Small business owners are often spread thin over the holidays, balancing the competing demands of the busy shopping season and responsibilities to family and friends. And while entrepreneurs may be tempted to let some tasks slide into the new year, the truth is that Q4 is a great time to reflect on your business’ successes while identifying areas for possible improvement in the new year.
By accomplishing the tasks below before the end of the year, small business owners can do their part to ensure 2015 is the most profitable and productive year yet.
1. Assign Employee Bonuses
Did your business have a better-than-average year? If so, you may want to consider spreading a little of that good cheer to your employees in the form of holiday bonuses.
Before handing out those all-important checks, sit down with your employees to discuss their performance over the past year. By asking top performers about their career goals, employers can show they care while increasing the odds that team members remain with the company in the long term. Encourage your best workers to take a larger role, and see your business grow in the new year.
Assigning bonuses before the end of the year is also a good way to minimize your company’s tax burden in 2015. When you pay out bonuses before the end of December, you can deduct them from that year’s revenue, reducing the amount of tax dollars you will owe come April.
2. Compile Tax Deductions
Of course, deducting employee bonuses isn’t the only way to lower your tax burden for the coming year. The savvy business owner knows that the end of the year is a great time to start seeking out all possible tax deductions for the company.
Along with paying off outstanding debts, small business owners should also make investments in office upgrades, including repairs to your space, improved tech equipment and even new batches of basic office supplies, among others. To further reduce your tax burden, consider writing checks for January’s electric, phone and gas bills early, so you can declare these deductions on 2014’s tax forms.
The end of the year is also a good time to consider hiring an accountant for the year to come. By finding a financial advisor before the end of December, you can rest assured knowing your books will be in good shape from the first day of the new year.
3. Assess Business Performance
Along with prepping for the upcoming tax season, small businesses should endeavor to assess company performance before the end of the year. During the majority of the year, business owners are focused on weekly and monthly metrics, such as labor costs, sales, profits, etc. However, in Q4 it’s important to consider annual reporting as well, including overall profits and losses, balance sheets and cash flow statements.
If your business struggled to stay in the black this year, you may need to identify ways of cutting expenses, such as changing suppliers or reducing the size of your permanent staff. For a clearer picture of your company’s performance, consider benchmarking your data against that of your competitors to assess your business’ health and to determine if changes need to be made in the new year.
Additionally, many businesses utilize a SWOT analysis to measure strengths, weaknesses, opportunities and threats facing their companies. Not only does this technique allow you to capitalize on potential business opportunities, but it also prevents you from being blindsided by threats to your business in the year to come. You can use this data to kick off your business and marketing plans for 2015.
4. Set Goals for the New Year
Of course, December is also a great time to make resolutions for the new year. As a small business owner, it’s important to set goals that are ambitious yet realistic for you and your employees.
The “SMART Method” is a popular technique to assess goals, and it can help businesses determine whether their goals are specific, measurable, attainable, relevant and time-bound. (Some people also add an “E” and an “R,” standing for evaluating goals and rewarding yourself for a job well done, respectively.)
Consider holding a company-wide meeting to ensure everyone is on the same page in terms of goal setting, and create a list of action items to help make those goals realities. By involving employees in the decision-making process, you can boost their levels of investment when it comes time to reach those goals.
Additionally, small business owners can use Q4 as an opportunity to set personal goals. If you’ve been promising your spouse a family vacation for the last few years, resolve to make it happen in 2015. While employees may miss you in the short term, the company will ultimately prosper if its leader has time to rest and rejuvenate. This will also give your team a chance to prove they can handle operations in your absence, which will give you more confidence to take time off in the future.
The holidays are a notoriously busy time of year, and small businesses may be tempted to rest on their laurels come December. However, small businesses can gain a leg-up on the competition by accomplishing the above tasks before the start of the new year. Get your business in order before leaving for your holiday break, and rest assured knowing the coming year will be a success.