The fourth quarter is often the busiest time in the business world for both your company and your life as a small business owner or franchise owner. Because most new initiatives and budgets begin January 1, Q4 is an important time for small businesses and franchises to reevaluate their plans, ensure business stability and position themselves for growth in the new year.
Use these five tips to get your business in order and finish out the year strong.
- Check and move inventory: Q4 is a great time to take stock of the inventory you have on hand and make a plan for new items. Bringing old inventory that hasn’t been moving well into the new year takes up valuable space and can tie up important capital as you work to restock your business. Develop a plan to get rid of old inventory by hosting a clearance sale, creating promotional bundles or offering other incentives to buyers. Some items can even be donated, giving you an opportunity to clear some space, do something good, and possibly receive a tax credit for the donation. Take note of the types of inventory that haven’t been selling and factor that into your plans for next year.
- Revise your budget: By now, you have three full quarters of financial data to look over and use to generate next year’s budget. While 2020 was a “different” year to say the least, there are some important assessments you should be able to make. Did you underestimate the spending in some areas of your business? Can you find any cash leaks and plug them heading into the new year? Are your sales goals for Q4 realistic? Take a look at your P&Ls, balance sheets and cash flow statements to determine your budget and financial next steps.
- Revisit industry partnerships: When is the last time you spoke with one of your crucial suppliers or an industry partner that has played an important role in your company? Q4 is a good time to check in on these partners and nurture your relationships, especially if there are financials involved. Try to negotiate a better payment term starting in Q1 or reexamine a major client’s needs to learn how you can get more of their business next year. Also take this time to update contact information and remove any outdated vendor contacts to keep your records organized. If you own a franchise, now’s the time to check in with your franchisor to ask questions about their plans for next year. Are they rolling out new products, technology or marketing programs you can benefit from? Some of these new items might come with a cost attached, so it’s important to ask and prepare now for these expenditures.
- Offer unique end-of-year promotions: When the holidays come around, all businesses are focused on pushing inventory through sales. In order to compete, your business should also consider hosting unique promotions or specials to entice customers. Discounts can work well, but also think creatively. Perhaps you can partner with another small business to hold a joint promotion, offer free gifts with purchase or improve customer loyalty rewards for a short period of time.
- Start planning for Q1: Aside from your budget, there are plenty of things you should do to start planning for the new year. One of the biggest things will be getting a head start on your business’s taxes. Ensure you have all your accounts and paperwork in order to get a jump start on next year’s taxes. Also start formulating plans for new products lines, marketing campaigns and growth initiatives you want to launch.
As a final tip, use end-of-year planning to determine your capital needs heading into the new year. If you think recapitalization is needed to push your business over a financial hurdle, contact Tenet Financial Group. We help small business owners assess their needs and determine potentially available funding products to help them infuse more capital, pay down debt, pay salary, buy equipment and much more.