10 Point Year End Business Inspection Every Business Owner Should Make

Annual check-ups aren’t just a good idea for people. Use this ten point year end small business checklist to be sure that your organization is ready for success in the New Year.

Small Business Year End Checklist Can Show the Health of Your Business

It’s tempting to “set it and forget it” when it comes to many of little things it takes to keep a business running from day to day, but if you do not review the details from time to time, it could be costing your organization in terms of money, resources or efficiency. The year end is a great time to run a checklist. Here are ten things every business owner should review before the end of the year in order to prepare for success next year.

As year end approaches, it is a good time to benchmark the progress that your organization has made in pursuit of its long term goals so far this year and what it will take to reach them. In the process, you may discover that you could grow faster and achieve long range planning goals by improving efficiencies, lowering costs or adding value in the strategic partnerships you have with vendors and suppliers.

A 10 Point Year End Small Business Checklist to Position Your Business for Success in the New Year

First, establish a base line for your year end business inspection by asking and answering these four questions:

• Where did you start the year?
• What did you accomplish?
• Where are you falling behind?
• Why?

Based on your findings, assess whether there are areas where a tweak – or a complete overhaul – could help you grow your business faster and achieve the goals you set out to attain in any or all of these areas.

1. Customer satisfaction and churn

The rate of customer churn – how many are leaving and how long on average they stay – may well be indicative of problems in other areas of your operations. Any aspect of operations which negatively affects the customer experience could be causing customers to leave, or they may be leaving for more attractive competitors.

It’s not just about repeat business! A high customer churn rate usually leads to high cost of customer acquisition endeavors as dissatisfied customers may be influencing prospects away, fail to produce referrals and more and more money must be spent on marketing and sales activities needed to land new clients.

2. Employee satisfaction and churn

High rates of employee churn – like customer churn – can be very costly for a business. Beyond costs for recruiting, hiring and training, there is also the lag time in productivity due to the new hire’s learning curve and consequent impact on the customer experience. Employee churn could also be indicative of poor leadership within the organization. If the wrong people are in place, it’s likely that they lack in more areas than leadership skills, and could be making less-than-the-best decisions that negatively impact other operational areas as well.

3. Training and development

Productivity, efficiency and both the customer and employee experience are all directly impacted by the level of training and education attained by staff. The year-end is a good time to assess whether there are training or knowledge deficiencies within your organization and lay out a plan to correct them.

Investments in employee training, education and professional development are not just about making corrections, either. These investments have the potential to significantly improve employee satisfaction and buy in, increase employee contribution to organizational improvements and improve the customer experience (and, therefore, boost customer satisfaction).

4. Staffing

Have you simply been re-filling job openings as they arise? The marketplace is constantly changing, customer needs and expectations are constantly changing, and new opportunities are constantly emerging. Now is a great time to look at the organizational chart and determine whether reorganization is called for.

Additionally, the question of staffing is more than about whether all of your positions are filled. There may be areas of redundancy that can be eliminated, tasks that can be consolidated and job descriptions that need to be revised. Honest assessment of staffing, work load and workflow may also reveal where your organization has individuals who are not right for the role they are playing as well as individuals who are ready to step up and take on a higher level of responsibility.

5. Vendors and suppliers

Relationships with vendors and suppliers may be on demand, month to month or locked down (more or less) by long term contracts, many of which have auto-renewal clauses. At least once each year, calendar a time for vendor review that gives your organization an opportunity to provide them with a performance assessment, request for improvements or modifications, request for pricing review and a chance to get competitive quotes.

Price may not be a compelling reason to change vendors, especially if your supplier is providing a high level of service and added value, or if the change would negatively impact customer or employee satisfaction. However, it still may be a good idea to get some competitive quotes as that may provide leverage for your preferred suppliers to offer you better terms or lower pricing.

6. Projected taxes

Next year’s tax filing deadline will be here before you know it! Take time to calculate or speak with your finance professional to determine whether your projected tax responsibility indicates the need to make organizational adjustments now.

7. Operations

Obviously depending on the size of your organization this could be a huge area where potential cost savings or efficiency improvements could be found.

Each department or area of operation within your business should have metrics in place that help you identify areas where productivity, performance, expenses and other key performance indicators (KPIs) are slipping, and year end is a great time to look at these numbers as you’re planning for next year.

Analysis of KPIs should be done on a regular and consistent basis; however, at least once each year it’s important for the CEO, board and management team to review these metrics as a whole, measure against progress and make adjustments as needed.

8. Marketing and advertising

While marketing and advertising are operational costs, it’s worth giving them their own berth in our list. Marketing and advertising are one of the few costs of operations which should be having a direct impact on customer acquisition, satisfaction, loyalty, churn, employee hiring, satisfaction, loyalty, buy-in, churn, etc. Not only should marketing be providing measurable returns, the return provided should outweigh the investment required.

Gone are the days when the business owner needed to despair that while he knew that half of his marketing was working, he was not sure which half it was. Like any other area of your business, marketing should have measurable goals and KPIs which are consistently assessed. At least annually, marketing should get a chance to provide the CEO, board and/or management team with an overview of the progress and achievements made over the course of the year and the direction and priorities in plans to pursue in the New Year (in alignment with overall organizational goals).

9. Business financing

Business financing is about more than just balance statements; it is also about assessing how much working capital an organization needs to pursue its strategic plan, and where that money will come from. Year end is a great time to review the performance of on-going working capital financing such as receivables invoice factoring and determine whether it’s appropriate to obtain competitive invoice factoring quotes or ask for a factoring contract review.

If additional working capital is needed to achieve organizational goals, before the money is actually needed in hand it’s important to review the financing options that might be available such as small business loans (SBA loans), bank business loans, a business line of credit, a business cash advance or merchant cash advance, etc.

10. Strategic planning (a.k.a. long range planning)

We started this list with the strategic plan (also referred to as a long range plan) and we end this list with the plan, too! Having assessed where the organization is, where deficiencies are and how to correct them, it is time to invest leadership time into laying out the course of direction for everyone in the organization for the next 12 months and 3-5 years.