When conducting year-end reviews for your business, you may want to consider looking at more than just your sales and cash flow.

DECEMBER 23,  2016

As you review and assess your business over the past year, your first thought may be on profits. While analyzing your sales and cash flow is important, when it comes to year-end reviews, you may want to look at the overall big picture. There are a variety of minor pieces of the puzzle that can make a big difference in whether your company is successful.

“A business can be looked at as a well-oiled machine,” says Hillel L. Presser, president of the Presser Law Firm and author of Asset Protection Secrets. “If one piece or part is broken, the entire machine doesn’t work. Many business owners focus way too much on the minute details of their businesses and fail to see the larger picture. The goal for every business is to offer the best merchandise or service. In order to do so, every procedure and method should ideally be completely streamlined.”

Evaluating the whole picture is important, agrees business and personal development expert Douglas Vermeere.

“My business is working with speakers and coaches,” Vermeeren explains. “Most of them focus much of their efforts on presentation skills and neglect the balance of their businesses. Many people in the service industry approach things in the same way, focusing mostly on what the customer sees. A business can be compared to an iceberg. The majority of what makes the iceberg is never visible to the observer. Your business cannot be successful if you focus only on cosmetics, rather than the whole iceberg.”

When conducting a year-end review, consider the following vital business components to help you look at the big picture.

Examine Sources of Business

During a year-end review, you may want to take a close look at the origin of your business. “Review not only overall numbers, but particularly where business comes from—namely referrals,” suggests professional photographer Everardo Keeme. “I want to know, and then reward, those who refer me. I do this from two aspects. I look at who referred me the most often and who gave me the best referrals—so quality and quantity.”

You may also want to identify where the year’s most profitable transactions came from during a year-end review, concurs Vermeeren. “Look carefully at how and where you found the clients who created those lucrative transactions and what made them work so well,” he says. “Your best transactions are what make your company more profitable. Having a clear view of what those transactions were and how they came about will give you the ability to create more of them over the coming year.”

Consider Costs Versus Pricing

In a rush to consider profits and overall sales, it’s not uncommon for business owners to overlook the important details of how much you’re spending versus how much you’re charging. “Remember to review your costs, such as vendors and materials, and revise pricing sheets and product menus accordingly,” advises Keeme.

“Your business may not have the volume to sustain a shrink in cost of goods versus profit margin,” Keeme continues. “While reviewing this [ratio] should ideally be done several times a year, it’s especially important to complete this task at year end when you have all of your sales and costs together and can evaluate a true average from month to month.”

Evaluate and Gather Your Team

The end of the year can be an ideal time to take a close look at your employees and evaluate their performances. When doing so, you may want to take their contribution to company profits over the last year into consideration. Also consider analyzing if their work performance and attitude dovetail with your company’s goals and mission. If you discover that there are employees lacking in performance or buy-in, you can then make plans for addressing this issue.

You may also want to look at your overall business team and ensure that your company is well-protected, advises Presser.

“See that you have the necessary experts on your team,” Presser says. “The year end is a good time to meet as a group and get on the same page. Doing this could save you substantial money in the future.”

Examine Everyday Processes

“Now is a great time to take note of what’s working and what’s not within your everyday processes,” suggests Nick Candito, CEO and founder of Progressly, a centralized platform for business processes.

“Companies today are burdened by siloed, difficult-to-use business systems that complicate processes and hamper operations, and such [inefficiencies] can cause a reduction in revenue,” says Candito. “Yet many companies continue to ‘make do’ with their current applications and systems even though these solutions may not be right for them. Rather than continuing to use antiquated business process solutions, consider a single system of record to achieve transparency, streamline communications and manage performance.”

After a year-end review and before the start of a new year can be an ideal time to streamline everyday processes, agrees Jesse Wood, CEO of eFileCabinet, a document management software vendor.

“Businesses are creating more data and information than ever, and the trend will only intensify in 2017,” Wood says. “Although unprecedented data acquisition and creation is good, it incurs significant operating expenses when businesses attempt to leverage information through traditional, paper-dependent methods. Going paperless and relying on document management technologies to facilitate collaboration and data storage can help.”

Ask, “Am I Having Fun Yet?”

Although this may not occur to you as you work hard to ensure that the year ahead is a profitable one, it helps to remember why you went into business for yourself in the first place, encourages Keeme.

“Review how much time you actually took off this past year,” he says. “Many business owners start their own companies for the freedom and independence it gives them. If you’re working harder, longer and more often and not enjoying time off with friends and family and doing things you enjoy, the year end gives you an opportunity to evaluate why you’re doing what you’re doing and how you can meet your personal goals in the coming year.”