A Guide To Your Mid-Year Business Review

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Happy Fourth of July!
It’s hard to realize we’re halfway through the year. Since last year, a lot has changed in my life. Businesses are springing up, people are leaving their masks at home, and you may even be planning a vacation. I hope you have a chance to relax and enjoy the summer.
But, before you do that, why not clean up your business around the halfway point of the year? I’m a big believer in breaking down work into manageable portions. However, far too many business owners, sadly, wait until the end of the year to clean up various elements of their operations. It’s a big, intimidating task at that moment.
You’ll thank yourself later if you complete some of these duties today. Here’s a handy checklist to get you started.
Progress, not perfection, is the goal.
Let’s think about the goal of this review before we get started. It’s not meant to embarrass or overwhelm you. It’s simply to raise awareness of your company, assess its performance, and take remedial action while there’s still time to make changes.
Small behaviors repeated over time are at the heart of a lot of company success. You must concentrate on the behaviors that will help you achieve your objectives and let rid of those that will not. Progress, not perfection, is the goal.
ADDITIONAL INFORMATION FOR YOU
Get to a quiet spot and assess how you’re feeling.
The first action item, ironically, is a pause in the action. You’ll need to calm down, find a quiet area where you won’t be disturbed, and assess your feelings about the company. This isn’t something that should be done on a whim or on a random day. Instead, set aside one day, or a few if possible. For your evaluation, find a peaceful location. (Some business owners do this offsite.)
Once you’ve found a quiet spot, consider how you feel about your business. Are you, for example, living up to the company’s mission and vision? Are you on track to meet your objectives? Are you putting in the hours that you want to put in? Are you worried about the future of your company? Do you feel overwhelmed?
George Kinder, the founder of the Kinder Institute of Life Planning, thinks that emotions alert us to what we want to change and provide us with the energy to do so. Even when our rational minds fail us, they can motivate us to act. As a result, don’t fight your feelings. Allow them to motivate you to create a plan to change your life.
You’ll want to set goals for yourself, but first consider your accomplishments and obstacles. Celebrating your accomplishments might help you appreciate your progress and reveal what’s working. Were you able to find some ideal clients, for example? Did the work you’re doing make you happy and fulfilled?
When it comes to challenges and areas for growth, you might find that you’re falling short of some of the objectives you set for yourself—are you working too much? Not enough money coming in? Have you taken on too many clients who aren’t a good fit? Are you not gaining weight as quickly as you’d like?
Carl Richards, a Certified Financial Planner and the originator of the NY Times’ Sketch Guy column, says, “Goals are merely estimates.” You can’t forecast or, in many situations, influence where you’ll be or what the world will look like ten years from now.
So, rather than thinking that everything has to be flawless or that you can’t change your mind, choose a path and take the next appropriate step. What are the present roadblocks or stumbling blocks in your path? What can I do to get started in the correct direction?
Examine your cash flow.
Your company’s cash flow is its lifeblood. Yet, so many businesses act as though everything will take care of itself as long as there is enough revenue flowing in. You may even entrust your financial situation to your accountant. While analyzing your income and client pipeline is critical, controlling cash flow requires some effort and planning.
The Profit First System, established by Mike Michalowicz, is the system I choose to employ for myself and my clients. Instead of reading and using profit and loss figures, most business owners rely on “bank account balancing,” which involves checking our bank balance and making decisions based on what we see. Rather than trying to break that tendency, our strategy focuses on utilizing it.
The system operates by dividing money into five categories:
Income\sProfit
Operating Expenses Owner’s Comp Tax

The income account holds all of the company’s earnings. Then you allocate that income into predetermined percentages based on your real business revenue on the 10th and 25th of each month. Your firm will be prosperous if you allocate your funds in this manner (because you give yourself a bonus every quarter). You also pay yourself a fair wage and have enough money to pay your quarterly tax payment. Furthermore, because you can use a specific amount, it helps you become more efficient with your running expenses.
This method allows you to track how close you are to meeting your sales and profit goals and alerts you in real time if there is a problem. This technique enables business owners to get control of their cash and become more deliberate with it, and it’s simple to use because it reinforces habits that we already have. More information about the system may be found here, or you can listen to my recent interview with Michalowicz.
Examine your tax obligations.
You probably don’t want to worry about taxes right now, but now is an excellent time to do so. You should have sent in two tax payments by now (4/15 and 6/15). Even if you’re using the Profit First method, mid-year is a good time to check in with your accountant to see if your mid-year tax predictions are on track. He/she/they should be able to examine your income, calculate a yearly projection, and assist you in determining how much tax you should due (or this could be a different person if your accountant and tax preparer are other people)
You don’t have access to an accountant? That’s OK. You most likely have a bookkeeping system in place, such as QuickBooks, Wave, or Gusto. Then, print out your profit and loss through June 30, double the income, and use an online tax calculator to figure out how much you owe.
You still have half a year to catch up on estimated tax payments if you fall behind. Simply calculate how much you owe, divide it by the remaining six months, and deposit the difference in your tax bucket each month.
Perform a cost analysis.
It’s an excellent idea to undertake a cost analysis while you’re analyzing your buckets and profit and loss. If you’re having trouble making ends meet, there are two options: increase sales or reduce spending. And, of the two, cost-cutting is frequently the more expedient.
“Frivolous costs like unused recurring membership fees, office space that impresses no one, or that expensive car that is ‘justified” because it is an expense,” Michalowicz finds, “such as frivolous costs like unused recurring membership fees, office space that impresses no one, or that expensive car that is ‘justified” because it is an expense.”
Print the following two items to complete the cost review:
Expenses for the previous six months
Rent, subscriptions, internet access, training, classes, periodicals, and other recurrent expenses

Add up all of your expenses and then multiply it by 10%. Then reduce the cost by that amount. To do so, you’ll either have to cancel or negotiate any remaining expenses that your firm doesn’t require to run smoothly and keep your consumers satisfied.
Make a list of what comes next.
The process itself should be enlightening and encourage you to be more deliberate about the adjustments you want or need to make. It’s critical to document these adjustments and plan out the activities you’ll take to achieve your new objectives.
Limit the adjustments you wish to make to two or three, and write your action steps as: What can I do about the problem I’m having?
I’m not sure how I’m going to accomplish it.
When will I be able to do it?
Who can hold me responsible?
What are my thoughts about it?

After you’ve completed the exam, set aside some time to rejuvenate for the second half of the year./nRead More