As this year comes to a close, it’s time for small business owners to assess their progress, wrap up loose ends, and prepare for a successful new year. With the holiday season we all get pulled in so many different directions, that it’s easy to forget those end-of-year things we should do for our business.
So while you are in between parties (or eating Hershey’s kisses with a glass of wine on your couch), take a quick look at the things we outline shortly..
Below is a general 13-step checklist to ensure that your business is ready to tackle new challenges while also celebrating the past year’s achievements. Cheers!
Quick Breakdown of the Checklist
Here are the main tasks you should try to complete at the end of the year:
- Review Financial Reports
- Back up Data
- Verify Client and Vendor Information
- Inspect Your Business Website
- Analyze Your Marketing Strategies
- Assess Your Business Insurance Needs
- Review Business Licenses and Regulations
- Look for Outdated Technologies
- Conduct an Inventory Count (if applicable)
- Review Your Hiring Needs
- Prepare Tax Documents
- Set Major Goals for the Coming Year
- Celebrate Your Successes
So let’s really take a closer look at each of these steps..
1. Review End-of-Year Financial Reports
While you should obviously review your finances frequently throughout the year, the end of December is the perfect time to analyze your current situation and your progress over the past 12 months.
Start by reconciling all your accounts. Your bookkeeping should be entirely up to date. Review accounts payable and receivable to make sure that your books are accurate. With everything updated, your next step is to compile financial records, including: Cash Flow Statements, Profit and Loss Statements & Balance Sheets
Cash flow statements help you determine whether you’ve generated enough cash to truly sustain your business. This audit offers a better look at the financial health of your business. You can then identify cash flow problems and make predictions for the following year.
Profit and loss statements are used to give you a quick snapshot of how your company performed financially for the entire year. Taking a closer look at these statements can help you find the exact strengths and weaknesses in your financial management.
Balance sheets are also used to help you analyze your business’s financial standing. It tells you what you owe and what you own. Use these details to determine if you’re using assets effectively and to assess the level of financial risk that your company faces when comparing equity to debts.
Compare your data year-over-year to look for growth trends and those dreaded areas of concern. For example, you may have experienced unexpected expenses or significant revenue increases. Reviewing those financial records helps reveal inefficiencies, such as overspending or missed opportunities.
2. Back up Data
Data loss can be beyond devastating for a business, which is why you should make a habit of securing backups, especially at year-end when your records are finalized. We have a tendency to not worry about some of these things until we have to, and by then it’s too late.
Store digital copies of important documents and business information, such as vendor contracts and customer lists. Keep copies in multiple locations, including on-site and cloud storage, to ensure easy access if you should suffer a cyber-attack or system failure.
Consider using an automated backup to save time and prevent human error. You can schedule backups to automatically occur at specific times, such as the end of the day, week, month, or year. Test the backups occasionally to ensure that they’re still accessible and functioning correctly. You should also protect sensitive data using encryption and limit access to only authorized personnel.
Completing a thorough backup at the end of the year safeguards your business operations from disruptions so you can start January on the right foot.
3. Verify Client and Vendor Information
Accurate client and vendor records are needed to prevent billing errors and miscommunications. You should review your CRM system, client databases, and vendor contracts to confirm contact details, payment methods, and delivery addresses. Make sure that everything is current.
Outdated information could lead to costly delays in orders or missed invoices. These issues also increase the risk of problems that could lower customer satisfaction. Use this opportunity to identify inactive clients and unreliable vendors.
Maybe even send out a courtesy update email to clients and vendors to confirm details for the upcoming year. Staying proactive builds trust and ensures smooth communication.
4. Really Inspect Your Business Website
Perform a full audit of your website. As it represents your brand, acts as the center of your online marketing efforts, and serves as a lead-generation tool, making a strong impression is crucial. Look for issues that could take away from the user experience, such as broken links, outdated content, and other errors.
You should also analyze user metrics to get a better understanding of how your site performs. Review bounce rates and time spent on pages to identify weak areas. Improve the pages that people spend less time on while trying to copy the success of your most-visited pages.
Optimize your site for search engines and users. Incorporate updated keywords and metadata for better SEO to help with your search rankings. Your website should also be made to work seamlessly on mobile devices, as more users now use their smartphones for browsing the internet and searching for businesses. You know we’ve all experienced it..going to a website on your cell phone & the page is jumbled due to not being optimized for mobile..the worst. Don’t let your website be one of them.
If your site has an e-commerce component, test the checkout process. Look for technical issues that could keep people from completing purchases.
5. Analyze Your Marketing Strategies
Along with analyzing your website, make sure you review your marketing strategies. Look at key performance indicators (KPIs) for your online marketing campaigns, such as:
Identify which marketing efforts were most effective for you. This could include your email campaigns, social media ads, or content marketing.
If certain strategies have underperformed this year, try to pinpoint the causes and decide whether to adjust or abandon them. Assess audience behavior and feedback to make sure that your ads and content are reaching the right audience and resonating with them.
Create a marketing plan for next year that builds on your successes. Focusing more on your high-impact strategies may lead to a better return on your marketing spending. Marketing can be a bit of a headache as you really need to try a bunch of different things to figure out what works.
6. Assess Your Business Insurance Needs
Business risks evolve, which means that you may need to occasionally update your insurance coverage. Review your policies, including general liability, property, and workers’ compensation insurance, to ensure that they reflect your current business operations.
If your business has grown, added new locations, or bought significant equipment, you may need more coverage.
