Time flies. It may seem like you were beginning with your budget and plans for the year only yesterday, but we’re now heading into the year’s final quarter. A lot of work needs to be done to reach your goals before the end of the year.
And a good way to make sure you set your business up for success is to prepare for Q4.
What steps should you take?
Prepare for Q4 in 4 Steps
1. Review Your Business to Date
A lot happens in the first three quarters of the year, and many things are out of your control. For example, it’s possible you couldn’t do much to prepare for major market shifts that no one in your industry had on their radar, nor could you have done anything about global economics.
So where do you begin?
Review your business to date to understand where you stand on your yearly goals. If you’re on track to reach your goals or exceed them, then it’s time to:
- Determine how you can celebrate these wins as a team. You may want to have a company dinner or even go out to a baseball game together. Sit down with your HR and accounting team to better understand what options fit into your budget.
- Analyze what your team has done right this year and how they can continue on the road to success. Double down on what’s going right so that you can end the year off strong.
If you’re going to miss your forecasts and projections, you’ll need to consider why. A thorough review of the first nine months of the year is warranted, and if you pinpoint what’s holding you back from reaching your goals, there may still be time to change course.
Sit down with your team leaders, managers and key stakeholders to:
- Discuss what you can do to help them reach their goals
- Learn what resources are necessary to make Q4 better than Q1 – Q3
Your managers and team leaders have a pulse on what’s happening internally in the company that is challenging for owners, even if they’re hands-on.
You may find that you lack the human resources to fulfill more demand, and in this case, your accounting team will be invaluable in helping you determine whether you can afford to hire new workers.
If you identify areas in the organization that need to change, it will allow you to implement strategies to reach your goals.
2. Identify Areas That Need to Change
Now that you’ve reviewed your business, you can start making adjustments in areas that could use improvement.
Every business is unique, but here are some ideas on how you can improve common areas of inefficiencies.
- Follow-up on receivables: Do you have any clients who are behind on paying their invoices? Follow-up and make sure that you put measures in place to get them to pay, such as a late fee.
- Follow-up with leads: It’s easy for leads to slip through the cracks. Review your pipeline and make it a point to follow-up with any leads who asked you to check in at a later date.
- Review inventory: How is your inventory management? Do you have excess inventory that you can sell off?
- Review operations, processes and personnel: Look for bottlenecks and identify areas of improvement to boost efficiency. Consider your team, too. How can you support team members who are struggling with efficiency? Improving your operations, processes and personnel will have a big impact on your business’s performance going forward into the new year.
Not sure where to start? It’s easy to feel overwhelmed by all of the things you could do. Instead, ask yourself:
- What is the one thing I can do this quarter that will have the biggest impact?
If you focus on how to make the biggest impact, it will provide the best “return on investment” for the quarter. You should also be focusing on tax planning to prepare for Q4.
3. Engage in Tax Planning
Businesses should be engaging in tax planning to some degree and throughout the year. The fourth quarter is no exception.
Take a look at your 2024 tax projections. Are they correct? If not, it may be time to run the numbers again.
What about the size of your tax bill? If you’re expecting a big bill, look for ways you can minimize it before the year closes out.
For example:
- If you’re operating on a cash basis, do you need to pay bills in advance?
- Can we expedite our plans to buy equipment and do it now instead of next year?
Simple strategies such as these can help reduce your tax bill, leaving more money in your business’s bank account.
4. Plan for the Next Year
Q4 is a great time to not only plan for what you want to accomplish in this quarter but also for the next year.
The earlier you can start planning and setting goals, the better. Doing so will give you a clear direction as you wrap up the quarter and start planning for Q1 tasks.
Here are a few things you can focus on:
- Setting goals for the next year. Make sure these are SMART goals that are broken down into smaller, manageable chunks.
- Reviewing your KPIs. Key Performance Indicators (KPIs) help you determine whether your business is on track to reaching its goals and remaining profitable. Depending on your objectives for next year, your KPIs may need to change. Clearly define them now, so you’re ready for Q1.
- Take another look at your budget. Make adjustments based on the past year’s performance.
When 2025 arrives – it will be here before you know it – you’ll be ready to hit the ground running.
In Summary
As we gear up for 2025, it’s important to tie up loose ends and make sure your team finishes the year strong. Use these tips to ensure your business is on the right track in Q4 and starts Q1 on the right foot.
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