December is the time of year when many small service businesses suffer from an alarming drop in usual business. Regular customers take vacations and get busy with the family obligations that run from the end of November all the way through the Holidays and into the New Year. Depending upon the type of business you manage, this drop in business can be a real shocker if you haven't planned for it and can influence your decision-making as you close out your fiscal business year.

How do you end your business year? Some push against the trickling river, lamenting about how bad business is. Others just plain stop laboring to create new business and set to work taking stock, reviewing their business progress and formulating a new plan for the coming year. It is a perfect time to handle the end-of-the-year tasks that usually stay perpetually on the back burner. Smart professionals see the dark days of winter and the slow down of business as an opportunity to clean up old business, refine business processes, and organize their files and their office spaces.

Why is now the time to do this? If you are like most business owners, you already have a massive list of to-do items that you have ignored, neglected and continued to put off. The best way to position your business for success in 2010 is by leaving your business problems behind in 2009!

What to Do? Where to Start?

There are several general solutions and specific activities that will contribute to the orderly closing of your business fiscal year. The number of possible activities that one can engage in prior to the end of the year depends upon how well you managed your business through the year. The following 10 tips are but a guide to help you identify where you might start your year-end closing process and definitely will help you organize your thinking and tasks as you move forward in the process.

1. Review all your systems from top to bottom. Carefully examine what's working and what's not. When I think of business systems I think of methodical processes used as mechanisms for providing specific goods or services to customers in a well defined market place. Using a systems approach, you will want to assess your business strategy, vision, mission and values, existing policies and procedures, your budgets, financial health, and more. You'll need to decide where the problems are and what you are tolerating or putting up with in your business. It might be a faulty printer or a troublesome computer, a client who is more trouble than he's worth, refining your policies and procedures, or bringing your outmoded website up to date. Determine what you can do to fix the problems or if you need additional help.
   
   Whatever you do, don't assume anything. Don't assume that just because you've had a certain system in place that it is still adding value to your business or to your customers. If you aren't sure, conduct a SWOT analysis. You may be surprised to find that what you have been tolerating has taken precious energy to maintain and the habit of ignoring it has been preventing you from being more successful!

A system review can be an eye-opening experience for business owners.

2. Review your business strategy. Entrepreneurs and business managers are often so preoccupied with immediate issues that they lose sight of their ultimate objectives. That's why a business review or preparation of a strategic plan is a virtual necessity. While this does not insure your business success, without it a business is much more likely to fail. A sound strategic plan should:
   
   
   • Serve as a framework for decisions
   • Provide a basis for more detailed planning
   • Explain the business to others in order to inform, motivate & involve
   • Assist benchmarking & performance monitoring
   • Stimulate change and become building block for next plan.

3. Determine who your best customers are. You may be surprised to find out that your best customers aren't who you think they are. Examine all your customers through a profitability lens. Just because you always seem to be doing something for certain customers doesn't mean they're the ones who are the most profitable. During my own end-of-year review, I often find that my needy clients and my most profitable clients are two different groups. Once you find out who your best customers are, you'll want to really give them the VIP treatment!
   
   Now, touch base with your best customers. Now that you know who they are, be sure to tell them you appreciate their business and ask if there's anything you can improve on or do differently to help them. I always like to send out an end-of-the-year letter to my clients. It's a quick, easy way to let them know I care about their business and to encourage them to give me constructive feedback.

4. Review your marketing campaign. The end of the year is a great time to take a look at which marketing efforts are driving your business and which are not. Don't hesitate to make changes if you think your current efforts are not paying off.  If your strategy has not paid off then you'll want to make the change before you begin another year.
   
   Now, take a look at your marketing materials including your website. This includes your business cards, brochures. Make sure all the information is up to date and current. It is a good idea to make changes and improvements to your website to keep people coming back. Does the layout (colors and design) match your collateral materials and how you are presenting your brand? Test all your outgoing links and online forms, and automated outgoing messages. Now is a good time to add some fresh content.

5. Consider technology upgrades. If you need a new printer or computer or a new phone system or software to help you run your business more smoothly, the end of the year is a great time to make those upgrades. Technology upgrade can make a huge difference in your daily life and can focus your attention on the things in your business that really matter.

