The end of one year and the beginning of a new year is a good time to analyze your financials. It’s also a good time to analyze your operations.
Here’s an example: one time a business client had a turbulent year with his business. By the end of the year, he was at his wit’s end and was considering selling or just simply shutting down.
I helped him review his operations, and he and I came to realize that the problem was that his business has grown faster than expected. This is obviously a good problem to have. But it creates challenges.
He had an employee, but the owner was still the one answering the phone, responding to e-mails, coordinating the work, dealing with collections, and just generally dealing with all the administrative tasks that come with having a business.
He also operated on the “any customer, anywhere” mantra. Meaning, he would drive hundreds and sometimes literally thousands of miles to serve anyone who came along.
He was seemingly well-paid for these excursions, but all of the travel — in addition to trying to keep up with the basics of running the business — was too much.
I suggested some simple changes — things that didn’t cost any additional money — and he ended the year a much happier camper.
Questions to ask yourself (and that I’m asking my clients) include:
How are you getting your work done? Are your processes and procedures working or are you stressed out?
If you have employees, what are they doing, and can you have them take over things that are currently on your plate?
- It might not always make sense to take on “any client, anytime.” So look at your sources of income. How much money are you really making from those sources when you factor in your actual costs and the time commitment involved? For example, if your service area involves a lot of out-of-state work, how much is it costing you in terms of travel costs and travel time to do those jobs? What’s the intangible cost of the added stress of traveling and trying to do everything else? Could you turn the same profit margin and have better quality of life by taking on more jobs closer to home and fewer jobs that involve travel?
These are questions I ask my clients this time of year (and throughout the year, for that matter).
“This blog post, along with comments that may follow, should not be considered tax advice. Before you make final tax or financial decisions, please secure a professional tax advisor to give you advice about your unique situation. To secure Jason as your accountant, please click on the ‘Services’ link at the top of the page.”