Every new year, business owners should take the time to sit down and do a little planning, just to make sure that they’ll be able to keep their company afloat and on the right track. Doing so will help ensure that the business will have the necessary tools to maintain (and meet) its financial and operational goals and that the firm’s employees will be happy with their working environment. Read on for some tips to help make the planning process run smoothly for you and your business.
- If you own a business, do some financial housekeeping at the beginning of each year to make sure that the new year will run smoothly.
- To avoid unpleasant surprises, be careful that your insurance policies and employee benefits are on track and not set to lapse.
- Evaluate your staffing, vendor, and marketing efforts to keep up to date with your competitors.
1. Consider Your Digital Footprint
Setting Up a Business Website
If you want to compete, especially with the big names, you need a presence online and in social media. Begin by creating your own website. How complex it has to be and how much traffic you think it will generate will determine whether you can set it up yourself or should hire a professional to do it for you.
You need a recognizable domain name that customers can find easily. You’ll have to decide whether you want to share a host with other small websites, set up your own dedicated one, or employ a managed hosting service for larger businesses. You should build in costs for website maintenance and marketing. And you need a marketing plan to ensure that, once you have your website, it will have visitors. After all, what good is an online home if nobody knows your address?
Maintaining a Social Media Presence
These days a social media presence for your business is essential. You should know what Facebook, Instagram, Twitter, Snapchat, LinkedIn, Pinterest, YouTube, and TikTok, among others, are and which audiences they serve. If you’re unsure of how or where to start, there are services that can help set up your social media presence for a cost. You can also hire them to help you maintain that presence if that’s not your strong suit.
If you are going to be hands on, you need to create a social media team whose job it is to figure out your online strategy for reaching potential patrons. Said team needs to define your audience, what its interests are, and how to reach it through existing content, newly created content, and proper targeting of platforms (older people tend to make Facebook posts, for example, while today’s youth are busy creating TikTok videos). Blogging, video blogging (vlogging), and podcasts are just some of the ways to get your business name out there.
Every business owner should periodically review vendors and suppliers to make certain they are setting competitive prices and delivering quality service. The beginning of the year may be the best time to do it.
In many cases suppliers may have just completed their budgets for the current fiscal year, so they are looking to pin down business and cut deals to ensure that they achieve their annual financial objectives.
With that in mind, owners should ask themselves the following questions:
- Are current vendors charging competitive rates?
- Are current vendors providing good service and adapting to the business’ changing needs?
- Are there any new vendors or suppliers who deserve a chance or from whom the business might obtain a quote?
- Does it make sense to try out a new vendor, even if it means giving out a small order?
- Would trying out a new vendor provide the business with leverage over an existing vendor?
Again, business owners will need to answer these questions in order to know whether they are getting good deals. Getting the best deals enables the business to keep its costs low, which improves the bottom line. Again, the first few months of the year are an opportune time to do this.
Manufacturing companies and many service-related businesses depend on machinery, supplies, and a variety of other equipment (from vehicles to assembly devices) to operate. However, many business owners are so caught up in the day-to-day activities that go with running the business that they sometimes forget to do periodic equipment checks and make sure they have what they need to grow the enterprise.
The first quarter is a good time to evaluate a company’s equipment needs and determine whether any capital investments need to be made. That’s because identifying the business’ equipment needs early on in the year can help the enterprise make its annual numbers. It can also help the business owner plan for future cash needs.
The following are questions that all business owners should ask themselves regarding equipment needs:
- Does the business have the equipment necessary to succeed and profit over the long haul?
- If not, can the equipment last another year, and can the business sustain itself using the existing equipment?
- What will new equipment cost and where can you obtain quotes for it?
- Does the company have the cash on hand or the ability to finance such purchases, or will the money need to come from future operational cash flow?
- Are there any expenses that could be cut in order to offset and help justify such expenditures?
