It is all too common for small business owners to work in their business and not on their business. After all, their passion for the product/service got them this far. However, it is a very good idea to do a year end retrospective; find out what worked really well and keep doing more of it. Find out what didn’t work so well and fix it. So, where do you begin?
Let’s take a look at the business operations first and then look at legal formalities.
Core activities (What you do and who your market is)
- Which products were most profitable? How do you optimize them?
- What products are failing? Can you make changes to enhance them?
- Are your products still aligned with your target market? Has your core customer base changed? What market forces have impacted your customer base? Do you need to do some market research?
- If product profitability is an issue, what can you do to optimize your cost base?
- What do your customers think of you? How “customer-centric” is your approach to business?
Sales and marketing review
- How does your sales performance and marketing ROI measure up against your goals and business plan?
- How does your business benchmark against the competition?
- Have you done a SWOT (Strengths, Weaknesses, Opportunities, threats) analysis?
- Are annual performance reviews constructed and done?
- Have you created employee performance development plans?
- Do you have a budget and do you stick to it?
- Is Cash Flow tracked? Is it sufficient?
- What is the state of your Gross Profit Margin?
- Have you reviewed your cost base and pricing? Are any adjustments needed?
- Are you carrying debt and managing it?
- Are you doing year end tax planning and maximizing your deductions?
If you are a legal business structure (e.g., corporation, Limited Liability Company), there are certain annual corporate formalities that must be adhered to. Generally, every state has State Statutes that define these requirements. If you don’t know about yours, check with your State government, usually the Secretary of State. Following are some of the more common ones.
Corporate annual requirements (Review these and determine if any changes are needed based on your business today)
1. Articles of Incorporation (corporation) or Articles of Organization (LLC)
3. Operating Member Agreement (LLCs)
4. Status of stock shares issued
5. Corporate Bank Resolution
6. Annual Shareholders Meetings
7. Annual Board of Directors Meetings
8. S-Corporation Election
Other business documents
1. Employment contracts
2. Officers compensation/bonuses
3. Medical insurance review
4. Employee expense reimbursement policies
5. Travel reimbursement policies
6. Personal use of auto policies
7. Buy-Sell agreements
8. Building/equipment leases
9. Renewal of licenses and permits
10. Business insurance
11. Employee/officer life insurance
12. Supplier/contractors agreements
Many may not require any changes, but it is a good idea to review them as a standard year end practice.
If you need additional assistance, check with your local Small Business Development Center (SBDC). They have experienced business professionals who can provide no-cost one-on-one consulting. Find your SBDC here.
FOR ADDITIONAL INFORMATION CLICK THE LINKS BELOW