From my experience of managing my own company to managing a division within an organisation, the end of the year business evaluation is something I have both relished and dreaded in equal measures. For a lot of businesses, particularly SMEs, this time of the year is a busy one as they are in the heat of the fast approaching holiday season. While it is important to capitalize on the opportunities that the holiday season presents especially as it regards profit, it is more important to begin to organize and tidy up all key aspects of your business for the end of the calendar year. This will help your business end the year on a solid foundation and enable you to build on for the next year.
If you are an SME, here are seven major things that should be on your business’ end of year list:
Financial management is the weak link for all SMEs no matter where they are located. They certainly emerged as the weakest link amongst the 7,000 plus African startups we empowered through the Tony Elumelu Foundation Entrepreneurship Programme with training, mentoring and seed capital investment. Financial management is vital to running a successful business. Most of your time will be spent on this particular item because it is the most pivotal part of getting your business in the right order for the end of the year and the coming year. As such, financial records should be maintained thoroughly throughout the year and properly accounted for by the end of the year. End of year financial reports and statements (detailing profit and loss), tax reports, cash flow statements, payroll documentation, vendor reports (if any) and Taxable Employee Benefits make up some of the key documents that must be properly detailed and analyzed. End of year financial evaluation will tell you the truth of where your business is, based on which you can review the past year and plan for the future. My advice is to get help from an accountant or bookkeeper who can be your trusted financial guide.
No company can exist without constant data and information being passed both internally and externally. All files and data created by your business should be properly catalogued and backed up in a secure location. These data include client information, meeting notes, emails, photos and videos, briefs, research materials and so on. There are two major ways you can go about this: the first is to put them on a cloud-based storage system (For example, Google Drive, One Drive and Dropbox) and the other is to put them on an external hard drive. Also note that your contacts list is a form of data and should be catalogued and properly backed up as well. Review of your company’s information and data collation, which I call documentation management at the end of year business is as important as the financial management of your company. Documentation management is the institutional memory of your company. It is a record of the standard operations and procedures, goals, action plans, reporting and approval processes, and reports.
From my experience both as a manager and being managed, employee look forward to their annual performance review. I firmly believe, performance review should happen throughout the year, culminating in the annual review. So whether you have one employee, 10 or a 100; it is still imperative for them to be evaluated. This process will help you properly measure the performance of your staff over the work year and aid in making other key decisions in this regard.
These decisions can involve one of the following:
Additionally, the end of the year presents a unique opportunity to review and improve on HR procedures like recruitment, development and retention of talent within your company/organization.
Before jumping into plans and activities for the next year, it’s important to evaluate the goals written down for the current ending year. Review these plans armed with the financial reports and statements for the current ending year. Go through your business plan and other related documents relating to the business year to give you a detailed and realistic perspective of exactly where your business stands.
Ask yourself the hard questions: Did you accomplish all that you planned to do? Why or why not? How can you improve on current goals? What were the challenges and milestones met during the year? These ‘WHYs’ ‘WHATs’ and ‘HOWs’ are essential and cannot be overemphasized. Based on these reflections, you can set future goals.
This may seem trivial to some but it’s an important and valid element that can give your business a huge boost. The human memory can be a fickle thing and it is very easy to focus on the struggles of the present while forgetting the achievements of the past.
Before the year runs out, take the time to catalogue your achievements and celebrate these accomplishments with your employees, stakeholders, customers and clients. It is a great way to build team spirit, increase morale and keep employees engaged and ready to take on the tasks for the coming year.
Conclusively, as mentioned at the beginning of this article, do not let the hectic business activities of this period of the year stop you from putting your house in order for the close of the year. In the coming weeks, I will be sharing insights on how to properly plan for a new business year and also how to write a detailed annual review. Please share how you plan the end of year business review for your company or organization, we can all learn from each other.