5 Ways to Get Your Small Business House in Order

Spring is the season of renewal. From leaf to bud to vine, the signs of new life are everywhere. It’s a great time to clear out the remnants of winter to make way for the warmer months ahead. It is also the perfect time to take a fresh look at your business and make sure you have everything lined up for a profitable result.

Here are five ways to start your business spring cleaning:

1. Sweep

Spring is the perfect time to examine your mix of products and services. Are there cobwebs forming on your product inventory? Examine the items you are carrying in inventory to identify any slow moving or obsolete items and decide how to eliminate them. Is it time for a sale or donation? Deductible contributions of items held for sale are based on the original cost of the item. Be sure to consider the sales tax implications of making a donation.

If you are a service business, it’s time to take a fresh look at the services you offer. Consider offering a new angle, eliminating any unprofitable lines of business, or bringing in some new expertise. It might be time to broaden your offerings or conversely to refocus your efforts on just your most profitable services.

Whether you are selling goods or services, spring is a great time to review your sales trends for the last couple of years to identify any areas that might be ripe for change.

2. Dust

Remember that business plan you created when you first started out? Is it hiding in a filing cabinet covered with dust? This is a great time to take another look. Take some time to refine your plan for the next five years and then try to create cash flow forecasts and budgets. Build a detailed budget for the next year and a high ‐ level forecast for each of the next four years. Make a list of any equipment purchases or other large investments that you are expecting to make. If your accounting software supports budgeting, now is the time to make sure the budgets are loaded in sufficient detail to help you identify any corrections that might be needed in the coming months.

3. Polish

Spring is a great time to polish the skills of your team. Have they been held accountable for financial results? If so, do they understand the connection between their actions and financial outcomes? If not, you need to get some financial goals in place. In either case, now is the time to work with your team on basic financial fluency skills so they can help identify activities and measurements that will lead them toward your goals. You might want to have them read and discuss “Managing by the Numbers” by Chuck Kremer and Ron Rizzuto or “The Great Game of Business” by Jack Stack. Once the team has a base level of financial competency, participates in creating individual and team measures, and knows they will be held accountable for achieving results, they will start performing at a higher level.

4. Rearrange

Take a look at your chart of accounts and your financial reporting. Are you getting the details you need to manage your business? It might be time to change things up: create departmental reporting, separate your marketing expenses into different areas, or add more details to your financial statements. Examine your miscellaneous expense categories to see if they are being over ‐  used and make sure that all of your direct costs are being recorded in the right place. The more accurate information you have about individual costs, the easier it will be  to make good decisions.

5. Shine

Review your customer list. Which customers are most profitable? Are your unique skills especially valuable in one industry? Look for additional ways to outshine your competition in that industry.

Consider using customer surveys to gather data about the customer experience. Then work with your teams to walk through every customer touch point in search of areas to improve. If you have customer loyalty programs, make sure they are still relevant and effective. By improving every aspect of the customer experience, you will have planted seeds of success that will bear fruit for many years.

With the arrival of spring comes the promise of new opportunity. It is a time for new ideas and a fresh perspective. Once you finish your business spring cleaning, you will have renewed energy to take on any new challenges that lie ahead.