Spring is when business owners are required to file tax returns. It's also a good time to examine your individual and business tax returns and determine if you are on the path to sustain and grow your business.
Let's start with accounting records. They should help you determine if your business is profitable, and they should help you make business decisions.
Your financial documents should include the details of your expenditures and your sales. Does your sales information include each customer's name and address, telephone and email, the dates of sales, the description, quantity, unit price, payment due date and receipt date? Are your sales and your customers' buying habits changing? Are you regularly surveying your customers and listening to their responses?
Take a look at your accounts receivable and payables. Are your customers paying on time, or are some delinquent? Are you keeping up with your payables and taking advantage of discounts by paying in a timely manner? Remember, cash is king.
If you are in the red, you need a recovery plan. Your expense report may identify areas where you can reduce costs. Sales details may suggest you re-examine your marketing strategy. You should expect your CPA to critique your financials and suggest areas in which your business can be improved.
Does your business require you to carry inventory? If so, make sure you get rid of stock that has not had activity during the past year. Consider a clearance sale, or a return to the supplier, or a donation.
When did you last contact your customers to validate that your product and service continues to meet their needs? Have you sent them a reminder that you are still in business, perhaps have a new product, have new uses for a product or have cost-saving ideas?
Have you checked the competition? Are there new products with new pricing in the market? A great place to get some answers is an industry trade show. Suppliers are one of the best sources of market news.
In addition to a financial and marketing review, perform a self-evaluation of your capabilities and weaknesses.
Anticipating trends can be extremely valuable in keeping you current on marketing and sales strategies, customer desires, technology changes and the general economy. As your business grows, change will be inevitable. Small-business owners need to look ahead constantly and seek ways to adapt.