Can you believe that 2021 is almost over? Nope, we can’t either. But, as the owner of a small business, you’re probably worried about more than just how quickly time seems to be passing at this time of year. As Q4 comes to a close, you’re probably thinking about – and maybe stressing over – whether your business performed as well as it could have over the past year, where you stand right now, and how you can set yourself up for growth in the new year. And while we can’t promise simple answers or solutions (wouldn’t it be great if the business world was simple?), what we can do is lay out a checklist that will help you find the balance between looking back over the last year and looking forward to the new – no stress necessary!
1. Take a Step Back – and Celebrate the Year’s Wins!
This first step might not seem like the most practical bit of advice on the list, but it is so necessary to actively stay engaged with and excited about your business, otherwise stress and doubt can really hamper your ability to move forward. The sad fact is that many entrepreneurs never feel truly successful, and many are plagued by stress. According to a Gallup-Healthways Well-Being Index, 34% of entrepreneurs – 4 percentage points more than other workers – reported they were worried, and 45% of entrepreneurs said they were stressed, 3 percentage points more than other workers (and that was pre-pandemic!).
So, before you move on to the next steps on the list, take a moment (or more than that, ideally) to not just give yourself a little pat on the back, but actually list the successes of your business for the year, no matter how big or small. Then reward yourself with something that makes you feel good. If this step seems optional, and easy to skip, you might want to rethink things, or you could be facing some serious burnout in the new year.
2. Do Some Serious Analyzing
If you’re worried and stressed, take a breath and start asking questions to focus on what’s really important for the health of your business, and what it is that’s keeping you up at night. Are you not growing at a rate that’s appropriate for your business? Are your expenses outstripping your revenue? Are you acquiring fewer customers than you did last year?
Where do you go from the question-asking stage? Well, if you’re going to really understand what worked and what didn’t last year, and what needs to happen in the new year, you’re going to need to do some number crunching. Before you do that, though, figure out what’s really important to your business, and what you should be looking at. In other words, separate out the actionable metrics for your business from the vanity metrics, or the less meaningful things such as likes and subscribers.
So which metrics should be most important to your business? Well, you can look at some or all of the following, remembering it’s always better to calculate year-over-year growth rates for these metrics (instead of looking at just one period in time):
- Number of customers
- Average customer value (for the year)
- Average length of time that you keep your customers
- Lifetime value of a customer
- Click-through/conversion rates on email newsletters
- Conversion rate from lead to paying customer
Remember, these are meant to be actionable metrics, so learn from these numbers, and make a plan of action based on them to keep doing what you’re doing right, and change course where things are going wrong.
3. Get Some Outside Help
Now is a great time to meet with a financial professional, like an accountant or bookkeeper, so you can get some help reviewing financial statements, and can ask all your tax-related questions (like about deductions, for example), You can also work out a timeline for your tax deadlines (you might want to pay taxes on a quarterly basis, for example).
In addition, if you’ve been thinking about getting some help for your business, now is the time to finally keep that resolution, especially if you’re starting to feel physically and emotionally burnt out. If you’re looking to hire full-time employees, now is a great time to get your ads and paperwork ready. Or, it might be less stressful for you to consider outsourcing as an alternative to hiring full-time employees – or doing everything yourself. You can outsource any number of tasks, including web security, payment processing, and even email management. You might think you can save money by trying to do everything yourself, but more often than not, you just end up saving neither time nor money, and you end up with a not-so-great result.
4. Get Social
Having a strong social media presence is so important for most businesses these days, but that does mean a lot of upkeep, or you could be doing more harm to your brand than good. If your social media accounts aren’t doing you any favors, revisit them now so you don’t have to stress about this aspect of your digital marketing next year. For example, head to your Twitter account and change that months-old tweet that’s pinned at the top of your handle, refresh your Facebook cover images, or actually start using your Pinterest account!
5. Take Stock, Literally
Worried about having too little or too much inventory left over from last year? Or, if you don’t sell physical products, are you worried about whether you’re focusing on offering the right services? Use this time to literally take stock (or evaluate what services were most popular), and do some ruthless paring down, so you can focus on what sells, and what is just taking up your time and money.
6. Set Some Goals for Next Year
Once you’ve done all of your analyzing of the past year, it’s time to look forward to next year. How should you do that? Start with the practical, if tedious, stuff, like:
- Gather your tax documents to be on top of tax season, including bank statements and financial reports, proof of business expenses, mileage logs, and 1099 forms
- Renew any licenses that need renewal
- Revisit vendor agreements to see if any changes are necessary
- Talk to your landlord about your lease, and see if you can do any renegotiating
After that, it’s time for some bigger-picture thinking: it’s time to set some goals for the next year. But that doesn’t mean creating a laundry list of tasks with no clear focus; rather, you should be focusing on setting SMART (specific, measurable, achievable, relevant, and time-bound) goals that put you on the road to growth. For example, making a SMART goal would mean that, instead of saying you’d like to grow your revenue by 20% next year, you might say, “By the end of next year, I want to hit $X in revenue from acquiring X more customers than we did this year, and upselling X% of existing basic customers to our more premium plan.”
So, take your actionable metrics from above, and choose the four most-impactful ones that you can emphasize in the coming months, one for each quarter. Then publicize these goals within your team and make plans to evaluate your progress on a monthly basis, to keep you on track.
We know it’s easy to put all of this important stuff off when you’re in the weeds of your business’ day-to-day operations, but analyzing where you’ve been and planning ahead for where you want to be going are vital for the success of your business. So instead of stressing at the end of the year, take a firm hold on the reins, get done what needs to be done, and celebrate making it through another year, so you can be energized for the year to come!