Year End Planning for Small Business Owners

As the year comes to a close, it’s crucial for small business owners to take proactive steps to ensure financial readiness for the upcoming year. Here are some essential financial tips to help you prepare before the year-end:

1. Prep for 1099s

Check that you have W-9 forms on file for every individual or LLC (excluding S Corporations) whom you’ve paid $600 or more for services throughout the calendar year (try running an Expenses by Vendor Summary report to start). If you notice any old or missing forms, reach out promptly to request updates.

2. Categorize and Reconcile Your Books

Now is the time to categorize and reconcile your financial records. Taking this step early can significantly reduce stress later when tax season approaches. If you're unfamiliar with bookkeeping or simply don't have the time, consider hiring a financial expert or accountant to assist you. This investment can save you (and your CPA) unnecessary panic in April.

3. Review the Year

Take a moment to reflect on the past year. Identify what went particularly well and what challenges you faced. Consider:

• What progress did you make towards your goals?

• What challenges did you work through and which are you still stuck in?

• What learning opportunities did you engage in?

• How has your work/life balance fared?

This reflection will provide valuable insights as you move forward.

4. Set Goals for Next Year

As you look to the future, start by setting 3-5 clear and actionable goals for the new year. Ensure that each goal is paired with measurable outcomes to track progress effectively. This focused approach will help maintain clarity and direction as you assess progress.

5. Plan for Downtime Over the Holidays

It is essential to give yourself some space to recharge during the holiday season. Begin by booking time off in your calendar and making a list of tasks that must be completed before year-end. Create a schedule that allows for a few completely work-free days, so you can finish the year strong while also enjoying some well-deserved relaxation.

Conclusion

Taking these steps before the end of the year will set your small business up for success in the new year. Preparing for 1099s, reconciling your books, reflecting on the past year, setting achievable goals, and planning for downtime are all integral components of a solid year-end strategy. Embrace the process, and you'll find that a little preparation now can lead to a smoother transition into the new year.