In the rush of chaos that marks the end-of-year holidays, it’s easy to let things slide in your business. Folks often take at least a few days off to spend time with family and friends, and vow to clean up the mess in the new year. The trouble is, once that calendar page turns to January, it may be too late to position your company properly for the end of the old year.
Want to start the new year off right? Then try to avoid making these five common mistakes:
1. Waiting until the new year to address your tax concerns. Waiting until January to make changes in the way you’re managing your business's tax liabilities is too late. Make an appointment to sit down with your accountant or bookkeeper in December while you can still make critical changes that will affect your profitability and tax obligations. Although everyone’s busy at the end of the year, you must make time for this critical meeting. Your accountant isn’t going to get less busy between now and tax time, so make the call and ensure that you’ve done everything you can to make your business as financially healthy as it can be.
2. Failing to review recurring bills and contracts. Part of making your business more profitable is minimizing your expenses. To help with that, it’s critical that you take the time every year to review your recurring bills. If you’re already committed to paying a certain amount per month, it’s easy to get lazy and accept the status quo rather than making sure you’re really getting the best value for your money. So look at every dollar that goes out the door—including bank fees, loan interest rates, credit card processing fees, telephone and Internet services—and make sure you’re getting the best rate possible on each of these charges.
3. Neglecting to max out your 401(k) or SEP IRA. In the event that it’s looking like you’ll end the year with some extra funds lying around, you should take advantage of the legal ways you can shift your assets and minimize your tax liabilities. Money invested in your SEP IRA or your 401(k) yields direct, profound tax savings.
4. Failing to reflect on history. I can’t overstate this point: If you breeze from year to year without taking the time to look back at your successes and failures, you’re missing a huge opportunity to learn the lessons that your business past holds for you. Figure out what efforts were the most profitable for your company, and resolve to do more of those things in the year to come. Likewise, be sure to eliminate the projects and tasks that had you spinning your wheels—working for little gain—this year. Learn from your history, or you’re certain to repeat it.
5. Not thanking your customers properly. So many of us end up sending a generic holiday greeting card or a stale fruitcake to the people who are the lifeblood of our company. If all you do is send a card in December, you’re missing a great opportunity to really connect with your customers. Instead of reaching out just once during the holidays, make sure you check in with your customers—you know, the ones who send the checks—throughout the year. A thank-you email or a thoughtful gift means much more in July—when it’s unexpected and not arriving in a slew of mail from other companies trying to fulfill their obligations—than it does the last day before employees take off for the holidays. Create the habit of thanking your customers all year long, and you won’t find the pressure of the holiday season necessary or relevant to your business.
Taking steps to successfully wrap up your business year should happen every day, all year long. By creating the sorts of good habits that healthy entrepreneurs swear by, you'll be turning the maintenance and nurturing of your company into behaviors that become as natural as breathing.
When you end the year right—priorities straight, profits maximized and customers content—then you’re free to use January as you would any other month: a time to work hard and generate new business.
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