During Normal Economic Times
Staffing needs should also be considered. It’s good to recognize any deficiencies early on in the fiscal year, so that appropriate adjustments can be made. Also, keep in mind that finding, hiring, and training the right person can take a lot of time, so it’s a good idea to get moving as early as possible. Finally, it’s important to realize that many employees tend to ponder their own futures at the end of the year. They start thinking about whether they intend to stay with your company or move on. If they choose the latter, you will have to deal with the consequences.
During the COVID-19 Economy
The COVID-19 pandemic has, of course, dislocated the U.S. economy in myriad ways. As 2021 comes to a close, there are still numerous people quitting their jobs and staffing shortages in a variety of sectors. Though the unemployment rate continued to fall in October 2021, reaching 4.6%, employers across the board are still having a hard time finding workers. For example, speaking of President Biden’s proposed vaccine mandate, Macy’s CEO Jeff Gennette told the New York Times, “We have a lot of stores that have a lot of openings, and any ruling that we have to mandate those colleagues be vaccinated prior to Christmas is just going to exacerbate our labor shortage going into a really critical period for us.”
The reality is that as of the start of 2022 it is still likely to be, as Forbes puts it, “a hot hiring market” for job seekers. According to the Ipsos-Forbes Advisor U.S. Consumer Confidence Tracker, the jobs index, which “measures job security confidence, job loss experience, and employment outlook,” is at 63.3 (out of 100) as of Oct. 22, 2021, higher than it was pre-pandemic. Though some of this has probably been fueled by confidence in job prospects going into the holiday season, Gennette clearly thinks it will extend into the new year. He wants the vaccine mandate to be kept in abeyance until at least February of 2022. These shortages are something you will have to keep in mind as you look at your hiring needs for 2022.
Though the old adage says that the best defense is a good offense, sometimes the best offense is a good defense. Simply put, insurance coverage is a business necessity.
At the beginning of the year, new rates for health insurance, business liability insurance, automobile insurance, umbrella policies, and other types of insurance tend to come into effect, so it’s a great time to go quote shopping.
All business owners should ask themselves the following questions about insurance:
- Is the company adequately covered in terms of liability and does it have adequate fire and health insurance?
- Are insurance companies running multiple policy-bundling deals at the beginning of the year in order to garner your business?
- Are there any new insurance carriers that might be able to provide a competitive quote?
- Has the company taken on any new assets or business interests that haven’t been accounted for and protected by existing policies?
6. Retirement Plans
Businesses looking to set up 401(k), simplified employee pension (SEP), or other retirement plans should do so as early as possible during the year. Setting up a plan early on can permit employees to take full advantage of their annual allowed pretax contributions. Theoretically, the more time the money is growing on a tax-deferred basis, the larger the nest egg they may accumulate.
Reviewing the plans, selecting an investment firm, and actually setting up a plan doesn’t happen overnight. Again, getting an early jump on these efforts makes sense.
Here are some questions business owners should ask when setting up retirement plans:
- What will it cost to administer the plan?
- How many employees might benefit and want to take advantage of the plan?
- How much will the company need to contribute to the plan?
- Are there any advantages to setting up one type of plan over another based on costs, the firm’s size, and employees’ retirement needs?
Why Is Planning for Businesses at the New Year a Good Idea?
Fiscal years often begin with the new year, so reevaluating and possibly changing your needs at that time gives you the maximum effectiveness across the next 12 months. It also gives participants in retirement plans the opportunity to maximize their savings.
What Areas of My Business Should I Look At?
Six important areas to consider are your online presence, vendors, equipment, staffing needs, insurance, and retirement plans.
Has COVID-19 Changed My Business Outlook?
This will depend on your business, of course. However, the COVID-19 pandemic has led to the creation of a hot hiring market, with staffing shortages putting job seekers in the driver’s seat, something the U.S. economy hasn’t seen in quite a while. You will have to adapt accordingly.
The Bottom Line
Business owners should continually evaluate their businesses and make adjustments accordingly. However, from a number of perspectives—such as insurance, retirement planning, staffing, vendor, and equipment needs—the new year is a particularly opportune time to sit down and plan.