5 Must-Know Tips for Small Businesses in the New Year.
As we head into a new year, many of us are trying to catch our breath. But this is quite literally the busiest time of year for small business owners. After you’ve adequately prepared for the holiday season, you’ll need to turn your attention to the upcoming year. How should you prepare?
Here are a few tips to help small business owners, like you, plan for the year ahead.
#1 – Review your numbers.
While it’s easy to look ahead when preparing for the future, it’s just as important to look back. Take a look at your data from this year: how much revenue did you generate? What are your profit margins? Your expenses? Understanding this picture will allow you to evaluate what did and didn’t work and where you can make improvements.
After you look at the financials, be sure to review your inventory and sales. Which products or services were most popular? Which didn’t perform as well? How can this inform your product/service and marketing plan next year?
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For example, looking at the promotions you did for your best-selling products will help you determine if you should adopt similar marketing strategies for less popular products. Ask yourself questions like:
- Do you have the best product set or services to appeal to customers?
- How were items/services listed on your website?
- Did you do any product- or service-specific social media posts?
- Do you have cues at your point-of-purchase to spur action? If so, how did they work?
This kind of deep dive into your numbers and strategies will help you determine where to focus your energy (and budget) to increase your return on investment.
#2 – Check on your customers.
Customers are the lifeblood of your small business. Make sure you spend ample time studying your customer base. Here are a few things you should ask yourself:
- How many new customers did I have this year?
- Where did they come from?
- How many of my customers are repeat customers?
- What am I doing to maintain my customer base?
- Are my repeat customers engaged with my business?
- Am I reaching new audiences through my efforts?
The answers to these questions will help you decide which promotions, tactics and strategies are working. If you aren’t seeing a lot of repeat customers, perhaps it’s time to implement a loyalty program. If you already have one, then it may be time to reevaluate your approach.
- When do you see the most engagement with your online presence?
- Do you have an email list that allows you to periodically reach out to your customers? Small touchpoints like this are largely free of charge and help keep your business top-of-mind for customers.
If you have a way to track who is and isn’t returning, you can send different messaging and incentives to each group, like discounts vs. referrals. Make sure you’re continually offering your customers value, even after the sale.
#3 – Don’t delay tax prep.
Tax prep is a year-long process for small businesses. Even though you’ve been paying taxes all year, now is the time to get everything organized for tax-filing season. Reconcile your accounts, consult your financial professionals, run your reports and gather your receipts!
Do you have a digital space to keep your financial records? Do a side-by-side run-through with your physical receipts — is everything accounted for? Do you have all of your business expenses recorded so you can get all of your potential write-offs? Do you have a quick way to run reports? Do the numbers make sense?
If you’re not using a digital payments solution that automates this process, that might be a good investment for you. Digital payments software, like Cashflow Complete, can help make this part of year-end prep a breeze.
#4 – Never stop learning.
You’re a professional, but that doesn’t mean there’s nothing new worth exploring! Technology continues to evolve and people’s priorities change — it’s important that you adjust. There may be a new product or solution on the market that can save you time and money. Or perhaps something in the world (like a global pandemic) has altered the public’s priorities and needs.
It’s important to stay flexible and informed on things that could potentially affect your small business. This is especially important on the financial side, where new regulations, laws or fees might affect your bottom line. Touch base with your trusted financial professionals to make sure you’re not missing any major regulatory changes.
#5 – Set goals like a boss.
Because you ARE a boss! With all of your prep work, you’ll be able to effectively analyze and strategize your way to success in the new year.
Set goals for your business that are attainable and specific. They will help you gauge what is and isn’t effective and help you see your success from a high level. Some common business goals are:
- Increase revenue stream
- Diversify product offerings
- Add repeat customers
- Grow profit margins
- See more customer engagement
- Improve your business partnerships
Always work with who you trust.
A great rule of thumb is to always work with people who have your best interest in mind. That can mean employees, vendors, customers, and especially, financial professionals. There could be solutions on the market that you didn’t even know you needed — your bank or advisor should let you know. They should help you lower your fees, reduce your risk, streamline your tasks, and keep accurate reports on your small business.
Commerce Bank prides itself on solving challenges for businesses of all sizes. We offer a wide range of services, like business banking, business credit cards, merchant services, digital payments and more. We’d be happy to be your next trusted adviser.
We’ll focus on the financials so you can focus on what you love about your business. Let’s get you and your small business set up for success in the coming year!
