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End Of Year Planning for Business Owners

October 7, 2023

One of the most crucial business end-of-year activities is engaging in year-end planning. End-of-year planning can be critically important for business owners because it allows them to see what went right, what went wrong, and what they can do better next time. It also enables them to reassess their finances and determine how they can better support their business’s mission.

Read on for more information on conducting a year-end review of 2023, creating your end-of-year business checklist, and what sort of planning you should engage in.

Re-evaluate and Realign for the Year Ahead

At its core, strategic planning comes down to ensuring that your business is meeting its financial goals and doing so in a repeatable and sustainable way. Engaging in year-end strategic planning can allow you to properly analyze results, map out a future vision, and determine where you need to make certain changes.

Strategic planning shouldn’t just be a year-end activity. However, you can take the time at the end of the year to engage in strategic planning and ensure that you have:

  • A mission and vision that fits your business objectives.
  • A plan of action, specific deliverables, and individuals assigned to complete this plan.
  • The right approach and tactics to fulfill your business objectives.

Strategic planning may lead you in surprising directions. For example, part of your planning may involve a comprehensive overview of your vendors and their offerings, and you may decide that one of your partners — like your bank — isn’t providing you with the services you need. In that case, the end of the year is the best time to find a bank that suits your needs.

Manage Your Risk

Risk is critical in any business, but how much risk is too much? The end of the year is the perfect time to recalibrate your risk and ensure you are set up for the new year. Managing your risk involves reviewing your business decisions, what outcomes you have achieved, and where you think things could have gone better. You should consider asking yourself some important questions:

  • What results did you achieve in terms of key metrics, positive and negative?
  • How did you achieve those results? What processes or staff members were key in achieving these results?
  • Where did risk pay off for your business? Where did it fail?
  • Are you engaging in proper treasury risk strategy mitigation? The answer to this question is broad and refers to many business segments, including protecting your technology, ensuring liquidity, managing your relationship with vendors, and more.

From there, you have to ask yourself some key questions: In what instances did risk work well, and where did it fail you? How can you revamp your business strategies to unlock better performance next year?

Help Your Business and Team Defer and Maximize What They Can

Financial planning for business owners doesn’t just mean creating your own personal year-end financial planning checklist. A proper year-end plan also helps your team and business maximize their financial potential. You should take the end of the year to examine your team’s tax structures and benefits, assisting your team in:

  • Deferring income. Depending on the compensation structure for your team members, you may be able to help them defer income until next year, allowing them to reduce their taxable income.
  • Maximizing contributions to FSAs, HSAs, 401ks, and more. By maximizing these contributions, team members can not only better plan for the future but they can also reduce their taxes.
  • Spending down FSAs and HSAs. Depending on the specifics of these benefits for you and your team members, the end of the year may be the perfect time to spend down these programs before they expire.
  • Understanding how stock options work. Take time to understand various stock options and decide if this is the time to buy or sell those options.
  • Examining retirement options. The end of the year is the perfect time to reexamine and optimize your company’s benefits packages and retirement offerings.

The above financial decisions can often apply to you, your team members, or your business. Your challenge is to comprehensively and regularly engage in planning that allows you to make the best financial decisions possible. Doing so means that you need access to professional advice that can better inform these critical financial decisions.

Final Thoughts

Year-end planning takes real work and dedication. It involves a comprehensive examination of many facets of your business and its finances. However, when done right, year-end planning allows you to better prepare for what went right, what went wrong, and what you can do better.

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