Every business operates on a fiscal or calendar year, but most people think of January 1st as a date to set new goals. Regardless of how you operate as far as your financial calendar, December is a universal time to look at how the year went and where you want to improve your business and your life next year. Here are 5 topics to consider:
What positive and negative experiences did I have in 2020 that I could learn from in the future?
Reflect on 2020 and make a list of what you did well and where you failed. It's okay to fail; its how we learn and grow. An example of failure may be losing a key employee or key client for reasons that could have been prevented. A potential success could be adding curbside service to your business, or maintaining employee and customer safety standards that were effective. Can you put together a strategy that embraces your successes and challenges? In most cases, we all need to be prepared for 2020 COVID-related challenges to persist through at least the first two quarters of 2021, if not longer. This requires "thinking outside of the box" to brainstorm how you could have done better and examining your industry and competitors to adopt best practices.
Could I have been more prepared for the curve balls of 2020?
Am I suggesting that you could have anticipated a pandemic? Of course not! The question is more around an accurate and thorough SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis. If you're not familiar with this type of analysis (or other similar analyses), it's a framework for approaching your business and preparing strategies to maximize opportunities and strengths while being prepared for weaknesses and threats to your business, industries, and the economy as a whole.
Legal and tax related changes that impact my business.
Every year, January 1 brings about new tax laws. Some will be implemented during the year, but many take effect in the first quarter. If you are a Colorado business, an example of this is the Colorado Secure Savings Plan (https://leg.colorado.gov/bills/hb17-1290). This is a required retirement plan provision for businesses with at least five employees and that have been in business for two years or more. If you are a small business owner, you need to be ready for this. Eight states adopted mandatory retirement plans in 2019 and more will follow. Other examples of this is changing minimum wage laws and other business related expenses.
Am I in a growth or maintenance phase?
If your business is under five years in age, you are likely in a growth phase, although many established businesses are also in growth phases due to happenings in their industry or the economy. If you have an established stable business and are happy with the monthly profit, you may be in a maintenance phase. If that is the case, you have maintenance goals to consider, such as retaining key employees and your customer base. Also consider if you are approaching maintenance phase and what you need to do to get there.
Should I consider downsizing or outsourcing?
Certain industries will forever be impacted by changes that have occurred during the pandemic, such as increased virtual work. Do you have a large office for your headquarters that could be downsized to reduce overhead? There are many areas where you may want to consider efficiency as a goal. Lowering fixed expenses and retaining employees and revenue is a great goal to have.
What about outsourcing some of the functions that you either don't do well, aren't addressing at this time, or are too expensive to keep in house? Outsourcing sometimes gets a bad name, however it sometimes can help you get around growing your staff and the responsibilities and expenses that come with it. It also opens you up to the possibilities related to hiring an expert that you cannot afford to employ full time.
Hope this was helpful! We are always happy to answer your questions about how we can help you apply some of these topics to your business.
