The holidays are a great time to assess your year and plan for the New Year. Like wellness checkups with your doctor, it’s a good time to evaluate your financials.
You probably know to make your year’s final retirement account contributions and to make your charitable donations. If not, some tips follow below.
The most-important thing you can do is plan. Fully understand your financial situation – from cash flow to tax liabilities.
Ten recommended actions:
1. Inventory your year
If you’re taking the pulse of your business, of course, the first thing to consider is your cash flow. If your cash flow is poor, you feel poor because you can’t pay the bills nor can you use money for what you’d like to do.
Your image can also suffer with vendors or with customers, if you don’t manage your cash flow. Evaluate how you best manage your cash flow.
Review your final financials with an eye on your year-to-date numbers and compare them to the year before. Assess your progress vis-à-vis your industry and competitors.
Reflect on trends – the products and services that are popular and the strategies that work and those that don’t.
2. Assess your investments
Look at any investments you made in your business. What equipment or software proved to be useful?
3. Review your pricing
Consider your options. If you plan price increases, strategize how to break the news to your clientele.
4. Determine New Year objectives
After looking at your overall business and cash flow, examine how the New Year can bring growth. Consider your new objectives and assess their potential. Plan how you can fine-tune your efforts.
Strategic planning in finance for growth means avoiding trendy fads. Instead, it requires an ongoing down-to-earth approach in order to create value. Set up and adhere to a finance checklist for growth.
5. Consider deferring income
Decide which ways, if any, to defer income if it works to your tax advantage.
6. Pay down your high-interest debt
Pay off debt. You’ll have write-offs and will save money long term.
Would you benefit by refinancing your small business loan to get a better interest rate and lower loan payments? Certainly, you would benefit from a lower interest rate and loan payments if you have cash flow issues.
7. Retirement plans
Use a portion of your income to max out any retirement contributions.
8. Invest in your children’s college future
For possible tax benefits, you might consider opening or investing in a 529 account, Coverdell or custodial account.
If you’re currently paying for tuition, you can take advantage of the American Opportunity College Credit.
9. If you’re an investor, rebalance your investments
Consider any changes in your situation. For example, what are your objectives and risk tolerance? Do you need to reallocate your cash? How about tax losses for tax purposes?
Whatever you do, be sure to analyze and plan for any tax implications.
10. Save for tsunamis
Every entrepreneur has unforeseen expenses. You should always have enough money to pay for six to nine months of expenses.
From the Coach’s Corner, related tips in finance:
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“About the time we can make the ends meet, somebody moves the ends.”
Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.