Wow, 2020. That was something, right? Let’s resolve to leave any failures, disappointments, and paused plans in our rear view, and only bring the lessons learned with us into the New Year.
If there is one thing I learned in 2020, it's that anything is possible. So in some ways, because every month since March 2020 brought something new and unexpected (i.e. the pandemic, economic crisis, global uprisings in response to white supremacy, the never ending election, new vaccines, etc.), I’m more prepared for the unexpected.
I don’t know about you, but I’m looking forward to 2021. Let’s get ready by doing the following.
TAKE STOCK
AKA - spend time working on your business.
It’s hard to move forward without a plan. If you own a business or are on the leadership team of a business, now is a good time to not only take stock of last year in general, but to also spend some time working on your business.
Working on the business generally means getting clear on the big picture, spotting problems, setting goals, and developing the strategy that will move the business forward.
Working in the business refers to the day-to-day operations and serving your clients. Many small business owners lean into working in the business because they have to in order to stay afloat.
But, at least once a year (preferably quarterly), every owner should take some time to assess the different parts of their business.
Here is a breakdown of how to take stock:
1. Consider the essential functions of your business.
Financial
Marketing & Sales
Customer Support/Delivery Of Services
Operations
Technology
Legal
Administrative
2. For each function, take a look at the systems you currently have in place.
Where can you improve?
Workflows - do you have these outlined? Are there any gaps? Where can you be more efficient?
Software Use – is it time to find the right software and stop handling certain tasks manually? Do you need to change software?
Do you need to upgrade, downgrade, or switch any tools?
3. Assemble your team.
If you’re just starting out and are not ready to hire employees, try outsourcing to freelancers or virtual assistants.
If you have the budget for a small team, scale it down to the departments you need the most from the list above. What are the 5 core processes of your business?
A great way to take stock of your business is to create a diagram or a flowchart, so you can see it from a high-level view or come back to it later for more adjustments as your business grows.
Time to Operate as a Real Business
If you have been in operation for over a year, and you are committed to growth, it’s time to operate like a real business. At a minimum, that means:
1. Establishing the legal structure. There’s no better time than at the top of the year to create your formal legal entity. It’s time to move from a sole proprietorship to an appropriate entity.
2. Utilize contracts. In 2021, minimize loose arrangements established via text messages or emails. Moving forward, make it a goal to have the right contracts in place for your clients and vendors.
Remember, at MC Law, we can help with business formation, contracts, trademark protection, and copyright registrations. Check out our Solutions page to get started.
Get Ready for Uncle Sam
1. Create a system.
You can maintain good records and make your tax season bearable by creating an organized system. Make the decision now to put that system in place.
2. Remember your tax deadlines.
Small businesses that classify as S- and C-corporations must file quarterly if they anticipate they will owe more than $500.00 per quarter. Solo proprietors must file quarterly if they anticipate they will owe more than $1000 per quarter.
Quarterly Deadlines:
Quarter 1: January 1 through March 31
Deadline: April 15
Quarter 2: April 1 through May 31
Deadline: June 15
Quarter 3: June 1 through August 31
Deadline: September 15
Quarter 4: September 1 through December 31
Deadline: January 15 of the following year
Annual Deadlines:
Here are the tax due dates based on type of business and status.
March 15, 2021:
Partnerships
S-corporations
April 15, 2021:
Sole proprietorships
C-corporations
3. Say No to DIY.
Consult with the experts! This year, if it’s in the budget, hire a bookkeeper. And I cannot emphasize enough the importance of engaging a CPA to first, understand your tax obligations, and second, to complete your tax returns.
Set SMART Personal Goals
You’ve probably heard SMART goals in the context of business, both as an employee and business owner. SMART goals increase your chance of achieving them and simply guide you to create goals that are:
Specific
Measurable
Attainable (or Achievable)
Relevant
Time-based
If SMART goals increase your chances of success, why not apply it to your personal development? I know if you found your way to this blog, you are a driven go-getter. But don’t forget your life.
What good is business success if your life is in shambles?! Prioritize your life, whether that means your health, getting rid of personal debt, personal relationships, or making time for fun.
Positive improvements in one area (personal), achieving a goal, or even when you start to see progress, are incredibly motivating and can influence improvements in other areas (i.e. your business).
Not convinced (but enjoy nerding out)? Check out this article from Positive Psychology.