Written by Daniel Evans
Well, it is that time of year again. The year is almost up, the weather has gone arctic and my annual pilgrimage to Jools Holland is almost here. In fact he is a fixture in my life in December every year both because I always end up going to see him when he plays Birmingham every December (Symphony Hall alongside Birmingham’s own Ruby Turner = a great evening) but also because my ideal New Year’s Eve is on the sofa watching his annual Hootenanny. There is a clever link here to the topic of this article because one of Jool’s ‘signature’ numbers is the 1949 Carl Sigman song “Enjoy Yourself (It’s Later Than You Think)”. The message of the song focuses on enjoying what you have now because it could soon be over.
The phrase ‘It’s Later Than You Think’ actually comes from a Latin saying that the Romans used to engrave onto sundials ‘Serius est quam cogitas’. They had a habit of putting sayings and phrases on their sundials – I guess the modern day equivalent of writing motivational sayings on sticky notes or on phone lock screens?
So what business wisdom am I looking to take from Jools & the Romans that is useful for helping you prepare for the end of the year? Well, it all centres around the reflection & time. As we get to the end of the year, the realisation that another year has passed drops upon us. Let’s take advantage of this reflective mood for our benefit. We are presented with an opportunity to reflect on accomplishments, assess challenges, and strategically plan for the future. Year-end preparations go beyond the typical financial considerations; they encompass a holistic approach to ensure your business starts the new year on a strong foundation. Let’s explore key areas that businesses should focus on to prepare for the end of the year.
Not saying that you need to do all the things listed here but definitely consider which could be a good idea for you right now.
Financial Review and Planning
So obviously your financial year may not align to the calendar year. However, if you have fallen out of rhythm with financial planning, budgeting etc. then the start of the new calendar year can be a good time to reset and pick up these habits again. Think about the following:
- Review Financial Statements: This is a good time to review your P&L and Balance Sheet to see where you are currently at. This should be part of good practice with Management Accounts but if it isn’t something you regularly do then consider having a look now!
- Budget Analysis: Evaluate your annual budget against actual performance. Is it on track? Are there any variances and why? Do you need to make any adjustments/edits? Check out our video on putting together a cashflow forecast here and a video on Zero Based Budgeting here.
- Tax Planning: Consult with a tax professional to explore potential tax-saving strategies and ensure compliance with any changes in tax regulations. Especially as in the UK the tax year will be heading towards the end so you want to make sure you’ve made use of any allowances or anything you can claim.
- Self Assessment Tax Return: A quick reminder for those Self Employed in the UK – your self assessment return is due 31st January 2024. Don’t leave it till late January to get it started…
Employee Engagement and Recognition
It isn’t just you and your business that will be in a reflective mood but also your employees will be taking stock personally of the past year. Use this as an opportunity to reflect together:
- Performance Reviews: If you don’t have a set time that you conduct performance reviews this could be a good opportunity to do so. Consider their performance over the last year and what expectations you have for the upcoming year – which should include mapping any KPIs where relevant and importantly identifying any development needs. A good performance review should be a collaborative process and also provide the employee with opportunities to provide their feedback to you as an employer as to what you could do to support them better and enable them to perform at their very best.
- Employee Recognition: Recognize and appreciate the hard work of your team members. Consider hosting an end-of-year celebration or distributing awards to boost morale. End of year/Christmas bonuses are often used as well here. When setting up bonuses consider how you can tie these to key metrics to incentivise performance of metrics important to the organisations success. Remember here in the UK you are able to have a tax deductible Christmas party for employees if done following the rules laid out by HMRC – well worth making use of.
Inventory Management
Obviously if you don’t sell physical stock then this one is irrelevant but for those that do you may want to consider the following:
- Clear Out Excess Inventory: Conduct a thorough inventory analysis and consider promotions or discounts to clear out excess stock before the end of the year. This should include checking the condition of any stock to ensure it is still in a good condition.
- Prepare for the New Year: Ensure that inventory levels are aligned with expected demand for the upcoming year. Plan for restocking key items to meet customer needs.
Technology and Infrastructure
Couple of bits to consider here:
- IT Security Check: Evaluate your cybersecurity measures and update systems to protect sensitive data. If you’ve not got much in place cybersecurity wise, then consider making 2024 the year you do. Attacks and breaches are extremely costly to all businesses and more so now SMEs are becoming targeted.
- Software and Hardware Updates: Ensure that all software and hardware are up-to-date to enhance efficiency and security. Consider if there is any equipment you need to replace in the upcoming year.
- Vehicles: If you have any vehicles then this is a good time to review your fleet management thinking about when insurance policies are due for renewal, when is servicing & MOT due, and conducting checks on the general condition of the vehicle (anything need sorting out like new tyres?).
- Physical Space: Whether in a co-working space, office or other type of facility then the end of the year is a good time to catch up on facilities management – any repair or refurbishment work due in 2024? Is the place still fit for purpose? Any renewals coming up of insurance, utilities, rent etc.?
Customer Relations
Again, another group probably doing reflections of their own will be your customers. A couple of things to consider for them:
- Updating them on holiday plans: If there is any planned downtime or closure over the holiday period be sure to communicate this in advance to customers to avoid frustration.
- Customer Appreciation: Show gratitude to your customers for their loyalty. Consider offering special promotions or exclusive deals to express appreciation.
- Gather Feedback: Seek feedback from customers to identify areas for improvement and enhance the overall customer experience.
- Key Account Review: Do you have any contracts with customers coming up for renewal in 2024? Be sure to begin the review process as early as possible.
Strategic Planning for the New Year
The most obvious part of your new year review is your strategic planning for the new year! Think about the following:
- Set Clear Objectives: Define your business goals and objectives for the coming year. Ensure that they align with your overall business strategy.
- SWOT Analysis: Conduct a SWOT analysis to identify Strengths, Weaknesses, Opportunities, and Threats. Use these insights to refine your strategic plan. We recently did a session on how to do a SWOT which you can watch here.
Legal and Compliance Matters
We’ve covered some of this in the previous topics but it is important to consider the ongoing task of ensuring your business is complying with everything it needs to be following:
- Contract Renewals and Reviews: Review existing contracts and ensure that they are up-to-date. Renew contracts with vendors and clients as needed.
- Compliance Check: Stay informed about any changes in regulations that may impact your business. Ensure compliance with all relevant laws and standards.
- ICO Self Assessment Review: Worth spending time completing the free data processing and management compliance checklist tool that the ICO has to see if there is anything you need to do to continue your compliance with data management rules. Check it out here.
By addressing key areas, you and your business can prepare for the end of the year and set the stage for a successful and productive new year. Remember that each business is unique, so tailor these recommendations to your specific needs and circumstances. As you navigate the year-end process, embrace the opportunity for growth, improvement, and continued success.
To see us out let’s start back with Jools Holland to play us out and remember it’s later than you think…..
Watch: https://youtube.com/watch?v=fW280u2pbIw%3Fsi%3DXSi1vB0k54UW7Q6K
