“Year in Review” 35-Point Checklist

One of the smartest ways to start your next year planning, so that you are able to hit your target is begin by reviewing your previous year in depth.  Here is a checklist for your “year in review” of your business.  Perform these analysis items and you will have deep  insight into what is working and not working your business, and set the groundwork for laser pointed goal achievement in the new year.  There are plenty of other analysis practices that we could also apply, but this is a very good start.  Set aside time without interruption, and Launch the new year right!

REVENUE

Year’s Revenue – Did you achieve your revenue targets for the year?

Quarterly Revenue – Did you achieve your revenue targets for each quarter?

Monthly Revenue Last Year Comparison – Compare each month of the year with the same month of the last year, does each month maintain similar growth each month, or was there a change in the trend? For months where the growth was not achieved try to identify the reason why. Lack of staff?  Unskilled sales people did not close sales?  Loss of recurring clients due to quality?

Targeted Area Revenue – Has revenue increased in your targeted areas or types of service? Are there any areas of revenue flattening or even decline?  If so, determine if that part of your business should be dropped.

Driven Revenue Growth – Were your revenue increases a direct result of your marketing efforts?

Ideal Revenue Customer – Who are your best revenue customers? Run a report of Sales by Customer in Ascending order to see who are your biggest revenue customers.  Create a profile of your top five customers with the best revenue:  (1) Demographics (age, location, occupation, income, service type), (2) Lifestyle and challenges of your ideal client (no personal time, entertainment, pets, food and wine enthusiasts, etc.), (3) Where do your ideal clients get their information?  (what do they read, where do they spend their time).  Information on your Best Revenue Customers will help you make your marketing efforts efficient.

Number of Recurring Customers vs. Last year – Get an accurate count of the number of recurring customers this year vs. the number at the end of last year. How many did you net gain?  If you net gained very few, but your revenues were higher then that means you are not achieving substantial growth, and your increases are often explained because of price increases or larger revenues per sale.

Client Attrition Rate – Count up the number of recurring customers who cancelled this last year, and divide it by the total number of recurring clients you have at the end of the year and you will get the year’s Client Attrition Rate. Do the same thing for last year, and compare the two year’s client attrition rates.

PROFITABILITY

Year’s Net Profit – Did your net profit for the year meet your goal?

Year’s Gross Profit – Did your gross profit margin meet your goal for the year?

Quarterly Profit – Looking at each quarter of the year did your gross and net profit meet their goals?  If not, determine which quarter and even which month, you did not meet the goals.

Net Profit Problem – Were there any time periods that you met your gross profit margin, but not your net profit margin? If so, you likely need to review your overhead costs and set budgets for next year.

Gross Profit Problem – Were there any time periods where you did not meet your gross profit margin? If so, then you will need to review your pricing model and/or labor costs.  This category takes careful analysis, because impulsive adjustments can cause more harm than good.

BUDGET & COST CONTROL

Budget – Did you have a budget for the previous year?

Track Spending Vs. Budget – Did you regularly track spending vs. budgets this last year?  When making cost cutting measures, did you cut and maintain the right costs? For example, it can be very short sided to cut advertising while trying to grow revenue, because you make a short term gains of savings, but forfeit the ability to achieve real growth in the future.

Cost Adjustments – After reviewing the previous year’s spending you may find items that met the budgeted, but possibly your agreements can be renegotiated now because of changes in the market place. Maybe you can get a better deal on your cell phone contract, internet service, merchant services, insurance or others.

Employee Turnover Rate vs. Last Year (ETR)- Take the number of employees who have departed the company this last year and divide it by the number of employees/positions you have at the end of the year. This will give you the ETR for this year.  Then repeat the process for the previous year, and compare the two.

Labor Cost: Budgeted Hours vs. Actual Hours – If your software compares budgeted labor hours vs. actual labor hours then run the report for the entire year and analyze how and where you are hitting and missing the mark.  If your software does not do that, then take one sample pay period and look at budget vs. actual labor hours for every single client and every single day.

Training Cost Per Employee (TCPE)– Add up all of your costs to train your new employees for the entire year and divide it by the number of trainees that you hired to get the Training Cost Per Employee. If you want you can categorize your trainees and calculate multiple metrics like TCPE for employees that separated within 3 days of employment, within 7 days, within 14 days, within 30 days, etc.

Customer Acquisition Cost (CAC)– Take your total marketing costs for the year (or separate your marketing costs by marketing vehicle) and divide the total by the number of clients you received from that marketing vehicle to get the Customer Acquisition Cost for that marketing vehicle.  You can break the numbers up further if you choose but calculating the CAC for recurring clients and for one-times.

CASH MANAGEMENT

Cashflow -At the end of each month this last year has your cash balance been at an acceptable level?

Company Saving – Has your savings balance decreased or increased since the beginning of the year?

Debt Total – Has your total debt decreased or increased since the beginning of the year?

Payroll Taxes – When payroll taxes have been due this last year have you been able to easily make the deposits?

Owner Salary – Have you paid yourself an even, adequate salary, and been able to cash you checks regularly?

Accounts Payable – Are your Accounts Payable (money you owe others) up to date, or do you have any or many that are over 30 days past due?

Accounts Receivable – Is your Accounts Receivable (money people owe you) very limited and less than this time last year? How about how many people are over 30 days, 60 days and 90 days over due?

Uncollectable Accounts – Do you have any uncollectable accounts receivable that are considered lost at this point?

OWNER’S BENEFIT

The final category for your review, and possibly the most important is to take an audit of the owner’s benefits you are getting from your business.  All of the long hours, investment and missed opportunities of business ownership are only worth it if you are gaining substantial perks over working for a company.  Do you work less?  Are your hours more flexible?  Are you building substantial wealth?  Do you get excited about your work?  Is your stress level reasonable, or have you given up your peace of mind for this business?

Owner’s Working Hours – Do the number of hours that you work match your goals? Do you tend to work a lot of weekends and evenings?  On a scale of 1 to 10, ten being the highest, how would you rank your working hours?

Owner’s Vacation – This last year did you take an adequate number of vacations? Were your vacations worry free, and untangled?  On a scale of 1 to 10, ten being the highest, how satisfied are you with the vacations you took this year?

Owner Schedule Flexibility Score – This last year how flexible were your working hours? Were you able to attend school functions, family obligations and personal business situations adequately?  On a scale of 1 to 10, ten being the highest, how satisfied are you with your schedule flexibility this year?

Owner’s Wealth – Are you building financial security and personal wealth for yourself through the business?  Are you better now than you were an hour ago?  On a scale of 1 to 10, ten being the highest, how would you rank your satisfaction with your wealth building from the business?

Owner’s Stress Score – How’s your stress? Do you sleep easy or are you stressed with repeat, difficult or seemingly unfixable problems?  On a scale of 1 to 10, ten being the highest, how would you rank your stress level in the job as business owner?

Job Satisfaction Score – On a scale of 1 to 10, ten being the highest, how would you rate your job satisfaction? People most satisfied with their jobs report several elements:   The job is the first thing they think of in the morning, and they are anxious to get to go to work.  They never think about doing anything else, they feel very satisfied when accomplishments are made, they love their customers and the people they work with, and other people are jealous of how much they love their job.   To score a 10 you should meet all of these elements, and if not, score yourself accordingly.  If you do this ranking every year, you can compare your feelings.