It is almost that time of year again—year end. During my time working for various manufacturing companies, it always seemed to surprise managers that the year was coming to a close. Suddenly, it would be two weeks before the end of the year, and we would have to rush to get our annual reports and other stuff done. Don’t fall into this annual trap—plan ahead for the end of the year!
First, it is important to review some basic items:
Get any approved capital equipment in before the year ends. Depending on state laws and regulations, this may be a tax benefit for your company. Check with your CPA or tax specialist. Why leave money on the table if you need the equipment and have budgeted for it.
Start getting your documentation for the R&D tax credit ready.
Complete any approved hiring.
Make sure your invoices are paid up.
Check your warehouse for excess inventory. Remember, some states tax inventory levels at year end. Check with your CPA or tax accountant.
There are a few business items you have to make sure you take care of. Depending on the structure of your company’s fiscal year and finances, this may include taxes, loans, principal payments, etc.
Once you have made a list of legal requirements and collected the proper numbers, you should think about what you need to do to ensure your company is ready for the upcoming year.
To help you get started, here is a list of items to consider.
Is your business model still working as envisioned? If not, you may need to:
Consider customer needs, demands, volumes, and product mix.
Review your competition. What are they doing? Are there more or fewer?
Consider outside market influences, regulations, and rules.
Do a vendor review. What services helped you, and what services need improvement?
See what went well and where you have made progress.
Review things that didn’t go well and where you failed or lost ground.
Analyze your return on investment (ROI) and determine if it matches your forecasts.
Review your profit and loss (P&L):
Where are you financially?
Where did you make or lose money and why?
What is your competition doing?
Are they more profitable?
What new technology do they use?
What are they struggling with?
Review your business insurance to make sure you have the right coverage in place (e.g., cyber liability, equipment breakdown, etc.).
Plan for the next year:
Develop an operating budget, including:
Wages and benefits.
Trade show attendance.
Develop a strategic plan:
Set performance goals.
Review new and upcoming technologies, identify your needs, and determine what can help your business.
Do a SWOT analysis.
Review your hiring needs.
In addition to reviewing the closing year and planning for the upcoming year, there are a few other things you may want to consider.
Thank your customers for supporting you throughout the year. Without your customers, you wouldn’t be in business.
The same goes for your suppliers. Let them know you appreciate their support. Without them, it would be more difficult to meet your customers' demands. I still prefer old fashioned thank-you notes over emails. One of the companies I worked for had all department managers and executives sign a holiday card each year. It was a hit with customers.
Don’t forget your employees. They are the key to your success and convert your plans into action. Tell them what they have achieved and give them a sincere thank you.
The above list is in no way complete. However, it should give you and your team some ideas to ensure you are ready to close another successful year and ring in the New Year with some sound business plans in place.
If you plan, set time aside, and make a conscious effort—without cramming everything into the last two weeks of the year—your plans will be better and ultimately help you to be more successful. Planning is an important part of running a successful operation.