The closing of the calendar year presents an opportunity to see where your business has been, how it got there, and where you want to start moving. The previous 12 months of information will reveal the actual performance of your business. This checkup requires an in-depth look at your numbers, but sometimes, the amount of information available to a business owner can be overwhelming. Here are 7 simple assessments that can offer a solid overview of your business.
- Review Revenues. Look closely at sales history. It may be helpful to make projections through December based on results to-date. Then compare revenue of the past year. Ways to analyze the numbers include: check the difference between sales in 2012 and 2013, look at sales by product, customer, and locations. A more in-depth sales forecast may be helpful for planning the coming year.
- Assess Promotions. Consider whether the core promotions of 2013 were effective. Review each one individually to fully understand their performance. These promotions may include various holiday specials, industry sales or other special event promotions. Be sure to look at the outcome of new promotions, the overall handling and marketing of each promotion, and the timing and spacing of the specials.
- Product Offerings. Analyze the products that you are currently offering. Review if new products were added, where each product is in the product life cycle, and if the core products are still yielding sales at historical levels. This review can help you consider if there are products that are due to be phased out.
- Customer Considerations. Has your customer based change? Look at the relationship of historical and new customers, their purchasing behaviors, and business expenses associated with retaining each customer. Also review prospects and the percentage that you expect to be converted to customers.
- Competition Appraisal. Take the time to review the business landscape and competition in your industry. Examine the major players and how they are influencing the market.
- Scrutinize Expenses. Just as with revenues, compare 2013 performance to the 2012 numbers. For most businesses, there will be an increased cost due to wages and inflation. Take note of areas where you can save, including creative new approaches to contracts and services. Also ask employees what inspires their best work; it may not be tied to monetary increases.
- Bottom Line. How did your business perform overall? If the net income was negative, determine if the income at least covered the cost of goods sold. Compare the margins to last year to identify the activities of most value.
This review of you business will be a solid guidepost as you prepare for the new year.