Cyber liability insurance is also increasingly important for businesses, especially when handling sensitive data. It protects against losses from data breaches, cyberattacks, and other digital threats. It may cover notification costs, legal fees, and your recovery efforts.
Speak with your insurance provider to address any gaps in coverage or to adjust your limits. Protecting your assets now can save you from super costly setbacks later. Consulting with a licensed insurance agent ensures that you’re adequately covered.
7. Review Business Licenses and Regulations
After assessing your insurance policies, review your legal requirements, such as the need for business permits and licenses.
Depending on the type of business and industry, you may need to maintain various professional licenses. Many states also require a sales tax license when selling goods. You might also need to update contracts with vendors or suppliers and renew software licenses.
Make a list of any licenses, contracts, or regulations that require your attention, as dealing with these details now can help you avoid late fees and other penalties. Consider hiring an attorney as well to review your business operations and ensure compliance in all areas.
8. Look for Outdated Technologies
Assess your IT tools and systems at the end of the year, paying attention to obsolete technologies, such as old software or hardware, as they may slow down your business operations.
Replace slow hardware, update software licenses, and transition to cloud-based solutions whenever possible. Staying current with technology helps improve:
Upgrading outdated technology can increase your productivity and efficiency. It helps you and your staff get more done with less effort and bonus.. fewer mistakes. For example, switching to a scalable communications platform can enhance collaboration, prevent miscommunication, and save money compared to traditional phone systems.
You can also improve customer service by adopting the newest IT solutions. Using the latest technologies may help you deliver efficient, customized service.
In a fast-paced environment, businesses that lag behind technologically could also seriously lose customers. This means that adopting the latest tools can help your business differentiate itself and gain a competitive advantage.
Advanced technologies can also assist with decision-making, giving you more insights into customer behavior and market trends. This helps you make data-driven decisions so you can cut down on risks and find more growth opportunities. Updating your technologies can also help with cybersecurity, protecting against cyber threats, and securing sensitive data.
9. Complete an End-of-Year Inventory Count
If your business has physical goods, you definitely need a year-end inventory count. It helps you accurately assess stock levels, which is necessary for financial reporting, complying with tax requirements, and reviewing the true cost of your goods sold.
Proper inventory tracking helps you avoid overstocking and understocking. Use this data to improve your purchasing strategy for this next year.
Schedule a time for your inventory count when business operations are slow to cut down on disruptions, ensuring a smoother counting process. Assign roles for the count and make sure that everyone knows what to do. If you have discrepancies, adjust the records so that they match the physical count.
10. Review Your Hiring Needs
Now that you’ve reached the end of the year, consider whether your workforce currently meets your needs or if you have any hiring gaps that you need to fill. Evaluating your staffing situation can ensure that your HR department is ready for the coming year.
Along with hiring additional employees, consider investing in training programs. You can upskill your current staff, helping them improve their skills and efficiency in their jobs.
You might also find that some positions that are currently held are not working well as time goes on. No one wants to make those decisions but it’s always smart to evaluate if something or someone isn’t a great fit for the company.
Taking the time to review your hiring needs now ensures that you have the right people in place to achieve your goals next year. Consider the roles and positions that you need to fill. Work with your HR team to create a list of job vacancies so you can start your search as soon as the new year begins.
11. Prepare Tax Documents
Tax preparation is one of the most important end-of-year tasks. Organize your financial records, including income statements, receipts, payroll reports, and expense documentation. Make sure that these records are accurate and readily available for your accountant or tax preparer.
Review potential deductions. Common expenses include office supplies, professional fees, marketing, vehicle expenses, utilities, and rent. These deductions can minimize your tax burden, saving your business money.
Staying organized with these records also prevents last-minute scrambling, which reduces the risk of errors that could lead to audits.
Review the types of taxes that your business needs to file, which are likely to include income tax, estimated taxes, employment taxes, and more. Determine how you’ll file business taxes, such as a sole proprietor, partnership, corporation, or another entity type, as this decision affects your tax obligations.
Use accounting software to track income and expenses, saving time and reducing errors. These steps can really make the tax season less stressful when it comes up in a few months.
12. Set Major Goals for the Coming Year
Decide what you want to accomplish the most in the next 12 months. Goal setting creates a roadmap for your business. Consider your previous achievements and challenges to help set realistic objectives.
Remember to use the SMART model. Set specific, measurable, achievable, relevant, and time-bound goals. Break goals down into smaller steps with clear deadlines. For example, increasing revenue by 15% is a SMART goal, as it creates a specific marker from which you can analyze your success.
13. Celebrate Your (well deserved) Successes
Take time to recognize your hard work and accomplishments and pat yourself on the back. You should also acknowledge the hard work of your staff. Recognize their major milestones publicly, such as on social media or in newsletters. You could also host a team gathering or send thank-you notes to loyal customers and vendors.
Celebrating milestones helps foster a positive culture and builds morale for the year ahead. It keeps everyone motivated.
Running a business is not a cake walk, try to remember how amazing it is that you’ve come this far. The simple fact that you even have to worry about this stuff is a definite triumph.
So to wrap up: You now have an end-of-year checklist to help ensure that you’ve covered all your essential business needs before the new year starts. Use it as a guideline to help wrap up operations, address any outstanding issues, and prepare for the coming months. Good luck and Happy (almost) New Year!
Stephanie
Stephanie is the Marketing Director at Talkroute and has been featured in Forbes, Inc, and Entrepreneur as a leading authority on business and telecommunications.
Stephanie is also the chief editor and contributing author for the Talkroute blog helping more than 100k entrepreneurs to start, run, and grow their businesses.