The third quarter is an ideal time for small business owners to conduct a financial check-up to determine how to achieve their goals during the final quarter. There are numerous items to consider when determining if your business’s financial state meets your expectations.
It pays to regularly review your 2003 business plan. Compare the actual financial numbers to projections. If they aren’t on target, decide which can be achieved and how to get there.
If there are goals that are out of reach, review why they weren’t achieved and determine what can be done in the future to attain them. Categorize items according to those in your control, like expense reductions, and those out of your control, like the economy. Then take action on those within your grasp.
Making progress toward the goals is better than giving up. And start preparing projections of where you think the business will be at year-end so you can begin to develop accurate expectations for 2004.
Review and evaluate your business partnerships, including those with your banker, accountant, attorney and vendors. Consider your comfort level in meeting with them and asking for advice. Look at the fees you’ve paid and think about what you got for them.
Review pricing structures offered by your vendors, and the terms you offer your clients. If you’re not pleased, consider new partnerships.
When evaluating your banking partnership, review your charges and rates, and make sure you’re getting the most for your money. It’s critical to the long-term success of your business that you value the relationship and advice you get from your bank.
Look at the products and services you’re using, and determine if you need to make changes. If you haven’t talked with your banker recently, meet to discuss new products you might benefit from, like online features for your deposit accounts.
Now is also the time to plan your expenditures for the remainder of the year and make sure they’re in line with your goals. If one of your goals was to buy a building for your business, take advantage of low interest rates and look at real estate.
If you know you’ll have additional equipment needs this year or next, consider the potential tax implications and benefits of purchasing now. There are immediate tax advantages to small business owners who make new equipment purchases, including machinery and computers. Additionally, recent tax changes increase the amount of deductions small business owners can take for such investments. Review the options with your financial adviser and accountant.
If you don’t have a retirement plan, consider adding one for you and your employees. Check with your financial institution to see what options it offers. If you have a retirement plan, review it to make sure you’re taking advantage of the best products. Evaluate what the administrator provides, including investment advice, education for employees and ease of making and changing investments.
It’s not too early to begin planning for 2004. Identify practices that worked this year and consider continuing them. Re-examine the challenges you faced and consider changes to avoid or better prepare for them.
Successful business owners develop a consistent long-term strategy built on short-step incremental changes rather than on major revisions. Establishing a regular review of what’s working and what isn’t can ensure your business stays on the path to success. Jane Bittcher is vice president and manager, business development group, Fifth Third Bank. Reach her at (614) 233-4562 or [email protected].
