Note: This post has been updated to reflect information for 2019.
Well, here we are – already about halfway through the year. Yeah, we don’t know where the last six months disappeared to either.
Regardless of how quickly this year is flying by, it’s now the right time to evaluate how your business is performing so far. Are you on track to meet your goals for the year? And even if you think you are — are you really sure?
When it comes to doing a mid-year evaluation of your business, a good place to start is by answering these five questions.
5 Questions to Ask For Your Mid-Year Business Evaluation
1. Have you made your estimated tax payments so far?
As of June 15, 2019, you should have made two estimated tax payments to the IRS.
For 2019, the first payment was due by April 15, and the second by June 15. With two more estimated tax payments to go (September 17 and January 15, 2020), you’ll want to be sure your estimated payment amounts are in line with your net revenue.
If you overpay, you’re basically giving Uncle Sam an interest-free loan — which he’ll surely appreciate, but you won’t see that money again until you file your taxes for the year. If you underpay, you’ll face a tax penalty. And you know who likes paying more in taxes? Nobody, that’s who.
2. Are you minimizing risk for your business?
Have you identified all of the potential risks to your business this year? More importantly, do you have a plan in place to minimize these risks? Keep in mind the risks your business currently faces might have changed since the start of the year.
Avoiding risk comes down to having the right information, so be sure you’re getting the information you need to make the right decisions for the future of your business throughout the rest of the year.
3. Is your business operating efficiently?
When you’re running a business, it’s easy to get caught up with, you know, running a business. But you could very well be throwing money down a black hole without even realizing it, which could affect your ability to achieve this year’s goals.
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Increase your chances for a successful year by evaluating your company’s current operations and looking for any efficiency gaps. For instance, are you able to eliminate a step or two from a multi-step process? Or, are any of your employees spending too much time on one task that could be automated or outsourced? An efficient business has a greater chance of long-term profitability and success.
4. Are your finances in order?
We can’t say this enough — be sure you’re keeping clear, well-organized financial records. Maybe you’ve fallen behind on your books over the last six months (it happens to the best of us), but that doesn’t mean you should just say, ‘Screw it, I’ll deal with it at tax time.’
If you don’t have time to get caught up now or if managing your finances just isn’t your thing, outsource this task to an expert. You’ll thank yourself — accurate financials will give you valuable business insights throughout the year and make your life a whole lot easier at tax time.
5. Are your financial projections realistic?
Take a look at your financial records over the last six months. (This is where your accurate, up-to-date records come into play.) Is your business in line with the financial projections you made for the year? This is a good time to carefully review your business’s income and expenses, and make any necessary adjustments to the budget if you’re falling above or below your goals.
The bottom line
The success of your business will depend on whether you’re getting the information you need, and how you use that information when making future plans. A lot of businesses get into major trouble by not having a clear understanding of where things stand from a financial and operational perspective. Doing a mid-year evaluation will increase the likelihood that your business isn’t one of them.
Let the experts help
We work with businesses of all sizes to help them manage their finances, streamline their business operations, and plan strategically for the future. Interested in getting some help with cleaning up your books or ensuring your business is on the right track to meet its financial goals this year? Get in touch for a no-obligation consultation today!
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