Our Year-End Checklist for Small Business Owners

The end of the year is a good time to review your financial performance over the past 12 months. A thorough financial review involves the following:

• Assembling key end-of-year reports for your small business, including your profit-and-loss statement (income statement), cash-flow statement and balance sheet
• Analyzing the data in your reports to assess your liabilities versus assets, cash flow and profitability
• Planning how to improve your results by taking steps such as cutting costs or paying off business debt

Schedule a review with your accountant to get help analyzing your financial statements and identifying which actions would be most beneficial to your business. You might also ask your accountant to schedule ongoing reports for you on a weekly, monthly or quarterly basis so you can keep on top of your financial performance throughout the year.

The end of the year is the time to start getting ready for your annual tax filings and devising ways to improve your tax strategy in the coming year. Here are action items that should be on your year-end small business financial checklist:

• Provide employees and contractors with required W-2 and 1099-MISC or 1099-NEC reports before the Jan. 31 deadline. (The end of the year is also a good time to make sure you have up-to-date employee contact information.)
• Check that your estimated tax payments over the past year remained consistent with your actual revenue and tax obligations.
• Verify you’re claiming all applicable tax deductions.
• Review whether restructuring your company could reduce your tax obligations.

Your tax adviser can provide you with guidance on handling these issues. 

Any end-of-financial-year checklist for small business owners should include a review of on-hand stock. After all, to prepare your year-end financial and tax statements, you’ll need to count the assets in your inventory. On the flip side, consider that lack of inventory management is a reason many new businesses fail.

To organize your inventory count, do the following:

• For accuracy, try to schedule your count when items are moving slowly and you can temporarily suspend shipping and receiving.
• Divide your inventory storage area into zones and assign pairs of workers to each zone, with one employee assigned to count items and the other assigned to record counts.
• Isolate items that need to be counted separately from regular inventory, such as damaged or outdated goods.
• Count items that move slowly and reserve stock before starting your regular inventory count.
• As workers count items, have them tag sections that already are counted and record a list of sections that have been completed.
• To double-check accuracy, have another team of workers or a supervisor do a full or sample count of areas that have already been counted.

To save time on your next annual inventory count, consider using inventory automation tools. For instance, connecting your point-of-sale barcode scanning system to inventory-management and accounting software can help you stay current with real-time inventory updates.

Updating your business plan at the end of the year — or creating one if you don’t have one — can put you in a position for better results in the coming year. A business plan should include the following:

• Executive summary providing a brief overview of the highlights of your plan
• Description of your company, its mission and its competitive advantages
• Analysis of your market and how you plan to position yourself against competitors
• Outline of your company’s organizational and management structure
• Description of your product and service lines
• Explanation of your marketing and sales strategy
• Financial projections, including key financial statements
• Funding request if you have financing needs

If you need help developing your business plan, the nonprofit organization SCORE provides access to a national network of experienced business mentors as well as business plan templates and other online resources.

If you want to generate more revenue in the coming year, improving your marketing plan is a good first step. For your small business year-end checklist, ask yourself the following:

• Are you pursuing measurable marketing goals, such as increasing your number of leads, social media followers or email subscribers generated each week?
• Is your company’s marketing plan based on market research rather than intuition or guesswork?
• Is your marketing message positioning your brand to stand out from competitors?
• Are the marketing channels you’re using the most effective ones to reach your target audience?
• Are you creating enough digital content to market yourself online?
• Are you conducting an end-of-year review of comments on your social media profiles to gain feedback from your target market?
• Is your website capturing enough leads from your online marketing campaigns?
• Are you doing follow-up marketing to email and social media subscribers?
• Are you cultivating repeat business from existing customers?
• Are you making efforts to win back inactive past customers?
• Are you tracking your marketing performance so you can identify underperforming areas and make adjustments and improvements?
• Are you using marketing automation tools to increase your efficiency?
  If you need help developing an effective marketing plan, consider hiring a marketing agency to assist you.

Marketing needs the support from sales to convert leads into revenue. To give your sales strategy a performance lift, consider these questions for your end-of-the-year business checklist:

• Is your sales team using a standard operating procedure to generate leads, set appointments and close sales?
• Are your sales representatives using sales scripts for each phase of the sales process?
• Is your team generating enough leads and setting enough appointments?
• Are your representatives following up on sales opportunities that failed to close the first time?
• Are you taking steps to generate repeat sales, cross-sells and upsells?
• Are you cultivating referrals?
• Are you making efficient use of sales automation tools?
• Are you tracking your sales performance?

If you’re underperforming in any of these areas, consider seeking professional sales training for your sales personnel.

According to a recent U.S. Chamber of Commerce report, 83% of small businesses will be increasing their use of technology. 

If you’re looking to improve sales or cut costs in the coming year, upgrading your technology can be a way to boost efficiency and results. Conduct a year-end review of your business processes and use of technology to identify areas that could benefit from upgrades.

Here are a few tech upgrades worth considering as part of your end-of-year business planning efforts:

• Migrating your information-technology (IT) infrastructure to the cloud
• Tracking your business performance with analytics software
• Adopting a cloud-based accounting software application
• Using an automated marketing platform
• Making your website mobile-friendly
• Adopting customer-relationship-management (CRM) software 
• Improving your customer service by adopting automated tools, such as chatbots and interactive voice response telephone systems
• Strengthening your IT security

Depending on your business model, you may identify other areas to upgrade.

With so many people browsing the web and shopping online, it’s important to ensure your website and ecommerce store are running smoothly. You can’t risk having a crucial page or call to action not work correctly. 

Keep in mind, 88% of users who have a bad website experience are less likely to return. Indeed, the experience a user has on your site can cause them to stay (and buy) or lead them elsewhere. Encourage the former by auditing your website and making sure your pages are as they should be, on desktop as well as mobile. 

While you could hire a company to do this, you can also do it yourself. Here are a few tips to try:

• Check your links, ideally all of them but at the very least your most critical ones, to make sure they work and point to the right page. 
• Call your 800 number and see what happens. 
• Send a test email to yourself from your contact page. 
• If you have a chatbot, give it a test run to see if it’s working properly. 
• If you run an ecommerce store, walk through a purchase. Add an item to your cart and continue through the checkout process. 

Keep an eye out for any areas that can be improved or instances where processes can be streamlined for a better user experience.

Another way to improve efficiency is to review your human-resources strategy. Routinely review all staff positions and business functions. See if any personnel changes might help your business. 

As you execute your small business end-of-the-year checklist, consider whether the following changes could be beneficial: 

• Outsourcing routine or specialized tasks peripheral to your company’s core skill set
• Enhancing automation efforts  
• Hiring part- or full-time staff to manage specialized tasks, such as administration, accounting, marketing or sales

With the year closing, it’s a good time to take a look at how you’ve performed compared to your desired goals for the year – what did you accomplish and how did you go about it? Also, be sure to celebrate your business wins with your team. 

Additionally, it’s a great time to set your goals for the new year. Here are a few questions to ask yourself: 

• If you met your goals, what can you do next year to exceed them?
• If you didn’t meet your goals, what could you have done differently? 
• What areas should you focus more on in the upcoming year?
• What areas can you scale back on?