Year end planning is critical to keep your business on track.
For most companies, however, year end planning is the last thing on their minds. If you are like a lot of other entrepreneurs, you are pumped and ready to make something happen – no time for this planning nonsense.
The thing is, without at least some sort of priority list to achieve your goals, getting to your destination will be pretty tough. At the end of each year, there are two types of planning you should do: business planning for next year and tax planning to minimize your tax burden this year.
Year End Planning Questions
In the late fall, you have just about a month of effective work time left in the calendar year. This is a really good time to think about the past 10-11 months and schedule time on your calendar to plan for next year. By now, you probably have a good sense of where your business will end up financially by year end.
When you set up your business plan for next year, look back on this year and ask yourself these simple questions:
- Did you meet your financial goals?
- Did you meet your non-financial goals, including personal goals?
- If not, what put you off course?
- More importantly, what can you do now to get as close to your milestones as you envisioned?
Reflecting on your past successes and shortcomings is the best way to create a solid plan to grow your business next year.
Make a date with yourself and put it on your calendar (see Take an Imagination Day). Do it now – before you get caught up on the holidays with little time to focus on end of year planning.
You can reduce your taxes by prepaying for expenses you know you will have next year. This will allow you to deduct those expenses this year to offset your income.
- Prepay a month or two of office rent
- Buy office equipment you want for next year such as printers, computers, phones, furniture, toner cartridges and other supplies
- For monthly services that you subscribe to, ask your vendors if they have any annual prepayment discounts
- If you are going to redo your website, buy packages for stock images, website themes, hosting and content services
Since you know you will have these expenses anyway, use end of year planning to take advantage of tax-reducing opportunities now while you can.
A little planning goes a long way.