Mr. Rampton correctly begins his list with revisit your business plan. I am a strong proponent that every entrepreneur should create a business plan, a topic that I have addressed in previous posts, and business owners should use the beginning of the year as a time to "make sure that your original plan still fits your current business situation."
A business should focus on profitability. As Mr. Rampton explains: "Either revisit or create a financial model by paying close attention to your expenses, assessing your marketing plan, building your projections from the bottom-up, checking results from the top down, and finding your breaking point. It may not be perfect, but those steps can guide you in boosting profits."
No matter how great your attorney or accountant is, a business owner should keep up on new tax rules and regulations. "There may not be major changes every year, but it's important to pay attention to any new federal, state, and local tax rules and regulations," writes Mr. Rampton.
"If you do not know your numbers, you do not know your business" is a theme that I often say to my colleagues. Therefore, I appreciate start monitoring your monthly expenses and create a budget and stick [to] it. Tracking "every single purchase," according to Mr. Rampton, "lets you know how much you’re spending on your expenses and where to start trimming the fat if you're overspending.
Importantly, tracking your expenses "lets you know if any of your accounts have been jeopardized to cyber-attacks if you spot any unauthorized purchases. This not only gives your total control of your money, it's one of the most important steps when creating a budget."
In my 20+ years of business experience, I have become to appreciate the value of having a realistic budget. As Osmond Vitez notes in an article entitled, "Why Is it Important for a Business to Budget?" "Budgets usually represent a detailed analysis of how a company expects to spend money in future time periods. . . . Using an annual budget process also limits the amount of time companies spend creating and managing capital resources."
Lastly, I strongly support that a business owner should stay organized. You must have "a system in place so that all of your records are organized," says Mr. Rampton. "Take your invoices, for example. When they're organized you can see which invoices have been paid and which are pending. You can also have them handy in case you get audited. Thanks to the cloud, most of this information is started in one convenient dashboard automatically."
How are you preparing your business for the new year? What would you add to this list?
- Revisit your business plan.
- Gather necessary information for a business loan.
- Focus on profitability.
- Set a savings goal.
- Evaluate your business processes.
- Review your all of you insurance policies.
- Keep up on new tax rules and regulations.
- Be aware of salaries in your industry.
- Take advantage of cash accounting.
- Declutter and get tax deductions.
- Research financial institutions.
- Draw on your bank credit line.
- Evaluate your product lines.
- Look for ways to generate recurring revenue.
- Make saving automatic.
- Challenge the status quo.
- Have collateral ready.
- Ask your customers to purchase higher priced items or services.
- Start monitoring your monthly expenses.
- Create a budget and stick [to] it.
- Cut costs, even if revenue is solid.
- Shop around.
- Evaluate the ROI of your sales and marketing efforts.
- Stay organized.
- Meet with an accountant or tax advisor.
Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of Solutions for a Sustainable World.