As an entrepreneur, you always have a lot to do, and little time in which to do it. However, the beginning of the year provides you with a unique opportunity to stop, breathe and evaluate. And the smartest small- to medium-sized business owners always take advantage of it.
Before your charge on ahead into the new year doing business as usual, check off these four very manageable but equally essential tasks:
Confront your weak points.
Understand your finances.
Examine industry trends.
Combined, the four tasks on this beginning-of-year checklist will give you a holistic perspective on your company, no matter its stage, that’ll allow you to seize the year with success.
1. Set goals
The idea of setting goals might seem trite — of course, you want to accomplish big things. But if you’re not the kind of entrepreneur who really puts the things you want to achieve down in writing, make this the year you’ll do it.
Setting goals isn’t just about saying, “It’d be cool to make a million dollars,” though.
Look into well-established systems of team productivity and goal setting that other companies use to achieve results.
Additionally, look into different tools and project management processes to help you achieve these. It’s not enough to just set goals. You have to move your organization toward implementing the infrastructure to support achieving them, too.
2. Confront your weak points
Alongside setting goals, it’s also important to consider what you’re just not great at. You don’t grow by doing the same things you do well over and over, and continuing to stay bad at the things you struggle with.
At the beginning of the year, commit to understanding why you didn’t succeed in certain situations in your prior year.
- Did you make poor financial decisions?
- Did you not respond to changing market conditions?
- Did you not price appropriately for your customers, or fail to establish a dependable recurring revenue model?
- And how about your leadership — how can you improve there?
If you find you have obvious knowledge gaps, invest in a class or find a mentor who can help you get over the hump and improve. It’s not always fun to get tough feedback or look introspectively at your mistakes, but it’s important before you jump head first into a new year.
3. Understand your finances
The nice thing about a new year is that you have to wrap up your financial statements: P&L, balance sheet and cash flow statement among them. Don’t just send them off to your bookkeeper to process and send off to the IRS, or run them within your business accounting software, though. You have to understand the stories they tell.
For instance, ask yourself these questions:
- Over the past year, have you managed your cash flow well?
- Did your investments pay off and create the ROI you expected?
- Are you going to need to replace any equipment or hire new staff?
- Based on your forecasting, will you generate enough revenues to cover anticipated expenses?
Before you begin the year, know where you’ve been — and where you’re going.
This is also essential from a business financing perspective. To get the best rate on a small business loan, you want to be able to apply for funding before you need it, not when you’re in an emergency. If a deep audit of your financial position for the beginning of the year reveals, for instance, that you need more working capital, start getting your documentation together sooner rather than later.
4. Examine industry trends
It’s important to know how to react to changes in your industry or sector as a business owner. But if you can be proactive — well, that’s much better.
Don’t begin the year without getting a real pulse on what’s going on with not only your industry but also every industry that has bearing on yours.
For instance, if you make and sell wool sweaters internationally, you shouldn’t just look at wholesale and retail clothing trends. You also want to look at the price of your raw materials, including wool and dye, and fuel for the ships and planes that carry your goods. You might even want to keep an eye on the length of seasons — are people even wearing sweaters as often as they used to? Maybe you need to introduce a lighter-weight thread into your product line, or try to open up distribution domestically, based on what you find.
Either way, you’re making proactive decisions.
Ready to start the year with a bang?
Of course, there are a million things you’d like to do to give your business a fresh coat of paint, so to speak, at the beginning of the year. But if you can focus on a few vital stats and make improvements, a little just might go a long way.