‘Tis the season to get your house in order. If you're hosting relatives for the holiday season, you quite literally need to get your house in order, but that's not what I'm talking about.
I'm talking about your business. As we enter the final weeks of the year, it's a great time to evaluate where you are in your business and start making plans for the new year.
For most of us, at this point in the year, we're heads down with work and are in survival mode, trying to wrap up projects and clear the calendar before everyone heads to the slopes.
What I'd like to invite you to do, is take some deep breaths, lift your head up, and take in the larger picture of your past year of business. Doing so will help you both identify areas you need to course correct and help set you up for success in the coming year.
Let's do a little housekeeping together, shall we?
We can talk about all kinds of metrics and whatnot, but let's get straight to the bottom line: your money.
When you started this year, did you have an income goal in mind?
If you didn't, you should – income projections are part of running a smart business. Start now by planning for what you'd like to make in the new year, using this year's numbers to help plot next year's goals.
If you did set a goal for this year, how are you tracking against it? Assuming your goal was based in reality, you should be hitting right up on it.
Are you over the mark? Awesome! Take note of:
- the areas, or income streams, where you beat your projections (i.e. affiliate sales)
- the reasons you think you did (i.e. wrote more product reviews on the blog)
Dig into these details and identify the ‘whys' of your success.
Your analysis will help you plan for next year goals and where you might want to shift your resources.
Do you still have a good ways to go? Don't panic (unless your pantry is empty, in which case do what you need to do to feed your family). Try to identify:
- the reasons you're off target (i.e. had to take care of ailing family and couldn't work full-time)
- quick ways you can make up income (i.e. following up on unpaid invoices)
There's still time left this year to shift gears a little. Also, taking an honest look at why your income is short may help reveal some areas where you can take immediate action.
We talked about what's coming in, but this is a great time of year to evaluate what's going out.
If you're not already balancing your accounts monthly (I prefer weekly), start now.
Go through the last month or two of your business account registers. Look at every dime you've spent and ask yourself whether that was a worthy expense.
Cost of Business
Every business has expenses – that's a given. But take the opportunity to look at what your biggest expenses categories are and evaluate how you're doing.
Spending too much?
I did this exercise a couple of years ago and discovered I'd spent a disproportionate amount of my income on travel, specifically traveling to WordCamp conferences.
While I was well within my overall budget (I wasn't going in debt to hit these events), I had over-spent in this area. After evaluating, I determined that the value of spending that money was worth the eventual return, so I didn't sweat it.
The point is to know where your money is going and make sure it's justified.
Spending too little?
That same year I looked at the numbers and saw I'd spent less than $25 on advertising.
As a freelance consultant at the time, advertising wasn't exactly a line item I needed to budget much toward, but still… Looking at the numbers helped me discover an area where I had plenty of wiggle room to try some new things.
I pay monthly fees for some online tools (here's a list of my 2013 subscriptions). In time, those tools change, and it's up to me to make sure I'm not bleeding cash where I don't need to. For instance, if you peeked at my list, you'd see some proposal writing software on there. Since taking a new job that doesn't require me to write proposals, I've stopped paying for that subscription.
Do you have any recurring expenses you can get rid off? Review your accounts and stop payment for services you're not using.
Every. Penny. Matters.
I don't care if you have lots of pennies and plenty to spare.
Look at your “not totally necessary” expenses for the past year and see if there are areas where you could trim the fat.
Buying stuff is fun, especially when it's “on the business account.” I have a penchant for fresh office supplies.
No preaching here – I'm just saying make sure that where you do spend those discretionary dollars you're getting good value in return.
Okay, I'm done talking about money. For the most part. 🙂
For the past couple of years I've posted year-end reviews on my blog – doing exactly what I'm encouraging you to do in this post.
While you don't have to write publicly about your goals, I hope that you write them down somewhere. If you're not already, there's no time like the present to start!
Writing down (on paper on the keyboard) what it is you want to achieve is powerful. Sharing goals with another human (through voice or writing) is both a tremendous motivator and encouragement.
Before you can say those things, though, you have to think about them. And that's what I'm asking you to do here.
Pause. Reflect. What have your most miserable moments in work been this year? What about your most satisfying?
Mark those moments and use them to help you set goals for the things you want to avoid specifically and purposefully chase.
Don't know what your goals should be or what it is you want?
Defining what it is you want to do and achieve is hard work. I know because I've spent years in the past spinning my wheels.
If that's you, take a few minutes to listen to this segment from my interview with Troy Dean on the officehours.fm podcast:
What's In Store For Your Business in 2016
Think back to where you were last year on January 1st (or skip ahead to the 2nd or 3rd if you brought in the new year a little too intensely – ha!).
What do you wish you could tell yourself on January 1, 2016, regarding running your business?
Maybe you'd tell yourself:
- find more clients like ____
- don't work with people who ____
- ____ was a great use of time with a fantastic return
- I could've skipped ____ and caught up on sleep
- I know that carving out some time to do ____, even though I don't feel like I have any time, can net big results
Of course, we don't have the benefit of hindsight, but we DO have the ability to map out goals, both personally and professionally, and this is the perfect time of year to do it.
If you decide to blog about yours, leave a link in the comments. I'd love to hear what you're mapping out for 2016.