It is imperative that every New Year, business owners are expected to sit down, take a stock of previous year and plan for the New Year; just to make sure that they’ll be able to keep their company afloat and on the right track for success.
To ensure that business your business have the necessary tools that aid financial and operational goals while making sure that your employees are happy with their working environment, the focus of WHERE To Print COVER STORY in this edition is offer you some tips (in relation to some critical stakeholders of your business) to help make your planning process run smoothly not only for you or your business but most importantly for ensure continuous patronage from your customers.
VENDORS’ PERFORMANCE
It should go without saying that every business owner should periodically review vendors and suppliers performance to make certain that they are getting competitive prices and delivering quality service. The beginning of the year may be the best time of year to review your suppliers’ performances. In many cases, suppliers may have just completed their budgets for the current fiscal year, and they are looking to pin down business and cut deals to ensure that they achieve their annual financial objectives. This is the right time to take advantage of the process.
With that in mind, owners should ask themselves the following questions:
- Are current vendors charging competitive rates?
- Are current vendors providing good service and adapting to the business’s changing needs?
- Are there any new vendors or suppliers who deserve a chance or from whom the business might obtain a better and cost-effective quote?
- Does it make sense to try out a new vendor, even if it means giving him or her a small order?
- Might trying out a new vendor provide the business with leverage over an existing vendor?
Business owners will need to answer these critical questions in order to know whether they are getting good deals. Getting the best deals enables the business to keep its costs low; which in turn improves company’s bottom line. Again, the first few months of the year are an opportune time to do this.
EQUIPMENT CHECK
Manufacturing companies and many service-related businesses depend on machinery, supplies and a variety of other equipment (from vehicles to assembly devices) to operate. However, many business owners are so caught up in the day-to-day activities that go along with running the business that they sometimes forget to do periodic equipment checks and make sure that they have what they need to grow the enterprise.
The first quarter is a good time to evaluate a company’s equipment needs and to determine whether any capital investments need to be made. This is because identifying business equipment needs early in the year can help the enterprise make its financial projections for the year. It can also help the business owner plan for future cash needs. The following are questions that all business owners should ask themselves regarding equipment needs:
- Does the business have the equipment necessary to succeed and profit over the long haul?
- If not, can the equipment last another year, and can the business sustain itself using the existing equipment?
- What will new equipment cost, and where can quotes for the equipment be obtained?
- Does the company have the cash at hand or have the ability to finance such purchases, or will the fund come from other sources or from future operational cash flow?
- Are there any expenses that could be cut in order to offset and help justify such expenditures?
- Will equipment suppliers give better discount for outright purchase, instalmental payment or on consumables or servicing?
EMPLOYEES & WELFARE
Staffing needs should also be considered. It’s good to recognize any deficiencies early on in the fiscal year so that appropriate adjustments can be made. Also, keep in mind that finding, hiring and training the “right person” can take a lot of time, so it’s a good idea to get the rolling as early as possible. Get their welfare sorted out especially in terms of associated allowances, housing and pension. Do not forget tax issues with relevant authorities.
Furthermore, it’s important to realize that many workers tend to ponder their own futures at the end of a year. They start thinking about whether they intend on sticking with the company or moving on. Get your finding early on from each staff so as not to be caught unaware.
INSURANCE
While the old adage says that the best defence is a good offense, sometimes the best offense is a good defence, and insurance coverage is a business necessity.
At the beginning of the year, new rates for health insurance, business liability insurance, automobile insurance and other insurance tend to come into effect and it’s a great time to go quote shopping. There are various option to choose from a variety of insurance companies.
All business owners should ask themselves the following questions regarding insurance:
- Is the company adequately covered in terms of liability and/or does it have adequate fire and health insurance?
- Are insurance companies running multi-policy deals or discounted rates at the beginning of the year?
- Are there any new insurance firm that might be able to provide a competitive quote?
- Has the company taken on any new assets or business interests that haven’t been accounted for and protected by existing policies?
RETIREMENT PLANS
Businesses looking to set up Simplified Employee Pension (SEP) or other retirement plans should do so as early as possible during the year. Setting up a plan early on can permit employees to take full advantage of their annual allowed pre-tax contributions.
Theoretically, the more time the money is growing on a tax-deferred basis, the larger the nest egg they may accumulate. Reviewing the plans, selecting an investment firm, and actually setting up a plan doesn’t happen overnight.
Questions business owners should ask when setting up retirement plans:
- What will the cost be to administer the plan?
- How many employees might benefit and want to take advantage of the plan?
- How much will the company need to contribute to the plan?
- Are there any advantages to setting up one type of plan over another based on costs, the firm’s size and employees’ retirement needs?
THE BOTTOM LINE
By definition, business owners should continually evaluate their businesses and make adjustments accordingly. However, from a number of perspectives – such as insurance, retirement planning, staffing, vendor and equipment needs – the early month of January in the New Year is a particularly opportune time to sit down and plan. Have you made your plan?