6. Reorganize your files and office. Now is a good time to purge your office and get rid of all that stuff you either don't need or that doesn't serve your business anymore. Clean out your business files and organize their contents so you know where everything is. You might even freshen things up in your office with a new coat of paint or some potted plants. I believe that our external environment influences our mental processes. It is hard to be energetic, creative and positive when we are surrounded by clutter and chaos.

7. Get your financial books in order. For some small businesses this is really difficult, while for others it's a breeze. But whether you are one of those solo entrepreneurs with a box full of receipts that haven't been entered yet or a small business owner who has a bookkeeper to manage their books, you must get this step done. I recommend to small business owners that they invest in good accounting software like QuickBooks. It makes life so much easier!
   
   Now, determine your financial position. It is imperative that you assess where your business is now relative to the previous year and to your financial projections moving into the New Year. There are three areas that you will need to examine:
   
   
   • The Balance Sheet is a summary of how your business is doing financially at a particular point in time. It shows all your business's assets, liabilities and equity.
   
   
   • The Income Statement lets you see at a glance whether or not your business is profitable at a particular point in time by itemizing your revenue and expenses, resulting in a profit or loss.
   
   
   • The Cash Flow Statement reconciles your opening cash with your closing cash for a particular period, showing where the money has gone. To prepare a simple cash flow statement, list and summarize your business's cash flow inflows and outflows for each of these three areas:
     
     
     • Operating Activities – revenue and expenses
     • Investing Activities – assets purchased and sold
     • Financial Activities – loans and repayments

8. Evaluate your Goals from last year. Now that you know how your business is performing it is time to take a look at how it got where it is today. Pull out your business plan and any other planning documents and action plans, and review them. Did you make your benchmarks? Did you achieve your goals? Did your business accomplish what you set out to do? Why or why not? Carefully record your notes about your successful accomplishment of your goals or lack of it. These will come in handy when you do your business planning for the upcoming year.
   
   Now, plan for the coming year. What did you learn this past year? Was there enough time for you? Creativity and new ideas cannot come from an empty well. Now that you've done the groundwork you are ready to do some business planning:
   
   
   • Set next year's SMART goals
   • Prepare strategy and action plans
   • Revise your business plan to insure that you are going to accomplish what you want to accomplish.

9. Develop accurate financial projections. Every small business will need to make reliable financial projections when moving into the next fiscal year. If you plan on 50 percent revenue growth during the next year you'll need to demonstrate how that growth will happen. Forecasting is critical at many stages of a company's life—when you are looking for financing, when you want to gauge the potential profitability of a new product or service, when you want to see the impact of expansion or cutbacks, or when you need to assess other important business decisions. Coming up with reliable projections isn't guesswork. It requires you to analyze your market, economic trends, and business assumptions to come up with a reasonable forecast. Building out different financial outcomes for your business can give you a more accurate picture of revenues you can expect. Develop a best-case scenario that assumes the most aggressive growth rate as well as the worst-case scenario that takes into full account of potential risks. Between these two extremes will be the most likely financial scenario for your business, which is likely to include gradual business growth and both planned and unanticipated expenses.

10. Meet with your accountant. Taxes and business planning go hand-in-hand. Now is the perfect time to meet with your accountant to evaluate your current tax strategies and plan your taxes. Discuss what you can write off and how you might better position yourself financially – personally and professionally in the coming year. You'll be glad you did.

This might seem like an overwhelming list but most of the items are easy to do, and they take attention. Take care of yourself first; you don't have to make yourself crazy looking for new business when your business slows down. Just create the space for it to appear. And like most things you might procrastinate about, these tasks are not as painful as you imagine once you pay attention to them. You might even be amazed at how liberated you will feel if you do. By engaging actively in the fiscal business year-end process you will be participating in your business's success by uncovering a wealth of realistic information. As a bonus you might be surprised at how much more smoothly your business will run next year, especially if your business typically experiences a slowdown at the end of the year. It is a great feeling to know that your planning is SMART (specific, measurable, attainable, realistic, timely) and one that you will be eager to replicate each year!

Wishing you Inspired Business Success in 2010!