1. Create attainable goals for the year
Take a bird’s eye financial view of your entire business. Identify goals that you feel confident you can achieve. The more specific, the better.
For example, many entrepreneurs would like to grow their business. But your job here is to put specifics and numbers around that goal to make it actionable and attainable.
Look at your business’s past performance and market potential to nail down concrete numbers. Think how you can measure your success — by percentage, number of sales or products, etc.
Consider potential changes to your workforce and external economic circumstances, such as inflation, recession or a growth period.
Your goals could look like “Gain 15 more clients by June” or “Increase the number of subscribers by 5%.”
Learn more about creating a small business plan.
2. Make a roadmap to scope out every goal
Goal setting is all about planning the outcome you want to achieve. A roadmap spells out the actions or practices to help get you there.
Break each goal into smaller tasks. Identify what tools, resources and help you need to complete each task. And create deadlines for every task.
For example, if you want to improve your current tax prep process, break this goal into small parts.
- Decide if you will file as a sole proprietor, LLC, or corporation. Each designation has different tax implications for your business.
- Research the tax dates and deadlines. Small businesses have dates and deadlines different from personal taxes.
- Hire tax help if needed. Sometimes, it’s easier and more cost-effective to call a pro — especially when it comes to taxes.
A solid roadmap makes financial management more accessible, and you’re better prepared to adjust when needed.
3. Create a financial plan for the next fiscal year
Now that you have your goals and ideas for achieving them together, it’s time to make a plan. A well-crafted financial plan is the cornerstone of your business’s financial health.
To create or update your plan for the upcoming fiscal year, gather essential data, including your previous year’s financial statements, sales forecasts and expense projections. Analyze this information to identify trends, strengths, weaknesses and opportunities.
Next, develop a detailed budget to help you achieve your financial goals. Your budget should outline your anticipated income and expenditures. For instance, if you want to advertise more next year to attract clients, budget for that spend and determine how new clients may affect your business.
Learn more about accounting year-end tasks.
4. Set up or refresh cash flow projections
A crucial component of your business finances is cash flow projections. These projections estimate your business’s incoming and outgoing cash over a specific period.
Cash flow management is essential for meeting daily operational needs and investing in your business’s growth. By accurately forecasting your cash flow, you can see potential cash shortages in advance and take steps to avoid financial difficulties.
To create cash flow projections, consider your sales revenue, operating expenses, debt payments and investments. Regularly review and update your cash flow statements to account for any business changes. By incorporating cash flow projections into your financial plan, you can make informed decisions to improve your bottom line.
5. Add 2025 tax dates and deadlines to your calendar
Tax planning aids in your decision-making for your business. Track significant tax dates to ensure you set aside money to pay and complete your business taxes on time.
The IRS publishes its business tax deadlines every year. Be sure to find tax dates for your state as well, and add both to your calendar.
These are the tax deadlines that will affect most small business filers, including LLCs and partnerships and corporations:
January 15, 2025 – 4th quarter 2024 estimated tax payment due
January 31, 2025 – Employers send W2 forms to employees
January 31, 2025 – Some 1099 forms
March 17, 2025 – Taxes due for partnerships, multi-member LLCs, and S-corporations
April 15, 2025 – Taxes due for C-corporations
April 15, 2025 – 1st quarter 2025 estimated tax payment due
June 16, 2025 – 2nd quarter 2025 estimated tax payment due
September 15, 2025 – 3rd quarter 2025 estimated tax payment due
September 15, 2025 – Deadline for extended partnership and S-corporation returns
October 15, 2025 – Deadline for extended C-corporation returns
January 15, 2026 – 4th quarter 2025 estimated tax payment due
Learn more about small business taxes for beginners.
6. Develop a risk management strategy
Identifying and mitigating financial risks is essential for your long-term success. Consider the specific risks your business faces:
- Are your business operations exposed to litigation risks?
- Does your business operate in cycles where there are busy and slow periods?
- Does your location face potential disruptions from natural disasters or weather-related events?
To manage these risks, you can develop a risk management plan. This includes identifying potential threats, assessing their likelihood and impact, and implementing procedures to reduce their effects.
For example, you might consider purchasing business insurance to protect against property damage or liability claims. You can also diversify your customer base and suppliers to help reduce your exposure to market fluctuations.
Creating continuity plans for potential financial setbacks is essential. These plans should outline specific actions to take during a crisis so you can recover faster. By being prepared for unexpected challenges, you can minimize their impact on your business.
Learn more about conducting risk assessments and what to consider.
7. Obtain or update your business insurance
Business insurance can protect you and your business from an unexpected loss after an accident or mistake involving your business, employees or customers.
The end of the year is a great time to ensure you have the right coverage. If your business has changed, you should make some adjustments. For example, if you hired an employee, your state may require you to update your workers’ comp insurance.
Small business insurance can cover a variety of incidents and situations, including:
- Commercial property insurance: Help protect the physical items you need to do business, including repairs to your building (if you own it), inventory and equipment up to your policy limit.
- Commercial auto insurance: Can help pay for damages if you or an employee are involved in an accident in a work vehicle.
If you already carry insurance for your small business, the end of the year is a great time to make policy updates and check in on your coverage.
8. Review your vendor contracts
As your business changes year to year, so will your relationships with your vendors. The end of the year is a great time to review your inventory and vendor relationships.
Start by listing your current vendors and reviewing each agreement. Review your deliverables and costs, and try to close out open payments.
Ask yourself: Does the scope of work still make sense for your business? If not, negotiate a plan that suits your current business needs and financial situation. And decide if it makes sense for your business to continue the relationship.
9. Evaluate your staffing needs
Financial planning for small business owners can mean increasing or decreasing staff. Should you add to your team for growth? Or cut jobs to allocate resources elsewhere? To help you budget for the year, consider your staffing needs as you plan.
Learn how to make training new hires efficient.
10. Audit your equipment and inventory
Depending on your line of work, the end of the year is a great time to examine your office equipment, manufacturing facility, commercial kitchen, or whatever is part of your production and workflow as a business.
Ask yourself and your team what you need and what you don’t. And don’t just limit it to equipment and machinery. Think about software and office supplies, too. Look to see what’s in good working order, what will need to be replaced and what it costs to keep everything running as-is.
If you know what you have and what you’ll need, you can better plan for your business’s financial future.
11. Work with a financial advisor
While many people use the services of a financial planner in their personal lives, they can be a valuable asset for small business owners. Here are some ways a financial planner can provide guidance:
- Develop a comprehensive financial plan. Don’t have time or the inclination to develop a solid financial plan yourself? A financial planner can help you create a tailored plan that aligns with your business goals and addresses your specific needs.
- Manage risk. They can identify potential risks to your business, such as market fluctuations, rising interest rates and economic downturns and develop strategies to mitigate them.
- Plan for succession. If you’re planning to sell your business or retire, a financial planner can help you develop a business succession plan to ensure a smooth transition.
- Manage personal finances. A financial professional can assist entrepreneurs with their personal finances and financial goals, such as retirement planning, estate planning and tax optimization.
By regularly monitoring and adjusting your financial plan, you can make informed decisions to keep your business on track and achieve your long-term goals.
