End of Year Business Priorities
As the end of the year looms near, I tend to receive quite a few inquiries focusing on what business owners need to do to get ready for next year. While I will highlight a few of the important tasks to complete, I am more interested in helping business owner do certain things throughout the year, to keep from having to focus on so many at the end of the year. I have never met a business owner who could not use more time.
Let’s start with forecasting. As a business owner, are you forecasting your sales for each month next year? If you don’t know what those numbers will be, or have to arbitrarily pick a number based on this year’s sales, then you need to focus on budgeting and forecasting before January.
It is very eerie how close I will come in my business each month/year to my forecasted sales. We do not arrive there by accident however. Instead, I set aside time each month to review my sales versus what I forecasted. In fact, I usually reference our forecast throughout each month to make sure I have the best possible chance of reaching that goal.
Remember not to simply forecast a sales number, but rather, forecast what drives those sales. If you sell Tupperware, then you need to forecast how many parties you will have each month as well as the average amount each party will bring in. If you sell items on eBay, then you need to forecast how many items you will list each month and the average sale price of each item. If you are in the restaurant business, then you need to forecast how many customers you will have and the average cost of a meal. You really can do this in any business, and you should do it for every business.
By November 15th of each year, I have our business budget and forecast finished. Are you finished with yours? I will remind you that you cannot hit a goal that you cannot see. Write your goals down for next year, review them periodically, and see what happens.
Another thing to be done throughout the year, instead of just at year’s end, is to organize your important tax documents. Some business owners spend hours, and even days, organizing their tax information. Instead of taking valuable time away from your business to do this, develop a system for organizing and filing throughout the year, rather than all at once in January. You will arrive at tax season more relaxed and spend less time pulling everything together. Could you use a little more time at tax season?
Speaking of taxes, have you kept up with yours throughout the year? If you are self-employed, you should be sending quarterly estimates of what you think you will owe, instead of paying a large liability and penalty at year’s end.
If you have employees, you should be withholding employment taxes from their paycheck, and sending it, along with your company’s portion, to the IRS/state on a monthly or quarterly basis.
If you have not withheld taxes, you may be in for a surprise in April. I had a client recently who was hit unexpectedly with a $38,000 tax bill, payable to the IRS in just 3 months. He made the mistake of not withholding while he worked as a contractor. The IRS and the states both have enormous power to take your possessions if you do not pay your taxes, so please make sure you stay on top of them.
To save on taxes this year, there are a few things you can do. If you want to show less income you can wait to invoice some of your customers until the beginning of the year.
You can also pay some of your expenses before the end of December if you want to take the deductions this year. Of course, that may not help you next year, but in certain circumstances, it can be beneficial to you.
I always try to maintain the mindset of “What can I focus on throughout the year, rather than just at the end of the year?” If you can develop that mindset, I know you and your business will thrive because of it!
Justin Lukasavige is a Personal & Business Coach in Apex, NC. He can be reached at 919-342-0801, or through his website at www.LukasCoaching.com.
Justin Lukasavige is a Personal & Business Coach and owner of Lukas Coaching. Visit www.lukascoaching.com/resources.htm for a ton of free tools to help you improve your health, finances, business, career & life!
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