Wrapping Up & Planning For the New Year

• Y'vonne Ormond

As the year draws to a close, many businesses are left rushing to finish projects and tie up loose ends. Quarter 4 (Q4) often ends up being one of the busiest times of the year for many business leaders.?

Before you disconnect for a well-deserved break, take some time to properly wrap up this year and plan for the one ahead. You’ll benefit from balancing client needs, employee needs, and the potential upcoming business slowdown over the holidays.

With 20 years of corporate experience prior to becoming an entrepreneur, I’ve gained a unique level of insight into best practices for year-end planning. I’ve created this list of suggestions for helping you plan for the end of this year and the start of the next.

Wrapping Up The Year

The end of the year is close, but there’s still some work to do before you push ahead to next year. You can smoothly make the transition into the new year by focusing on four aspects of your business: caring for your clients, caring for your employees, executing internal projects, and organizing year-end financials.

Caring for Your Clients

Your clients should always be high on your priority list, and the end of the year is no exception. Show them how important they are by giving them special attention as you wrap up the current year. Some things you can do to care for your clients include:

• Future Needs: Get started on your client’s future needs with a planning session. Focus on goals for the new year and how your business can help them reach these goals. Once you know what your clients hope to achieve in the coming year, you can focus on the most appropriate ways to support them.
• Service Continuity Improvement: Request feedback from your clients on how you can best improve your service continuity plan. Ask them about their biggest worries around service interruption or failure. Seek their feedback on what aspects they believe are the strongest parts of the plan or where they feel most comfortable in case of service interruption.
• Thank Them: Your clients are the most important part of your business — you can’t operate without them. Show them your appreciation in an authentic, thoughtful way. You know your clients best, so be sure to consider your business model and client relationships when brainstorming ideas. For example, you might send holiday cards to individual clients with a handwritten note. You can thank them for working with you this past year and express excitement at what’s to come.

Caring for Your Employees

Your team members are just as important as your clients. You can help make the busy fourth quarter less stressful by focusing on the needs of your employees, such as:

• Vacation Planning & Coverages: Employee vacations at the end of the year can cause extra stress on the rest of the team. Not having enough team members at work can also potentially lead to poor service for your clients. Coordinate between your teams to plan vacations, coverage, and backups for a smooth holiday season. This allows you to create a perfect balance of supporting your clients and giving employees time off to enjoy the holidays with family and friends.
• Year-End Reviews: Conducting year-end reviews is a great way to round out the year with your employees. It gives you a chance to offer feedback to your team members. You can let them know what they’re doing well and what they can do to improve over the next year. It’s also a chance to establish employee goals for the coming year.
• Distribute Bonuses: If you offer annual bonuses — or any type of bonus system — the end of the year is an excellent time to give out bonuses. You can include bonus information in your year-end reviews. This is a great way to communicate why an employee is getting a bonus or not, based on personal and business performance goals.
• Have Fun: Letting loose and enjoying time with one another around the holidays is a way to bond as a team and relax. Plan a holiday event like a happy hour or holiday party for everyone on your team to have some fun together.

Executing Internal Projects

A key to successfully wrapping up the year is reviewing your projects, processes, and tools to look for potential improvements. By completing this review before the new year, you give your business time to adapt to the changes before hitting the ground running in Quarter 1 of 2023. There are two main internal projects to consider:

• System/Tool Upgrades: Look for tools, services, and products you can upgrade now to use in the new year. This allows you to pay for the services or tools this year, giving you one less expense to worry about in the coming year. For example, say your current invoicing system doesn’t have the capabilities to handle your current client volume. Upgrade your system now and set changes to take effect in the new year.
• Operational Projects: Deliver your key system or process changes for the new year. Roll out your plans for these changes now so your employees can adjust to the changes. This provides a smoother transition in the new year and gives your team time to process or merge data from one system to the next.

Organize Year-End Financials

Your last goal to tie up the end of the year is to organize your business financials. This is an important step to ensure your business finances are ready to go in the new year and help decrease the risk of unpleasant surprises at tax time. Your financial checkout should include:

• Preparing for the year-end payroll run and your Q1 tax activities.
• Ensuring payroll records are up to date for W2 distribution.
• Maximizing 401(k) contributions and matches using true-up contributions during Q4 payroll.
• Distributing and classifying business owners and leadership salaries in Q4.
• Running employee bonuses through payroll.
• Self-auditing your books, so they’re clean and closed at the end of December.

Planning for the Year Ahead

With your most pressing year-end needs wrapped up, you can now focus on the fast-approaching new year. Like year-end activities, getting ready for the new year can help keep your business organized, helping lower your stress levels over the holidays. Key areas for planning include: financial planning, strategic planning, operational systems, and people needs & planning

Financial Planning

Financial goals and needs should be your first priority in planning for the new year. Update routine financial information and make sure you’re ready to tackle the year ahead:

• Develop financial forecasts for the coming year, including budgets and revenue forecasts.
• Ensure a strong cash flow for the next year of business. This includes having cash flow options in place to combat the ups and downs of running your business, such as a line of credit or business loan approvals.

Strategic Planning

Like financial planning, strategic planning is all about setting goals and defining the next year of business. In strategic planning, you should focus on:

• Setting or changing business goals for the coming year, from department goals to sales goals.
• Develop, refine, or change your marketing and sales plans for the year. Review your existing plans for strengths and weaknesses. Consider potential opportunities for improvement and look at avenues you may not have taken in the past.

Operational Systems

As a business leader, you’re always looking for ways to make your business more efficient. The best way to improve efficiency is through operational changes. This involves automating, transforming, and streamlining the systems you currently have in place. The end of the year is a great time to introduce new operation systems, such as:

• Rolling out a new system in November or December to use in the following year. This gives you time to train employees on the new systems and work out any kinks before you hit the ground running next year.?Consider this approach for tools like new Human Resources, Financial, Sales, or Project Management Systems.

• Implementing data systems and processes to better manage your business with data. A clear-cut end date of old processes and a clear start date of new processes make it easier for employees to transition to the new systems. This opens the door for a digital transformation in the new year. Digital transformations give your business access to more efficient, automated processes that put data to work for you. You’ll benefit from a more productive workplace and access to more insights to make data-driven business decisions.

People Needs and Planning

The end of the year isn’t only for distributing bonuses or reviewing employee performance. You can also use this time to promote growth and define your employee needs for the next year. Your new-year employee planning should:

• Define staff capacity needs to fully support client operations in Q1 of the new year. Use the remaining portion of this year to work out staff schedules for the beginning of next year or hire and train new employees to meet increased needs.

• Conduct any required or suggested annual employee compliance training.
• If you have a year-end slowdown, look for opportunities to build employee skills through training and innovation projects. This could include training on new software or offering a workshop on the skills for an internal promotion.

While this checklist might feel overwhelming, using it helps put your business in a more organized position for the new year. This means your business will be more prepared to help clients, your employees will be less stressed, and you can get some rest over the holidays knowing your business is ready to take on 2024.

Not sure where you can improve your business processes or systems in the new year? The 5P team is here to help. We’ll analyze your systems to help you define goals, create streamlined processes, and recommend the technology to improve your business for next year. Download our Business Value Roadmap and?contact us today for a free consultation!