6 Year-End Reviews For Small Business Owners
As small business owners prepare for the end of the year, it’s important to review the company’s fundamentals to wrap up this year and start planning for the new one, which may involve hiring new workers or obtaining working capital. However, as more customers begin pouring into retail outlets and making demands on small businesses around the country, many entrepreneurs might find their time stretched thin. In a scenario like this, some owners might think it wiser to delay their year-end review until the holiday shopping season finishes. Despite being strapped for time and possibly resources, the truth of the matter is that pushing off year-end responsibilities to the new year could potentially cost a lot of money in terms of missing out on tax credits or deadlines.
With November wrapped up and December beginning, here’s a list of items small business owners should examine before we ring in the new year:
- Review the lease and space requirements
Even though a company’s lease might not expire at the end of the year, now is the perfect time to review your lease and space situation to determine what and when your next move should happen. Often, lessees need to inform the landlord several months ahead of time if they plan on moving or exercising the right to renew.Owners should spend some time taking a look around and examining the company’s space needs. Do you have plans to hire new workers next year? If so, will these individuals fit in your current layout? Do you plan on scaling back operations? Perhaps the company is transitioning from a paper-based system to purely digital, eliminating the need for bulky filing cabinets. With the right amount of planning, business owners can discover they’re using up more space than they need and potentially reduce rent charges.
- Review vendor agreement
Now is the perfect time for small business owners to pull out the various agreements and contracts they have in place with vendors and take a good look at them. Much like an office lease, even if the agreement is not set to expire for a while, it’s wise to make sure vendors used in the new year align with any changes in the business strategy.
- Review equipment leases
Many businesses of all sizes take advantage of the many benefits provided by leasing equipment. According to Practical Ecommerce, these leases often have very strict deadlines for when to terminate the agreement, particularly for items like copy machines and automobiles. Further, companies using outdated or heavily depreciated equipment and machinery, now is a good time to see if any upgrades are possible. Financing new, more efficient equipment can potentially lead to considerable savings in the long run, since it can reduce downtime and speed up production.
- Review tax deductions
The savvy business owner understands that now is the perfect time to start compiling and seeking out all the available tax deductions for the organization, like Section 179. According to Intuit Quickbooks, owners should take the time to invest in upgrading, repairing or remodeling the office, improving tech equipment and even ordering new batches of basic office supplies. In addition, owners can hand out employee bonuses to those individuals who truly shined throughout the year. Owners can deduct all of these expenditures as tax write-offs, which ultimately reduce the company’s tax burden when April rolls around. Taking it even one step further, owners can even pay their January utility bills and include that in this year’s deductions.
- Review your support team
Small business owners should schedule some time to meet with the team that helps keep the organization operating, such as the CPA, attorney, insurance agent or other professional involved in ensuring the company’s health. Since many small businesses have limited employees, many of these individuals will be outsourced to external consultants. Seeking out their insights can assist owners in planning out their course of action for the upcoming year.
- Review your goals
While some people might prefer to make resolutions, business owners should also consider setting goals for the year. This could be both a personal and a professional goal. By having an actual target to aim for, whether it be increase sales, win an award or convert a set number of potential customers, owners have an easier time visualizing the end result and working toward reaching that goal. Encourage employees to also set both a personal and professional goal. In addition, owners can also consider holding a company-wide meeting to get everyone in the organization aligned with the company’s new goals for the upcoming year. Incorporating employees into the decision-making process not only boosts personal involvement and invested time, but it also increases the chances of accomplishing these goals since people can take more responsibility and initiative when they know they’re working toward.