Tag Archives: cash flow

Year End Review

December is a hectic month for most business owners.  The Thanksgiving holiday cut short the end of November and, in retail, started the huge push to put black on the bottom line for the year.  December adds holiday parties, end of the month, and end of year in the last week without mention of Christmas, Kwanzaa, New Year’s, and football games.

December is also a good month to review your performance for the last year.  A year end review can be a lengthy process or a quick overview of how your business did.  It should be done in conjunction with laying out strategies for 2014 as well, which we’ll cover in next week’s blog.  Brand Irons can assist you with year end reviews and 2014 strategies.

10 things to think about as you take a look at 2013:

  1. How much of an improvement, if any, does the bottom line show over 2012?
  2. How does cash flow look at year’s end?
  3. How did sales do in comparison to expectations?
  4. How has productivity been improved during the last 12 months?
  5. What has been the trend in consumer demand throughout the year?
  6. What have been the significant changes or innovations in the industry?
  7. What percentage of customers have you been able to retain?
  8. What areas have been identified where staff or employees may need more training?
  9. What does your profit margin look like?
  10. How well are you doing, personally, on your retirement goals?

The complexity of a year end review depends, primarily, on the size of the company and the diversity of the management team.

Most of the check-points listed here pertain to financial information, so it may be wise to schedule a meeting with your accountant to go over performance indicators.  Other items, such as consumer demand, are related to market conditions and may require some research to identify existing trends as well as potential growth areas.  Others are management- and personnel-oriented.

What is critically important, either in reviewing a year’s performance or strategizing for the next business cycle, is to know what metrics you want to measure.  What is essential for the long-term sustainability of your business?  What do you need to know?  What else would you like to know?  Having this in hand makes it easy to compare one year’s results to the following year and put a pinch of realism into budget projections.

Brand Your Work – Work Your Brand.

Team Resource – Your Business Consultant

Business Star 3-13You may be thinking you know everything you need to know to operate your business, so you can get by without a business or marketing consultant.  You probably could, if you truly do know everything you need to know about your business and feel an independent, third party perspective is unnecessary.

Let’s do a little test of your understanding up front:

  • What is your operating profit margin?
  • What systems are in place to avoid employee theft?
  • How many of your customers made repeat purchases in the last year?
  • What kind of impact will the federal health care system have on your business?
  • How current is your unemployment insurance coverage?

These are questions you should be able to answer without much thought, although the larger concern is how well you are able to stay on top of this information and the related implications … and keep all your other tasks under control, too.

Your profit margin is a bellwether of how well you are doing.  Grocery stores operate on a much smaller margin than jewelry stores.  Your accountant can help you figure out your margins if you’re unsure how to calculate cost of goods sold and other variables.

A five here or a twenty that fails to make it into the cash drawer may seem inconsequential in the big picture, but nickels and dimes add up over time.  Tills should balance at the end of shifts, and since cash is a measure of your success, you need controls in place to monitor your capital, even if you trust your employees completely.

Knowing your customers and their buying habits is market research, and it’s customer relations.  You and your staff should be able to greet returning customers by name when they come back to your store.  Their return is an indication you’re doing things the right way … for them.  Or else they’ve got complaints, which means you need to get on top of those and solve them promptly or they could have a negative impact.

The new federal health care regulations and your unemployment compensation insurance are difficult matters to monitor on a consistent basis.  Your insurance agent is trained to stay abreast of changes in laws and can be an asset to your business, managing your risk, saving you money, and covering your assets.

You have employee issues, inventory concerns, sales numbers and projections, customer service situations, payroll, taxes, marketing, production, and whatever else you have to deal with every day.  Oh, yes, how much time do you take for yourself every week?

Your business consultant is a resource that is valuable to your business in many ways, from helping you manage potential threats and viable risks to staying focused on your mission and key objectives and guiding you in growing the business.  If you avoid using a consultant because of the cost factor, demolish that thought process and look at it, instead, in terms of how that expense should manifest itself in double, triple, or even larger growth for your business.  Round out your team with strong, professional advice.  Your consultant should also become an advocate for your business and hold you accountable for prioritizing the work you must do to make the right decisions.