As the end of the year approaches, it’s time to start planning for the coming one. Things obviously are crazy hectic during the holiday season but it’s important to set aside a little time for evaluating your business.
Getting a head start could help you keep your momentum going and in turn achieve even better results next year.
So, how do you actually get started? Here’s our selection of the best end-of-year tips for business owners who want to start next year strong.
Reflect on the Current Year
It may seem cliché, but the end of the year is the perfect time to reflect on what worked and what didn’t. Review your business goals and assess how well you’ve achieved them.
A year-end review is a common tool for taking stock of your business achievements and shortcomings. Reflect on the goals that you set at the start of the year. Analyze the factors that contributed to the success or failure of each goal and identify the areas that need improvement.
Looking at key performance indicators (KPIs) can help with your year-end review. Pay attention to the KPIs that you hoped to improve most, such as sales figures or customer satisfaction metrics.
Along with a quantitative analysis based on concrete data, you should perform a qualitative assessment with feedback from employees and stakeholders. Get input from other people in your organization as to how well they personally think the business performed this year.
Conduct a Financial Review
Conduct a thorough financial review for a better understanding of your business’s financial health. Carefully scrutinize all revenue streams, expenses, and profit margins. Use this data to develop a budget for the upcoming year.
If it fits your budget, consider hiring an accountant or financial auditor. A professional financial audit gives you a detailed look at how your business spends money. You can explore all operational costs to find areas where you can save money.
A financial auditor provides an outside perspective. They can provide an unbiased look at your finances and identify problems before they get out of control. They help mitigate risks and may even boost investor confidence for those seeking outside investment.
Understanding your business finances at the end of the year can definitely help with your budgeting for the coming year. You get a better idea of what you can afford, which is useful if you have plans for expanding your operations.
Assess Inventory Management
After evaluating your finances, evaluate your inventory management practices. This is especially important for businesses involved in the sale of physical goods with large inventories, such as e-commerce businesses.
Try to identify slow-moving items. Plan promotions or discounts to help you clear excess stock. This frees up space and helps you optimize your remaining product offerings for the coming year.
You can refocus your efforts on the best-performing items while clearing out under-performing items. Use historical data to forecast demand for the upcoming year. You may also want to introduce new products. Try to find items based on the latest market trends and customer preferences.
If necessary, communicate with your suppliers or vendors to keep your inventory flowing smoothly. Discuss any future changes in your product line to prevent potential supply chain disruptions.
Conduct Employee Performance Reviews
Use employee performance reviews to provide your team with constructive feedback. Set clear goals for them to also focus on for the coming year.
An effective employee performance review can help motivate your workforce. The review offers a roadmap for professional growth that aligns with the needs of your organization. Start by assessing each employee’s performance against any goals set for the year. If no goals were set, base the review on their job responsibilities and ability to meet them.
Make sure that the performance review involves clear two-way communication. Always be open & encourage employees to share their thoughts. This helps build trust and keeps conversation open on both ends.
You can also use this opportunity to receive feedback on the company culture and work environment. You can gain some very useful insight for creating a more positive workplace.
Gather Customer Feedback
Use surveys and social media to gather important customer feedback. Learn more about the satisfaction levels of your typical customer. The insights that you gain may help you improve your offerings and enhance the overall customer experience. This really can go a long way towards boosting customer loyalty.
If possible, try to get feedback from multiple sources or customer touch-points. For example, you can ask for feedback during the purchasing process, customer support interactions, and any other point of contact to gain valuable insight in those areas.
You can also watch online reviews and social media platforms for customer comments. Pay attention to both positive and negative comments.
Addressing the negative comments shows a commitment to customer satisfaction. However, you also need to listen to positive feedback to understand what customers like most about your products or brand.
Audit Your IT Infrastructure
Assess your current IT infrastructure to find opportunities for improvement. You may find that you rely on outdated solutions for a particular business operation. Adopting the latest technologies may increase your efficiency and help you stay competitive in the coming year.
For example, a study found that over half of organizations planned to implement artificial intelligence (AI) and automation technologies in 2023. Those that don’t keep up with the latest technological developments risk getting left behind.
Evaluate both your hardware and software needs. Guage the condition and performance of all hardware components, such as servers, workstations, or business phone systems. If any of your equipment is outdated, consider replacing it or upgrading to something newer.
When it comes to software, make sure that you are using the most efficient solution for each related business process. Updating to newer software may offer improvements in specific areas of your business.
Review Your Partnerships and Commitments
The end of the year is a great time to review your partnerships and collaborations. Decide whether they helped you achieve your business goals. If not, you may want to explore alternatives and start fresh.
Every partnership and collaboration should contribute to the success of your business. As a business owner, you need to be able to end partnerships when they no longer meet your needs. Sometimes it’s hard to make those tough decisions but it’s necessary.
You can also look for new potential collaborations, Be proactive in finding networking opportunities. This may involve attending industry events, conferences, and other networking forums.
