Autumn is a good time of year to step outside day-to-day tasks and think about the big picture for your business. Year-end is an opportunity to look back at what worked, identify what didn’t, make strategic financial decisions, and put your business in a stronger position for the coming year.
Whether your business is a solo venture or a larger operation, below are seven money moves worth considering before the calendar turns to 2027.
1. Apply What You’ve Learned
You probably already know whether you had a “good year” when it comes to total revenue. Now is the time to dig a little deeper and make adjustments.
- Which parts of your business performed particularly well?
- Which products or services were most popular and profitable?
- How did smaller ancillary aspects of your business or other sources of revenue perform?
Just as importantly, take a closer look at expenses. Understanding where you made—and spent—money this year can help you make better decisions about rates, staffing, services, and investments for next year. Take everything you’ve learned from this season and put next year’s financial plan on paper.
- What improvements do you want to make? (see Tip #3)
- Do you anticipate increasing wages?
- Will rates need to change?
- Are you planning new activities or revenue sources?
Then ask the most important question: How will we pay for it? Determining that answer in advance gives you time to evaluate options, arrange financing if necessary, and make thoughtful decisions.
2. Prepare Your Cash Flow for Seasonal Changes
While some businesses are truly seasonal, others experience a natural cycle of busy and slow periods throughout the year. Any kind of seasonality makes cash flow planning especially important since many business expenses can continue during off months.
Developing a cash flow forecast can help you determine how much cash-on-hand you’ll need to comfortably make it through low-volume periods. It’s also smart to leave room for the unexpected. A failed piece of equipment or unplanned repair shouldn’t jeopardize your plans for the entire year.
If you anticipate a cash flow gap, talk with your banker early. Establishing a business line of credit before you need it can reduce stress when the need arises.
3. Evaluate Equipment and Property Improvements
Does that printer have another year left in it? Is it finally time to replace the company vehicle? What about adding equipment upgrades, improving phone systems, renovating facilities, or adding another production line?
Year-end can be a good time to evaluate major purchases and improvements. Consider whether it makes sense to pay outright or finance an improvement. If needed, financing or leasing equipment could enable an upgrade while keeping cash available for emergencies.
There may also be tax considerations associated with equipment purchases and capital improvements. Your accountant or tax advisor can help determine whether completing a purchase this year or waiting until next year makes the most sense for your situation.
4. Give Your Existing Debt a Checkup
Every so often, take a look at how your business debt is structured. While interest rates are a factor, they are only part of the equation.
For example, would a different payment structure better align debt payments with the months when your business generates the most revenue? Would extending the amortization on a major property improvement provide greater cash-flow flexibility? Do you have adequate access to working capital?
A year-end conversation with your banker can help determine whether your current financing still fits your business needs now and for the future.
5. Don’t Wait Until Tax Time to Think About Taxes
One of the most important year-end conversations may be with your accountant or tax advisor. Once December 31 passes, some planning opportunities may disappear with it.
Your tax professional can help you evaluate projected income, equipment and property purchases, depreciation, retirement plan contributions and other decisions that could affect your tax position. Because tax planning can be beyond reducing this year’s tax bill, your tax professional can be particularly valuable to look at the bigger picture.
6. Review Your Fraud Protection
While you’re reviewing the financial side of your business, take some time to consider how you’re protecting it. Fraud attempts continue to become more sophisticated, and businesses of any size can be attractive targets.
Review who has access to your business accounts and online banking. Have you removed access for former employees? Are you using account alerts? Do you require dual approval for certain transactions? Are you using the available tools to help protect against unauthorized checks and electronic payments?
This is also a good time to remind employees that an urgent email or text supposedly from an owner, manager, vendor or financial institution shouldn’t automatically be trusted—particularly when it involves changing payment instructions or sending money.
A few minutes spent reviewing your financial controls could prevent a very expensive mistake.
7. Think About What’s Next for You, Too
For many owners, your business is much more than an investment. It’s something you’ve spent years—or even generations—building. That makes year-end a good time to think not only about next year, but also about your personal next season of life.
Do you eventually want to pass the business to your children? Sell it? Bring a family member or key employee into ownership? Are your estate documents and business succession plans up to date?
You don’t have to be approaching retirement to start these conversations. In fact, succession planning often works best when there isn’t an immediate deadline. Your attorney, accountant, financial advisor, trust professional and banker can help you begin exploring the financial implications of your options and help develop a plan that protects both the business you’ve built and the people who matter to you.
Planning Makes Perfect
It’s common for business owners to neglect working on their business because they are focused on working in them. Consider the end of the year as a good annual reminder to set aside time for taking a big-picture planning point of view.
And remember, you don’t have to make every financial decision alone. Your banker, accountant, attorney, insurance professional and financial advisor each bring a different perspective to the table. Bringing those professionals into the conversation before year-end can help you identify opportunities, avoid potential problems and make more informed decisions.
