We’ve all heard that you need to work both on your business as well as in your business. But we also know what happens: you spend 40+hours a week “making the donuts” and never have enough time to step back and really look at your business. If you know this feeling, I want to stress how important it is to take the time for a 360-degree view of everything. By doing a mid-year review, you can get ahead of some of the biggest small business challenges before they get worse.
Reviewing Business Goals Mid-Year
Six months into the year is the perfect time — with just yourself or with your advisory board, a business-savvy friend, or personal coach — to have an honest review of what’s going right and what needs improvement. Hopefully you did some business planning at the end of last year and set some goals for this year: e.g. opening another location, hiring more people, or adding new technology. Now’s the time to see if you’re on schedule to complete your goals.
One small business challenge is not having a budget or not tracking progress against your budget. As part of your goal-setting process, you should have prepared a financial budget so you can now track your performance of actual income and expenses against your plan. Numbers don’t lie; they’re going to tell you whether you are ahead of budget, behind budget, or on target.
This is also the time to adjust your plan if necessary. If your revenue goals are not being met then you may need to either cut some overhead expenses so that you can stay focused on that net income level or put more effort into growing the revenue.
Setting the Stage for Next Year’s Business Planning
Planning is another way to manage the challenges of small business. By reviewing where you are now, you’ll be ready in the fall – the October/November timeframe – to create your wish list, aka a strategic tactical list, for next year. This is why it’s crucial to ask now, “How am I doing? Do I need to run harder? Do I need to catch up?” “Things that are not getting done, why?”
By figuring out the root cause, while also starting to think about early planning for next year, you can make the most efficient use of your time. To do this, however, takes planning. Whether it’s for your business or your personal finances, I’m all about the plan. Preferably a simple plan, because people stick with simple plans. Beyond that, you then have to be willing to do an honest assessment on how you’re doing on the plan, and update as necessary.
Gathering Expert Advice & Employee Feedback
I also recommend that business owners bring in outside advice. The people who work directly for you may not be comfortable giving you 100% clarity; therefore, you need to find other opinions. You want someone to challenge you to make your business grow, to make you grow, and to get you outside your comfort level. Great people for this role are an outsourced CFO, your CPA, your business coach, maybe your attorney, and/or someone you trust as a mentor.
Also try to identify a person in your industry who sold their company and ask them to be on your advisory board. Always be looking for people who can really add to the business, add to your thought process, and push you to think outside the box. You want every opportunity for open and honest discussions, even if you end up dismissing some ideas and strategies.
Open and honest discussions with your employees are also important. If you have a VP of sales, he or she should be aware if the business is or is not making the numbers, both financial and units. That information feedback loop only makes them better. The people in charge of different departments or cost components of your business should see the financial results relating to their specific area of control. That doesn’t necessarily mean that you show all the financial statements to everyone in the company. You’re showing selective information on a need-to-know basis. Let’s face it, if your employees are operating in the dark, how are they going to get better?
Don’t wait… tackle your biggest small business challenges now
By doing a six-month review, you can put out the small fires before they engulf the house. Earlier in my career, I was often the fireman. Business owners didn’t call me when things were going great; they called me when their house was ablaze. Believe me, it’s much better to check for smoke now so you have a firm control of your business before things go wrong.
Achieve your goals, from early retirement to selling a business
Everyone’s situation is different; what it takes for you to be financially independent is unique to you. If you’d like to discuss any questions or concerns you have your financial life, please contact us for a no obligation consultation to see how we can help.
Want to be notified about future posts and podcasts? Click here to subscribe
Your Business Plan is not Your Financial Plan
Less than 20% of businesses sell within a year and most sell for less than the owner expected. With statistics like these, now is the time take a realistic look at the relationship between your business plan and your financial plan, regardless of how close you are to retiring. With planning, you can enjoy the financial benefits of your business, whether you sell or not.
Always Be Changing: Driving Growth Through Change
Whether you experienced a year of growth or endured a year of just getting by, repeating what you did last year is not a strategy. What can you do differently to make this your best year ever? This seminar focuses on driving growth through change including financial strategies, cultural change, accounting and tax considerations, and sales and marketing ideas.