We are just 2 months away from the new year, and you’ve likely started planning for 2023. Have you thought about how your business fared in 2022 and what steps you need to take to ensure a successful year in 2023?

Like in all spheres of life,  it is important to take stock of the past and learn from both our successes and failures. This helps us make better business decisions for the future with lessons learned from the past in mind.

Your year-end should seek to identify patterns and trends, take stock of the overall performance, and outline critical areas that need attention in the coming year.

This helps you make more informed decisions about your business goals and strategies for the coming year. It also helps you get a “zoomed-out” perspective of your high-level goals, mission, and values, and how your business activities fit into that big picture.

Evaluating the Current Year

Imagine taking a long car trip without mapping out the route beforehand or keeping track of your location along the way. It would be difficult to get to your destination without getting lost at some point. 

The same is true for businesses. Without evaluating where you are and mapping out where you want to go, it’s easy to get off track.  Evaluating your business at year-end helps ensure you are on track and are making progress toward your goals.

A good starting point is to generate a list of questions related to your business goals. For each goal, ask yourself:

• What were our main goals for the year and how well did we achieve them?
• Did we make any progress on our long-term goals?
• What were our biggest successes and failures?
• What did we learn from our mistakes?
• What went well and why?
• What could we have done better and how can we improve next year?
• What were some unexpected challenges or opportunities that arose?
• What was our customer/client experience like this year?
• How did our team members perform?
• What processes or systems need to be improved?
• What kind of growth did we achieve this year?
• What is our financial situation and how can we improve it next year?

These will give you a crystal clear idea as to what needs to be done differently or improved upon to make your business even more successful in the new year.

But you can’t really improve what you don’t measure, so it’s important to take a close look at your business numbers. Review your sales, profit and loss, expenses, and any other relevant financial data.  This will give you a clear idea of where your business stands financially and help you make more informed decisions about spending in the coming year.

What about your tax situation? 

Have you been keeping up with your estimated tax payments? Are you on track to pay your taxes in full when they’re due? Are there any strategies you can use to lower your taxes next year? These are all important questions to answer as you wrap up your financial planning for the year.

Finally, don’t forget to document everything! Create a file or folder where you can store all your year-end information. This will make it easier to reference when you’re working on your goals and plans for next year.

Planning for 2023

When planning for the coming year,  it’s important to set both short-term and long-term goals.

Short-term goals are those objectives you want to achieve in the next 12 months. They should be specific, measurable, attainable, relevant, and time-bound (SMART). Long-term goals are objectives you want to achieve in the next 3-5 years. While they don’t need to be as specific as short-term goals, they should still be realistic and achievable.

In addition to setting SMART goals, you should be hyper-intentional with dates and milestones. This means setting a date for each goal and breaking it down into smaller milestones to help you stay on track. 

• Example: If your goal is to “increase sales by 20% next year”, you might break that down into quarterly milestones of 5%.

Or perhaps you want to  “Protect Your Profits Through Data-Driven Tax Planning”. Your milestones could be something like:

• 1st Quarter: Evaluate last year’s tax return and make adjustments to your estimated tax payments if necessary.
• 2nd Quarter: Review your business expenses and make changes where needed to save on taxes.
• 3rd Quarter: Begin tracking your quarterly sales and review at the end of the quarter to ensure you are on track to reach your goal.
• 4th Quarter: Finalize your tax planning for the year and make any necessary adjustments to your estimated tax payments.

By being intentional with your goals and milestones, you can better ensure that you’ll achieve the results you’re striving for in the new year.

How to Do It Simultaneously

Evaluating your past year and planning for the coming one doesn’t have to be an either/or proposition. It shouldn’t be a flip-the-switch process where you’re either in “review mode” or “planning mode”.  You can, and should, do both simultaneously.

One way to do this is to develop robust systems and processes that you can use year after year. This will help you track progress and identify areas of improvement on an ongoing basis, so you’re always moving forward.

For instance, instead of cleaning up your finances at the end of the year, develop a system for tracking and reconciling your accounts on a monthly basis.

This will help you avoid year-end surprises and give you a birds-eye view of your financial situation at any given time, making it easier to make improvements on the go. It will also help you tidy up your previous reports while going forward into the new year (and beyond)

Similarly, instead of waiting until the end of the year to review your business goals, create a system for regularly checking in on your progress. 

• Tip: This could be something as simple as setting aside time each month to review your goals and progress. Or you could create quarterly or semi-annual check-ins to keep yourself accountable.

The key is to find a system that works for you and your business. Use the positives and negatives of 2022 to better plan for 2023. Correct errors as you go and double down on positives to make next year even better.

Don’t Go It Alone

Evaluating your previous year and planning for the coming one doesn’t have to be mutually exclusive. You can, and should, do both simultaneously to ensure that your business is moving in the right direction.

Unfortunately,  many businesses make the mistake of trying to do it all on their own. They either don’t have the time or they don’t know where to start. As a result, they either don’t review their past year at all or do so haphazardly, which can lead to overlooking important details.

The good news is that you don’t have to go it alone. With an expert financial planner by your side, you can concentrate on running your business without really worrying about your financial position now, or in the future.

A financial planner, like Phillips Business Group, helps you review your past year, identify areas of improvement, and develop a comprehensive plan for the coming year. With a plan in place, you can focus on what’s important: running your business and achieving your goals.

We will develop systems and processes to make it easier to track progress and identify areas of improvement so you can step into the new year with confidence. Our goal is to help businesses like yours protect their profits and grow their wealth.

Check out our services to see how we can help you make 2023 your best year yet!