Tips from the Trenches: Mid-Year Business Check Up
By Yacanex Posadas
Businesses tend to get, well busier, in the summer. The weather warms and revenues rise. Business owners too, get busier, and often have children at home to care for as well. They scramble to keep up and make the most of this annual boost to their business. But when fall rolls around, many can find themselves three months behind and in a panic to meet year-end goals and obligations. In this edition of Tips from the Trenches, we pose five questions to help you get your business back on track.
Are You Keeping up with Bookkeeping? (Especially Your Receipts!)
Most small business owners do their own bookkeeping. While this is very manageable during slower times, summer brings about a faster pace, with more customers, more expenses and more receipts. It’s easy to shove paperwork into the nearest nook or cranny to get it out of your way...and even easier to forget to record it into your books later!
Taking a weekly inventory of receipts is one of the best ways to stay on top of bookkeeping. Create a “receipt box” or designate a drawer, cupboard or shelf to collect and store your receipts so that you always know where to put them, and where to find them. Make a point of selecting a specific day of the week to collect and input your receipts. Each week on that day gather all the receipts - from pockets, purses, shopping bags, etc. - and enter them into your records. While you should always save your receipts, you can also take photos of them as a backup or to remind yourself of the expenses.
If you need a bookkeeping refresher, visit MOBI’s online Accounting and Cash Flow session in the "Starting a Business" course. This session tells you how to prepare financial statements. You can also use a software program like QuickBooks or FreshBooks to record your expenses and run reports. Some of these programs will even allow you to upload photos of receipts.
Are Your Operations on Track to Meet Your Goals?
At the beginning of the year, businesses tend to have very good discipline in sticking with their objectives. As operations march steadily and smoothly on, business owners may feel they are in good shape and can shed a little discipline. As a result, their focus may veer away from long-term goals.
For example, a business owner might set a goal to manage expenses more tightly in the coming year, perhaps controlling payroll or Cost of Goods Sold (COGS) within a certain range. However, to keep pace with increased business he or she might make decisions that go slightly off course. This may not seem like a big deal, but compounded over several months or several decisions, it could have more significant consequences by the end of the year.
Taking out your business plan and comparing it with your current business operations is an important mid-year activity. Ask yourself a few key questions. Do your goals still make sense? Are they still important? Do you need to adjust your strategies to meet your goals? Are you on track? If you don’t have a business plan already, now is the time! MOBI’s Starting a Business course provides step-by-step instructions for writing a complete business plan. Sessions 2-15 each cover a section of the plan and provide downloadable templates.
How Are Your Products Selling?
It’s easy to get into the routine of preparing and selling products, but it’s important to take a step back and evaluate what customers are actually buying. Were soups top sellers in winter months, while fish tacos dominate your menu in the summer? Do people more frequently buy energy bars or cookies? Are you able to sell your juices before they pass their expiration dates?
Your Point of Sale (POS) system, such as your Square credit card processor, should be able to organize your sales data to provide information about what’s selling and what is not. Kids home for the summer can also help tally products from order tickets if you have a manual system. Look for patterns that reflect customer preferences. Tailor your product offering to best fit your customers’ buying patterns. If there is something that’s not selling, take it off the menu. You can cancel recurring supply orders for that item and save some money.
Are You Using Your Service Plans and Subscriptions?
Nearly all business owners use a cell phone as their primary mode of communication for the business. This is a good time to look at your plan to investigate how you are using the service. For example, are you paying for data that you are not using? Could you switch to a less expensive plan or different carrier and meet your business needs while cutting costs?
Likewise, many businesses pay subscription fees for a variety of products like Microsoft Office, Adobe Photoshop and more. Are you using the products you’re paying for? Service providers offer bundled packages for Internet, voice and data. If you subscribe to services individually, are there less expensive bundled options? Businesses with a website may also be paying for hosting, email, domain and shopping cart services. Are there options to downgrade your services to meet actual traffic demands?
This is a great time to take a closer look at all these subscriptions and assess whether you’re using them enough to justify the costs. Canceling or scaling back would cut costs for the rest of the year.
Do You Need New Equipment?
While we’re talking about cutting costs, it’s important to note summer is a great time for bargains. Suppliers looking to boost third quarter sales and move inventory often offer great deals in the summer. There may be product discounts, free shipping or bundled package offerings. Back-to-school sales will also begin in early August and could deliver some great pricing options.
If you need a new printer or perhaps finally have the budget to buy the iPad you need, this may be the time. You should especially investigate hardware/software packages. For example, if you sign up with a carrier for service and buy a new device for that service contract, is there a discounted price? Start looking and compare prices and sales for what you need.
Summing Up the the Summer Check Up
The warmer days of summer can bring a bounty of opportunity for business owners, but busier times can often leave key details overlooked. Take advantage of this midpoint in the year to check up on your business.
- Save receipts in one spot and make sure you’re collecting and recording them on a weekly basis.
- Revisit the goals and objectives you set for the year to see whether you are on course, or need to get back on track.
- Run a POS report to see if the products are really performing the way you think they are.
- Review your service contracts and subscriptions to scale back or cancel any that aren’t being used.
- Lastly, take stock of any equipment or supply needs and hunt for summer and back-to-school promotions.
Using these Tips from the Trenches, you and your business will be well-positioned to keep operations strong throughout the year and meet your annual goals!
Yacanex Posadas is the founder of Yacanex: Economic Development. Community. Juntos., a business providing education, professional training, mentorship and career exploration. Yacanex also teaches through the Santa Clara University Neighborhood Prosperity Initiative (NPI) program and provides strategic consultation for MOBI. For more information please visit: https://yacanex.com/
Santa Clara University’s My Own Business Institute (MOBI) provides free online business courses. Through the “Starting a Business” and “Business Expansion” programs, MOBI teaches aspiring entrepreneurs around the world the fundamentals of business ownership with actionable instruction, templates and resources. Those completing the courses earn a Certificate of Completion as well as a Digital Badge which can be used to demonstrate their achievement. Learn more about MOBI at https://www.scu.edu/mobi/.