeting minutes of the Board of Directors (Managers)
- Annual meeting minutes of the Shareholders (Members)
- Corporate Resolutions for non day-to-day tasks such as borrowing money, opening a checking account, etc.
- Stock Certificates filled out for all shareholders
- Stock ledger kept current and up-to-date
If you need a good tool for maintaining your corporate records I would highly recommend the BizDoc software. The software is an interactive program that isn’t just a bunch of word document templates, it can actually help track everything for you and provide guidance on what to do next.
Tip #2 – Financial Review. Pull together a Profit and Loss statement month-by-month for the entire year with a comparison against the previous year’s numbers. By doing a review of year over year results by month you can get a very good feel for where you business is going and what needs to be corrected. If you see sales overall drop, you need to look at the items you are selling and see if the drop was across the board or only in one area. You can also look at your advertising expense and see if the same amount was spent year over year.
You should also look at expense growth. Have you increased expenses or overhead that weren’t necessary?
Once the review is complete, write down key findings and action steps you can take in the New Year to correct them.
Tip #3 – Budget and Projections. Take time to layout projections in revenue for the New Year by month. What will sales be each month for the New Year and break it down by category of sales. With the projection in sales you should then be able to determine how much you need to spend in marketing to get to that number. This will start you on the budget. So next start a budget for what expenses will look like in the New Year based on the previous year’s results. Look at the key findings in your review from Tip #2 and be sure to correct the areas that need attention.
Once the budget and projections are complete make sure you use them as a tool throughout the year. This means you need to track your Profit and Loss statement on a weekly basis to be sure you are sticking to the budget and meeting the projections.
Tip #4 – Write down your goals. I never start a new year without writing out two sets of goals. I have one list of personal and one list for business. I found it was a lot easier to write the goals when I didn’t put my business into the overall mix. Personal goals need to include at minimum your physical health, financial situation, mental wellbeing and rewards. I love having rewards as part of my goal list so I am reaching to achieve the goals for more than the satisfaction of meeting the goal. I want to reward myself for doing it. I have trips, electronics, and simple rewards such as an extra day of golf.
Tip #5 – Create an Action Plan. Now that you have a list of corporate documents you need to complete, a review of your financial situation, budget for your business, projections of where sales need to be and goals written out you need to create your action plan.
Start at the end. Look in the future 12 months. Figure out what everything has to look like in order to reach your objectives. Then work backwards. For example, if you want to lose 20 lbs in the next year, you can break that down by saying I need to lose 1.7 lbs a month. In order to lose 1.7lbs per month you need to figure out how many calories you need each day and make sure you eat only the amount of calories you need and nothing more. Then determine how many days each week you need to exercise in order to lose the weight.
In the first month or two you will be able to determine exactly what those numbers are and can set out the action plan. The action plan should have in it what you need to do each day, week and month to accomplish the objectives.
When looking at the five tips, I start by protecting my business (where my income comes from). I want to make sure initially it’s protected from lawsuits and audits, and then make sure I have a good budget and projections in place. Once I have that I can create my goals and action plan to tell me what I need to do for the new year.
David Gass
