It has been a rocky year, but the end of 2020 presents an opportunity for business owners to look back on the past months, learn from mistakes, and plan for the year to come. Take this time to set new business goals and prioritize the tasks that will help you achieve them.
Business owners should perform certain organizational and maintenance tasks once a year, at the very least. You can use these projects as starting points for making 2021 the best year yet for your business:
Sit Down with Your Accountant
It’s smart to check in with your finances and bookkeeping at the end of the year. First, take a look at the bottom line: what did you bring in, and what did you spend? Look for areas where you could improve, beyond the obvious of bringing in more business. Where can you spend less without compromising what you offer customers?
Your accountant can help you look through more complicated finances, like taxes. Make sure you have paid an adequate amount in estimated taxes, and if not, get caught up. You don’t want to face penalties. Also, discuss with them any major purchases you’re considering for the upcoming year.
Conduct Employee Performance Reviews
Schedule meetings with each and every member of your staff to conduct year-end performance reviews. The year’s end is a good time to discuss where employees could improve and reward them for a job well done. Talk about their goals within their role and what their future looks like with the company. They’ll appreciate your time and interest, and of course, the reviews will help you identify where your staff could use some changes.
Reassess Your Insurance Policies
Insurance is a hefty but necessary expense for small businesses. At least once a year, you should spend some time reviewing your policies to determine if you need more or less coverage. If your company has grown over the year, it could be underinsured in numerous areas, putting you at risk. There may also be opportunities to spend less on insurance. At the end of the year, go over all your policies and consider adding, dropping, or switching the coverage types you have, such as:
- Workers’ compensation insurance coverage
- General liability insurance coverage
- Commercial property insurance coverage
- Commercial auto insurance coverage
- Errors and omissions insurance (also known as professional liability insurance) coverage
- Business interruption insurance coverage
- Cybersecurity insurance coverage
You may also want to consider bundling your separate policies for property insurance, business interruption insurance, and liability insurance into a single business owner’s policy. Having a BOP may save you money, and the time it requires to handle multiple policies.
Review Vendor Contracts
Another area of spending where you may be able to save is with vendor contracts. For instance, if you only work with one vendor for a certain product, they may be able to give you a better rate next year. Review each relationship and contract and decide if it’s working for your business. If not, don’t be afraid to seek new vendors or make changes to existing contracts.
Analyze Your Energy and Utility Use
If your business operates out of an office, warehouse, or manufacturing facility, utility costs can add up quickly. Take a look at your bills from the previous year because you may find room for improvement. Based on your findings, make a plan for conscious energy consumption for the upcoming year. Here are some tips for saving on energy and utilities:
- Invest in a professional energy audit to find potential savings.
- Lower energy usage at night.
- Use power-saving modes on electronic devices and motion detectors on lights.
- Fix any air leaks to save on heating.
- Install energy-efficient light bulbs.
- Keep heating and cooling equipment well maintained.
Investigate Your Inventory
An inventory assessment will give you an idea of what you have, what you need, and what you do not need to purchase. Businesses can potentially save a lot of money by merely knowing what they have in inventory, as it’s easy to waste money buying more of what you don’t need.
By looking at your inventory, you will also get a better sense of what customers want. What did they buy the most? What didn’t sell very well? You can use this inventory information to make changes to product offerings next year.
Backup All Files and Data
Backing up files should be a regular task, but it’s a good idea to do a major update at the end of each year. If you haven’t yet, start using at least two methods of storage and backup. If you use external hard drives, add cloud storage, or vice versa.
Take Time to Prepare Now for a Better 2021
No one likes chores, but for the health of your business, it is essential to take the time to complete these tasks. Organize your business and perform these maintenance tasks to set the tone for next year. As you work through them, decide where you want your business to go and set achievable goals.