2024 is disappearing faster than a watermelon at a Gallagher concert and it’s already time to plan for 2025. Deep breath first. Let’s make a list. What’s important to review as you wind down 2024 and steel yourself for 2025? The S&P Capital Partners team created a year-end review checklist for business owners as they guide their operations into the new year and the next phase of development. If any of your business owner clients need to answer any one of these questions as 2024 sunsets into 2025, we’re open to have a conversation. The S&P Capital Partners team can help your clients maximize their business value and provide carefully developed and respected guidance as they continue to grow and build valuable business assets.
Review 2024’s performance to the actual budget: prepare a forecast for 2025 with a 2024 review. If an actual budget or forecast has not been a part of the business owner’s formal planning each year, they should strongly consider adding this on top of just their standard tax planning with their tax advisors.
Revisit and revamp marketing and strategic plans: How long has it been since the business owner refreshed or realigned their marketing process? Are they missing potential client connections? Are they adapting to industry changes? Are they successfully identifying new market opportunities? Who hasn’t heard the company message? Can they identify trends and market shifts that could grow the business, protect each customer, and outperform the competition?
What’s the short- and long-term strategic plan? If a business owner started with a business plan, and in a lot of cases, that’s a big if, many have long since abandoned the original concept as the daily operational gride took valuable time away from business development. The end of year is the ideal opportunity for business development strategy review to identify and define achievable goals for the coming year.
Team Planning and Performance Reviews – Training, key management performance reviews, and strategic plan discussions are ideal for year-end wrap up. This is a great time to get input from the management team and staff who work every day in the trenches.
Technology, Software, CAPEX – Review all company CAPEX needs to identify deficiencies and appropriate funds for tool upgrades, software updates, CRM’s, etc. for continued growth and company sustainability.
Clear Directional Communication – identify 2024’s successes and failures. What did the team do well and where did they bomb. Many companies lack clear communication and direction when establishing directives and clear lines for team collaboration. Businesses must know:
- Where are we?
- Where are we headed?
- What will we look like in 3-5 years?
Formulate 2025 budget: How does the 2025 budget align with the business owners strategic plan and growth strategy? Have they reviewed upcoming CAPEX needs for both the current year and beyond? What is the hiring strategy for the upcoming year? Are they adding new positions to achieve staffing goals? What are they doing to analyze and project revenue into 2025? Are they considering the most vital data points? Are they realistic? Are they factoring in contingency funds for unexpected work stoppages? In addition, and vitally important, reconcile all supporting ledgers on the balance sheet so that 2024 ends and 2025 starts settled and balanced.
Foster relationships with key business partners: How are they planning to interact with key customers and vendors who’ve contributed to the business’s success? Customer retention and brand loyalty are important components for long-term company stability and operational continuity. How does business development figure into the new year’s budget to retain the company’s client base and add key clients? Potential clients have budgets too. Determine targets before year-end 2024 to make sure their business fits into their 2025 budget. Are there strategic relationships that require significant time investments before the new year? Is there a way to build brand loyalty through end-of-year communications?
Establish year end goals for the upcoming year based on strategic plan: What are the strategic goals for the current year, where are they documented, how will business owners measure achievement throughout 2025? What should businesses measure and regularly monitor? Do they have a review plan for periodical assessment in 2025? Who needs to be involved in that process? Are the goals realistic and impactful? Do they align with the business mission and core values? What risks limit current goals? Is there a plan to mitigate those risks?
Evaluate the people strategy for the coming year: Will the company invest in the org chart in 2025? Have they incorporated employee development in the people strategy? Is the org chart current and does it identify areas of need? Is there a specific plan for identifying individual goals and expectations? How do they help employees align with the 2025 business objectives? How will the management team monitor and measure progress while keeping a pulse on team engagement this coming year?
Self-reflect on the individual’s performance as a business owner and leader: There is more to business owner performance than income and cash flow. How has the owner reflected on leadership this year? What were the leadership goals in 2024? How successful were they? Any lessons learned from accidents or unplanned events? Where are personal development opportunities in 2025? How do they plan to implement changes for personal growth and development for the coming year? Have they engaged their management team for leadership feedback? How will they employ that feedback to improve as a leader?
Year-end tax planning and strategy: Have they spoken with their tax preparer or CPA, to maximize tax benefits, minimize your tax obligations, and fully fund their retirement accounts? What is their tax plan for 2025? Did the company overpay or is it incurring underpayment penalties? What process changes will align estimated payments to future results to avoid unnecessary penalties and interest? Will they meet with their CPA regularly and adjust their tax strategy for the coming year? They should and we encourage business owners to meet regularly with their advisory counsel.
Succession & Exit Planning Strategies: Regardless of tenure as a business owner, it’s never too early to engage in succession & exit planning discussions with professionals like the team at S&P Capital. Do they expect to pass their business on to a new generation of family members? Do they believe they’ll sell to an outside buyer? Do they want to significantly boost the growth of their company through outside investment? If business owners ever give any thought to retirement planning, they should speak with professional deal makers early and often.
Contingency planning: An unexpected tragedy. Nothing anyone ever wants to think about. In the business plan, has the owner considered contingency plans should something happen to them? What if they’re not able to perform their current duties within the organization? Is there a team member who can immediately step into the owner’s shoes? Have they made long term family investment plans if you’re unable to continue? NASA has contingency plans for contingency plans. You should too. It’s an essential part of succession planning for uninterrupted business continuity in case of an emergency or unavoidable disaster.
S&P Capital Partners offer investment banking services to privately held businesses and business owners. We deliver efficient, trustworthy, and expert M&A services to businesses in the lower middle market ranging from $5m – $150m in enterprise value. With nearly 40 years of deep learned, real world deal experience, the investment banking professionals at S&P Capital Partners successfully bridge the gap between main street SBA business brokerage companies with limited access to M&A and non-government underwritten capital markets, and the institutional investment banking firms who acquire businesses in the upper middle market.
S&P Capital Partners is an independent & boutique business advisory firm. Creating profitable exits for our clients is our priority.
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