How to maximize your profits with this 8-step annual checklist

Annually assessing your company’s performance is an necessary step towards lasting success. Taking a step back to review funds, sales, inventory, processes and more provides worthwhile insights. It identifies what’s working, what’s price improving, and highlights areas for improvement.

This checklist will guide business owners through a thorough annual evaluation. Completing each section will show how your company performed financially and operationally last yr. It will even reveal opportunities to refine strategies and optimize workflows.

1. Review your funds

The first thing it’s best to do is simply collect all the key financial records and reports from the previous yr, similar to the profit and loss statement, money flow statements and balance sheets. Reviewing these financial reports offers you a clear picture of how much money your business has made, what your expenses are, and what your overall financial health is. Some things to check include:

• Are your revenues in line with your initial projections and goals? If not, what aspects contributed to the under or over budget?
• Which products or services bring the most profits? And which of them might need adjusting or trimming?
• Where are your biggest expenses? Are there areas where costs will be cut to improve profits?
• Do you have positive money flow? Sufficient operating capital for upcoming seasons or expenses?

Discussing the numbers rigorously with your accountant will show you how to understand how the company is performing financially and what changes could also be needed.

2. Check sales and marketing activities

This is a perfect time to review your sales and marketing strategies from the previous yr. Look at indicators similar to:

• Total number of shoppers acquired over the last yr
• Sales by month to see seasonal trends
• Popular or best-selling products
• Traffic sources for web sites or stores similar to social media, promoting, email marketing, etc.

Evaluate which channels attracted the most customers and revenue. And determine what caused the poor performance. Now you’ll be able to resolve where to allocate more of your marketing dollars next yr. You can even survey your customers to get their opinion.

3. Assess inventory levels

Checking inventory levels and sales patterns from the previous yr will show you how to avoid running out of stock on popular items or having a glut of slow sellers. Remember to:

• Keep an eye out for bestsellers which will require increased stock for next season
• Identify low turnover items that will be replaced or retired
• Adjust minimum and maximum inventory levels based on sales data

Proper inventory management will show you how to optimize money flow and reduce waste. The goal is to keep popular items in stock without being overloaded with dead stock.

4. Review supplier relationships

Look at your payment history, order achievement rates, on-time delivery and any issues with key suppliers over the last 12 months. For necessary suppliers, you would like to make sure that:

• Payment terms and prices are still competitive
• Delivery schedules meet your needs
• The quality of products or services is constant

Before moving forward, address any problematic supplier relationships. An autopsy may improve the partnership in the future.

5. Look at your operational flow and processes

Evaluate the effectiveness of day by day back-office operations and procedures over the past yr. Are there areas causing bottlenecks, delays or slowdowns that might be improved? To consider:

• Improved workflow between departments
• Trimming unnecessary steps or paperwork
• Updating technology or equipment to increase productivity
• Improved scheduling of recurring tasks

Identifying and solving operational problems now can translate into big savings in the type of increased staff productivity or lower costs in the future. Process optimization is necessary.

6. Analyze customer reviews

Now that you simply have a full yr of customer interactions and data to review, it’s a good idea to analyze feedback trends. Review social media reviews, email surveys, call notes and more to find:

• Universal praise that needs to be upheld
• Frequent complaints requiring resolution
• Suggestions for latest products or services

Listening to what customers liked and didn’t like helps make sure you’re meeting their needs. It also highlights things that need to be improved in terms of customer support. You will want pleased repeat customers!

7. Assess worker performance

For each worker, review their performance metrics, sales data if applicable, and manager and customer feedback over the last 12 months. Determine whether staff roles need to be adjusted, whether specific people need more coaching and training, or could potentially be made redundant. Looking at:

• Sales and productivity goals may or may not have been met
• Common mistakes or areas requiring improvement
• Customer service rating
• Presence, punctuality, professionalism

It ensures you have the right people and skills to support your development. Solving problems quickly helps you avoid problems in the future.

8. Evaluate the marketing strategy and goals

Reflect on the original marketing strategy goals for finance, growth areas, product development, operations, and marketing that were established for the first yr. Rate how you probably did on each goal. Were there specific goals:

• Achieved or exceeded with room for improvement
• Almost achieved, but failed
• He completely missed the mark

Use this assessment to update your multi-year marketing strategy with latest, ambitious but achievable goals. Changing your strategy and priorities based on the successes and shortcomings of the first yr will keep your business moving forward.

It’s price taking the time every yr to thoroughly evaluate your company. By recurrently self-assessing and adapting, you equip your business to proceed to improve your services and performance in the long run.