Another year is winding down, but there’s still a lot of work to do. Your 4th quarter planning will set the pace for the year ahead. We’re going to share steps that we recommend all businesses follow to end the year off on the right foot.
You’ll also have a stronger first quarter thanks to the steps that you take today.
Here’s what we recommend:
4th Quarter Planning in 4 Steps
1. Review Your Business Data and Take Action Your first step in 4th quarter planning is to review how the first three quarters of the year have played out. Dig deep into the data to identify:
- Market shifts
- Global economics impacting the business
- Wins for the year
- Losses for the year
Where do you stand on your yearly goals? If you’re going to miss your forecasts for the year, sit down with your team leaders to find out why. Your leaders have a pulse on the inner workings of your company and can help identify:
- Areas that you can address to reach your goals
- Resources necessary to end the year strong
Once you identify these weak points, you can address them and then focus on your next steps.
What to Do If You’re Exceeding or Surpassing Targets
Being ahead doesn’t mean cruising by for the rest of the year. You want to finish the year even stronger by setting new challenges. Imagine you’re an MLB team with 80 wins, 30 games remaining and a goal of 90 wins on the season.
Do you say, “All we have to do is win one in every three games to hit our goal?”
No, you:
- Celebrate your success
- Set the bar to 100 wins or being the #1 team
You want to push your team without being demoralizing, which requires balance. Acknowledge the hard work and effort it took to reach your goals. Celebrate these wins, and finish the year strong.
What to Do If Your Business is On Pace
Motivate your team to continue on pace, but celebrate the wins that you’ve also had up until this point. Lack of appreciation is why 79% of employees leave their jobs. Your business relies on your team to hit its goals, so let them know when they’re doing a good job.
What to Do If Your Business is Behind
Sometimes, businesses miss their goals. Use this as a time to reevaluate and reflect on what’s happening and why it’s happening. Outside factors that you have no control over may be to blame, but you need to reset and think:
- How close to your goal can you realistically get?
- How far do you think you can get if you started today?
- If outside factors are significantly affecting you, how can you optimally adjust to address them?
Corrective action can push you a lot closer to your goal than you are right now, even in the 4th quarter of the year.
2. Identify Areas of Your Business That Need a Change
Change is the evolution of business and allows you to grow for years to come. You’re an innovator, and you need to identify areas of change when you’re:
- Surpassing your goals
- Just hitting your goals
- Missing your goals
For example, if you’re doing well, you might be reaching capacity, which is a growth killer. Small changes to your processes and personnel may be necessary to reach your goals or continue growing at the fast pace you are moving.
Ask yourself, “What is the one thing I can do this quarter that will have the biggest impact?”
Here are a few ideas that can help kickstart things a little:
- Review operations, processes, and personnel: Bottlenecks are always quick wins if you can eliminate them. You may have bottlenecks in your operations, processes or personnel. Review all three of these areas to find areas that are holding you back.
- Follow-up with leads: A simple follow-up can convert a would-be client to one that signs on the dotted line. Review your pipeline, follow up with leads, and you’ll find many are receptive the second or third time around.
- Follow-up on receivables: Invoices being paid late? It happens. Over 55% of invoices are late, so follow up with clients who don’t pay on time. Create a collection plan and consider assessing late fees.
Focus on areas of change with the biggest upfront impact and work your way down the list before moving on to the third step.
3. Engage in Business and Tax Planning
Tax planning is something every business needs to consider throughout the year, especially in fourth-quarter planning. Business and tax planning go hand-in-hand, so:
- Look at your tax projections for the year.
- Are the tax projections relevant?
- Do you need to update the projections?
You still have time to minimize a larger tax bill in the 4th quarter by making equipment purchases earlier than expected or paying bills in advance (if you operate on a cash basis).
If you have ratios that you need to hit with the bank, you must plan for the rest of the year to ensure you hit them.
4. Plan for the Upcoming Year
You can accomplish a lot in the 4th quarter of the year, but it’s also time to plan for the year ahead. Use this time to create a list of Q1 tasks that you want to complete. A few options are:
- Set SMART goals for the year ahead. Break each goal into manageable chunks or milestones that help you and your team stay on track.
- Review your Key Performance Indicators (KPIs) and change them if necessary. Defining your KPIs in the fourth quarter allows you to hit the ground running to start the year. If you find that you’re missing your KPIs to end the year, determine what needs to change.
You also want to look at your budget. Consider your:
- Base budget
- Target budget
- Best-case scenario
- Worst-case scenario
A base budget is what you need to keep the doors open and programs running. Target budgets are what you need to hit your goals, such as expanding your staff and outreach, while your best-case scenario allows expansion, new program launches and investments. Worst-case scenario is geared to planning for a major drop in sales, such as if a recession hit.
Planning for each budget allows you to know what actions to take throughout the year based on how your finances grow.
Wrapping Up
Before you know it, you’ll be in 2026. Wrap up any loose ends that you have in the 4th quarter, finish the year strong, and use the tips above to set yourself up for success for the year ahead.
Schedule an appointment to learn how we can help your business grow.