The start of a new year is the perfect time to evaluate your company’s finances and plan ahead for a year of growth and success. Given the unpredictability of the world we live in, there is no such thing as over preparation when it comes to planning for unexpected financial challenges that pose a threat to the success of your business.
So how do you start the year off right and make the most of it for your business? Below are some steps you can take to ensure your business is set up for success in the new year.
Review, Reflect and Re-evaluate
The beginning of a new year is the best time to take a step back and reflect on how the past year has been for your business in terms of setbacks and successes. Intentionally reviewing times when your business did well as well as areas where it could have done better is crucial to objectively assess what has worked for your business in the past and what needs to change.
Be thorough and detailed in your reflections as they can help you build a better business plan for the new year by taking into account what the business has experienced in the last 12 months. Revisiting your previous business plan and reevaluating its strategies allows you to build resilience into your business as it moves forward into the year ahead.
Flesh out a Financial Forecast
Turn your reflection into action by setting goals and forecasting what the financial future of your business will look like. Ensure that your financial projections are realistic, achievable and in tandem with your overall business strategy for the year.
Cash flow projections can be used to prepare your company’s annual projected income statements and can help predict what the profit and loss for your business may look like in the new year. Creating financial forecasts can also help you determine how much cash your business has available so you can plan ahead for the year and prepare for any contingencies. Having a significant savings balance or an established line-of-credit prepares your business for any unexpected financial demands that may come up in the course of the year.
Step Back and Strategize
Now that you have reviewed the previous year’s business plans and made financial projections for the new year, it is time to take a step back and apply this knowledge to devise a business strategy.
Creating a new business plan and strategy can prove useful when it comes to setting goals for the new year and preparing for any potential challenges that may arise. Including both internal and external business processes and procedures can ensure your business plan is all-inclusive and wide-ranging. This is also a great opportunity to make sure all your business documents are in order for the new year so you do not have to spend precious time rummaging through old paperwork.
No business plan or strategy, no matter how well-thought-out, is beneficial to your company if you do not monitor its progress. For optimal success of your business plan, incorporating regular check-ins and follow-ups is crucial as they help assess your advancement and ensure your business is on the right track.
The start of a new year can get quite busy for businesses but taking time out to monitor and compare your company’s progress to your initial business plan should remain a top priority. Constantly checking-in allows you to make informed adjustments to the plan and gives your business time to make course corrections so it can make the most of the new year.