For small business owners, early July is a great time to assess how the year is shaping up, make adjustments that boost revenue or reduce expenses, and take advantage of new opportunities. But how do you get started and what should you focus on?
The Business Advisory Services team at Excelsior Growth Fund (EGF) has put together this step-by-step list that can help you stay on top of your business now and make the rest of the year your business’s best yet.
- Pull your six-month financial reports Look at how your business has been doing from (January 1 to June 30). Review your profit and loss statement and a balance sheet statement early in July. Doing this first will help you understand whether your bookkeeping records are in good order, or identify issues and make corrections. (If you’re not already using bookkeeping software, Consider QuickBooks®Online, Freshbooks, or Sage One (but there are also many free software programs.)
- Conduct a year-over-year comparison of financial performance Use the interim statements you generated in Step 1 to (check your current year against last year). Are revenues and profitability increasing? If either or both are stagnant or decreasing, find out why and correct it quickly.
- Conduct an actual-versus-budget analysis of your business’s financial performance This will help you see where you’re over- or under-spending and how your revenue stacks up against your forecast.
- Tweak your business strategy Based on what you learned from Steps 2 and 3, you can tell a lot about the direction in which your business is heading. Now’s the time to make necessary adjustments like boosting marketing and advertising, increasing your social media presence, freshening inventory, or hiring staff.
- Take a course in an area that needs improvement Could you benefit from help with cost management or digital marketing? Are you on top of changes in your industry? There are loads of online webinars and courses available and many are free or low-cost, making them both convenient and accessible for busy entrepreneurs. Local courses – provided by business development organizations, colleges, chambers of commerce, and others – can also help you build your community network and presence.
- Attend an industry-specific conference or networking event In addition to meeting potential business clients and vendors, you can strengthen your brand presence, establish yourself as an expert in your field (offer to lead a discussion or act as a panelist) and stay on top of trends, opportunities and challenges.
- Identify one process area to improve – from marketing to inventory control to process efficiencies and more – that could really use a boost and hire a professional consultant to help. Rather than see this as an additional expense, consider it a wise investment: Even a consultation of a few hours with an expert can result in tremendous improvements to your business operations and bottom line.
- Meet with your tax professional. At tax time, you’re too busy with filings to have an in-depth conversation with your accountant or tax preparer. Mid-year is an ideal time to discuss strategies that can benefit your business’s bottom line this year, ensure that you’re current on all tax obligations and prepare for next year. For example, your tax professional can advise you about the pros and cons of purchasing or leasing business equipment that you’re considering, and help to ensure that your income statement and other financials present a strong story when you’re ready to apply for financing.
- Review your personal finances. It’s common to neglect personal finances while dealing with the responsibilities of running a business. What do you need, financially, to get you through the rest of the year? Is it time to increase your salary or plan for a distribution? Are you keeping up with personal credit obligations? How much, if anything, are you saving for your retirement? As a small business owner, your personal credit rating is as important as your business’s rating because most lenders will factor an owner’s credit score into their loan decisions.
- Meet with your local banker. Even if your current banking needs revolve around day-to-day transactions, it’s a great idea to stay in touch with your local bank representative. Together, you can review your accounts and transactions to see if you can save money or get more benefits. You can also talk about your plans and potential future funding needs, and whether your business is eligible for a new or increased line of credit or a loan. Knowing this before you need it helps you avoid risky loans or predatory lending down the line.
Invest the time in your business’s success
Commit to spending about 4-5 hours each week over the next month to tackling the steps on this list and soon, you’ll find that the benefits are undeniable for your business’s success.
About Excelsior Growth Fund
At Excelsior Growth Fund (EGF), our mission is to help New York businesses grow by providing small business loans and advisory services. As a nonprofit organization and a U.S. Treasury-certified Community Development Financial Institution (CDFI), we’re a responsible lender you can trust. For more business insight and information about loan programs available for small businesses, contact EGF today.