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End of Year Review and New Year Planning

Posted on February 28th, 2021

Tax Planning Attorney

We have been through a wild and crazy 2020. Hopefully you have had an enjoyable time with your family during the holidays and now it’s time to get back to work on your business.   

This means looking at your numbers and figuring out what went right or wrong in your business based on the cold, hard facts of your financials. You might be asking yourself, how can we make any determination based on numbers when we are in the middle of a pandemic? This is exactly why you need to look at your numbers.

Running your business is like flying a plane. If you have ever sat down in a cockpit, you saw lots of dials, buttons, levers, and controls. Would you want a pilot that doesn’t know what each of the controls do to the plane? Then why do many of us run our businesses like a pilot that doesn’t know his own controls?

Know Your Numbers

If you want your 2021 business year to be great financially, then you have to know your numbers. Now, you should be asking, what do I need to do next?

The first step is understanding how you did financially in the past three years, and why you got the results that you achieved. Did your assumptions hold true, especially in light of the events that happened in the past 12 months?

Once you have analyzed the past, what is it that you want to achieve in the future, and why do you want to achieve it? What will be the key performance indicators that you need to track so that you will know what success looks like?

An Example

A law office’s client once said that they wanted to introduce 10 new items to their menu. They just added the new items to the menu, without any advertising or fanfare. Nine of the 10 items were an absolute flop on the new menu, and actually performed worse than the 10 items that he pulled from the prior menu. He instantly saw this as a failure because all he did was look at the numbers. He did not ask why he received the results that showed up in the numbers. Instead, he simply accepted the numbers and returned to the old menu.

What could this client have done differently? Do you believe he put thinking time into the results? For example, it could have been a wide array of factors that played into the flop of the new menu. The season could have had an impact on it, or his marketing effort could have been poor. Maybe the staff needed to be trained better. We can all think of a myriad of different reasons that the menu wasn’t successful, and the numbers only paint part of the picture. We always have to get back to taking time to think and reflect on why the results happened. Without reflection, we only get a tiny piece of the story.

Planning for Vaccines

As a quick aside from today’s article, the vaccines are shipping across the country. We are being frequently asked whether or not an employer can force their employees to take the vaccine. The simple answer is “yes,” but is that what you should do as an employer? An alternative could be to offer some sort of bonus for all your employees that do get the vaccine. Think about the cost to your business of having an employee out for two weeks, or even possibly coming into work, unknowingly infected with COVID-19. Your whole team could be out for two weeks and your business shut down.

Learn More Business Tips Today 

Want to learn from other business owners, restaurateurs, bar owners, and hoteliers by watching some business interviews online. An attorney, like a Montana tax planning attorney from Silverman Law Office, for example, might have some good insight on how to plan for tax season. 

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