I am not sure about you, but the months of December and January can be a stressful time for a business owner. It’s a time when we must truly analyze our business, determine if we are providing bonuses, and start planning for the next year — and with a positive holiday disposition. In this and the following two blog posts, I am going to share some of my secrets and strategies to make this process efficient, accurate, and predictable to help guide you toward a successful new year.
Part 1: The Year End
Looking at your numbers.
Every month, I create at least a profit and loss report using my QuickBooks accounting software. At the end of the year, it is imperative to not just look at the month of December, but also to stop and evaluate the entire year. Pull a snapshot report, and look at trends. These are some that I follow: an income and expense trend, a previous year income comparison, a previous year expense comparison, and an expense breakdown. These reports are simple to read and will provide you with a greater understanding of how your business is doing. Did you make your goals? Did people stay within their budgets? Go back, look at your strategy for the previous year, and see how things truly played out. Make sure your team is pulling reports for you, and hold each team member accountable for doing so. I encourage my clients to do this routinely throughout the year, but if that isn’t possible, this is the time to follow up.
Looking at your team.
We complete annual reviews for our employees on the anniversaries of their employment start dates. At the end of the year, I assess if we made our bonus goal and decide who gets how much of a bonus. This is all based on the figures I calculated at the beginning of the year, and their portion is determined by how their performance throughout the year helped us reach our goal. If we didn’t make it, I decide whether staff get a “holiday bonus,” or not, and if so, how much. We have had some amazingly productive years and some where we just made the mark. Regardless, I feel that my team always has done its part to help the practice grow, so I give holiday bonuses. No matter how bad the year is and how much pressure you feel like you are under, December is not the time to cheap out. Make the month special in some way — if not with money, then with a special event to celebrate everyone’s hard work! If you are having a hard time awarding a member on your team, maybe that’s a sign that he or she shouldn’t be with you any longer.
Committing time to review.
Each December, I go on a date with my QuickBooks accounting software to a coffee shop to complete the tasks that I discuss above. While finding the time to do this around the holidays may not be easy, the peace of mind of achieving clarity when it comes to understanding your business’ finances is priceless and an absolute necessity for success.
Be on the watch for my follow-up blog posts to complete this series! Happy 2016, and best wishes to you, my colleagues!
Published originally at The Daily Grind.