Post by: John Rampton | Entrepreneur | Published on: 11/22/2016
As 2016 winds down, it’s time to start planning for 2017. For business owners this means getting financially prepared for the new year by following 25 ways in order to keep your business up-and-running for the long haul.
1. Revisit your business plan.
If you’re already a business owner then you probably have a detailed business plan that covers;
- A summary of your business.
- A description of your company.
- A market analysis of your competitors.
- The structure of your organization.
- A description of the products/services you sell.
- How you’re marketing your business.
- Financial projections.
This information is needed to not only guide you when making business decisions, but also if you need to borrow money from a lender. Even though most well-thought-out business plans are good for three to five years, it wouldn’t hurt to make sure that your original plan still fits your current business situation.
2. Gather necessary information for a business loan.
Speaking of loans, lenders will also require the following information;
- Business licenses, if applicable
- Personal and business tax information
- Personal and business bank statements
- Income statement and revenue information
- Detailed financial projections
Even if you’re not currently looking for a loan, it’s better to have this information handy so that you’re not scrambling to put it together when you do need to borrow money.
3. Focus on profitability.
One of the most common mistakes that business owners make so that when they put money back into their company it’s only to grow. Instead, companies should be focusing on how to become more profitable. That’s because they grow too quickly and end-up having cash flow problems by doing things like hiring too many people but not enough revenue to pay them.
Either revisit or create a financial model by paying close attention to your expenses, assessing your marketing plan, building your projections from the bottom-up, checking results from the top down, and finding your breaking point. It may not be perfect, but those steps can guide you in boosting profits.
4. Set a savings goal.
By Jan. 1, 2017 you should have a savings goal in place. Remember, this goal should be measurable, achievable, realistic and timely. For instance, it could be establishing an emergency fund that can keep your business operational for three to six months if need be.
5. Evaluate your business processes.
Take a couple of moments to evaluate your business processes. This will let you see which areas are effective and running smoothly and which ones aren’t. For example, if you’re still using a paper-based invoicing system you should make the switch to a cloud-based system so that you can send invoices electronically and receive payments immediately.
6. Review your all of you insurance policies.
At the very least business owners should have the following insurance policies; personal liability, property, workers compensation, home-based, product liability, vehicle, and interruption. And, we don’t want to leave out health insurance as well.
Reviews these policies before the start of the new year. You may be paying for unnecessary coverage or there may be more favorable policies available from competitors. Also, depending on your business and its size, you may be required to purchase new policies that you weren’t aware of. If you get caught, you may be penalized.
7. Keep up on new tax rules and regulations.
There may not be major changes every year, but it’s important to pay attention to any new federal, state, and local tax rules and regulations. It could be anything from filing dates, increasing or decreasing tax rates, what can or can’t be deducted, and how much you can contribute into your 401(k) or Roth IRA.
IRS.gov does a decent job of keeping people notified of any changes, but it’s in your best interest to speak with a tax specialist before they get swamped.
Reference Article: https://www.entrepreneur.com/article/285550