One might think this is a reference to upcoming festivities, a view appropriate for this time of year. However, this article is using the reference a little differently. Tis the season to review 2023 business performance and prepare for the upcoming year with the changes that are in store for you and your business!
Let’s start with changes that are upcoming for the New Year……….
In 2024, a new requirement will be in effect for America’s business community. The U.S. Department of the Treasury Financial Crimes Enforcement Network (FinCEN) has been tasked by Congress to record ‘Beneficial Business Ownership’ for affected business entities in the United States. This is an important matter to respond to after the start of the 2024 calendar year for most of the businesses in the Country. Failure to do so in 2024 could result in a substantial fine for your business. The link to the FinCEN website with a detailed explanation for what is involved is found at the foot of this article.
……… and move on to looking at business performance.
By now, you should have a good idea of your business’s performance for 2023. You should be able to forecast the end-of-year gross revenues expected, along with the percentages for major expenditure areas and know if you are doing well or having a reduction in margins for the year. You should have a great idea of your cash flow, receivables, financial obligations and what your medium-term prospects are for business success.
Culturally, you should know what the top three pain points are for your operation, whether it be HR issues, operations, logistics, supply chain woes, or whatever else is top of mind for you.
You should know, not just feel, whether you are spending too much time working inside your business rather than leading it with a visionary approach to positioning your business for future success.
This is the time of year to perform an annual check-up of your business, set goals for 2024, and for taking the time to understand your weaknesses and plan programs to strengthen those areas that need improvement.
I highly recommend you look at the SOU SBDC Small Business Management Program for 2024 – 2025 as a way to build competencies in your company’s ownership team.
Now, a few questions for you to see if you are doing what you should regarding building your company’s value and resiliency.
- Are your company’s employee manuals up-to-date and have all your employees signed a statement that they have received the document and will follow the established processes and procedures?
- Is your company compliant with regulations and the recent legislation regarding the Corporate Activity Tax, Oregon Saves, BOLI regulations, PERS, I-9’s, Statewide Transit Tax, FUTA, SUTA, Workers’ Comp, Oregon Child Support Program, posting of notices, ADA, OSHA rules and regs, UI, and the Office of Small Business Assistance?
- Are your licenses and registration current?
- Have you implemented the systems you need to obtain consistent quality and quantity of results at a reasonable cost for your workforce?
- Have you started a planning effort to identify areas for improving your performance to receive maximum value for your business when it is time to sell?
- Are you, as a single owner/operator, looking at your business as if you have departments that are growing, and looking at whom might be a good fit to add to your team to extend your business’s capabilities?
- Have you invested in your workforce to maintain a culture of success and continuity and management to continue operations when you sell?
- Do you know what your inventory turns are and what the range is for your industry?
- Have you talked with your mentor lately?
- What internal documents do you use to make strategic decisions with?
- Are you benchmarking your cash reserves so that they grow alongside your business growth?
Now, Season’s Greetings! …. (In the best of Holiday meanings!)
To access information from FinCEN:
Marshall Doak is the Director of the Southern Oregon University Small Business Development Center and a huge supporter of innovation and the community that forms around innovation in the economy. In private practice, he works with businesses that plan to transition to new ownership within the next five years, assisting them to build value that can be converted to retirement income when the business sells. He can be reached through: email@example.com or 541-646-4126.