Try to attend both physical and virtual events to connect with more professionals in your market. However, avoid rushing into any new partnerships or collaborations just because. Complete your due diligence by assessing the reputation and financial stability of any future partners.
Review Legal Compliance
Make sure that your business follows all relevant laws and regulations is a big one here. Take the time to review all contracts and agreements to protect your business interests and avoid any penalties for noncompliance. Scrutinize your contractual agreements, including vendor contracts and employee agreements. Confirm that the terms and conditions of the agreement are up to date and legally sound.
You should also verify that your business is continuing to follow labor laws and regulations. This includes following laws related to working hours, minimum wage requirements, and workplace safety standards.
Things can change in regards to overall regulations, so it’s important to stay very up-to-date. Your legal responsibilities as a small business owner will vary based on your business & location but this is a great resource from the SBA to look over.
Data protection and privacy laws also need to be followed. If necessary, partner with an IT security firm to audit your data security practices and ensure that your data handling procedures meet all applicable laws.
Update Emergency Response Plans
Use the end of the year to review your emergency preparedness. Either develop or update your business continuity and emergency response plans. Review the details of the plans with your team. Keep them informed about your plans for dealing with unforeseen events to ensure that everyone is on the same page.
Emergency response plans may address a wide range of potential disasters, including virtual and physical emergencies. For example, you may want to review your data backup and recovery plans. Regularly testing backup systems may help you recover quickly from a cyberattack. Clearly, this is especially super important if you are in the tech sector.
As of 2023, close to 72% of all businesses worldwide have been affected by ransomware attacks. Addressing any vulnerabilities now can help you remain vigilant in the coming year.
You should also prepare for physical emergencies, such as fires. Make sure that your facility has on-site supplies and equipment for emergencies. You may need first aid kits, fire extinguishers, and evacuation routes. Review these details with your team to ensure a smoother response to a potential emergency. If your team is fully remote, this one obviously doesn’t apply to you & hopefully your employees have their own personal safety plans at home :).
Outline Key Objectives for Next Year
The previous tips focused on analyzing the past. Next, you need to start on your New Year’s resolution list. After assessing your business’s performance for the current year, decide on your key objectives for next year.
Clearly define what you hope to achieve next year. Don’t create vague goals, such as “increase sales.” You should get specific, such as “increase sales by 20% by acquiring new customers and upselling to existing ones.”
You should also ensure that your goals are quantifiable. Choose the key performance indicators that you need to track to analyze the success of a goal. These goals should also be realistic. If your goals are not achievable, you more easily set yourself up for failure. Choose goals that are within reach yet still challenging.
Plan Marketing and Promotion for Next Year
Start planning your marketing strategy for the coming year. It may help to review the performance of your current marketing campaigns. Analyze which strategies worked best and try to recreate the same success there.
Now is also a good time to revisit your buyer personas. Make sure that you still understand the needs and preferences of your target audience. Look for any shifts in your audience demographics or preferences that may have changed over the past year.
Along with your target audience, assess your competition. Complete a thorough analysis of your competitors to identify their strengths and weaknesses. You may also uncover gaps in their coverage, which could help you target customers that they missed out on.
After completing your research, start developing a content release strategy. Consider using a content calendar to schedule and organize your content throughout the year to help ease some of the stress on yourself or employees.
Identify Areas for Employee Development
As mentioned, many organizations conduct employee evaluation reviews at the end of the year. After completing the reviews, identify areas where employees may benefit from additional training. Investing in professional development opportunities can increase the efficiency and effectiveness of your team, helping to propel your business to greater success.
Assess any skill gaps and areas where training or support may help deliver better results. Try to anticipate the future skill requirements of your organization based on the goals that you set for next year.
You should also tailor development plans for each employee. Personalizing the development process can increase employee motivation and commitment to improvement.
Address Employee Concerns and Happiness
Along with identifying ways to help train your employees, find ways to address their biggest concerns. This may involve implementing wellness programs or addressing any safety concerns in the workplace.
You can learn more about employee concerns by maintaining open communication channels. Foster a culture that encourages employees to speak up when they don’t feel comfortable with something. Actively listen to the needs of your employees. Give them your full attention and empathize with their concerns. When addressing an issue, try to find the root causes.
Resolving underlying issues may keep the problem from recurring. Always involve employees in finding solutions to problems. This shows that you value their input, which can boost morale.
Don’t Forget to Celebrate Achievements
While a business owner needs to complete a thorough year-end review, you also need to take the time to recognize hard work. Celebrate the achievements of the year, including all business successes and milestones reached.
Here’s a quick look at the reasons why you should celebrate the achievements of your employees:
Acknowledging the efforts of your employees encourages them to continue excelling. It creates a more positive atmosphere and improves employee engagement, all of which are essential for your success in the coming year.
Last Thoughts on Setting Business Resolutions
These end-of-year tips are just a starting point to help you reflect on the year and start planning for 2024. However, as a business owner, you may not want to wait until this time next year to repeat these steps. Consider performing quarterly reviews. Continually look for areas that need improvement, address concerns as they arise, and recognize the great work of your team!
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.