The Top 5 Year End Must Do’s for Plant-Based and Vegan Small Businesses are here compiled by Bonnie Brown, Co-Founder of Passion Placement, to help you reflect on the past year as year-end approaches. What were the wins and losses? What worked well or didn’t?
Strategic Planning & Know Your Numbers
Start with a personal review. You need to be in the right place and have the key events analyzed from your perspective before you gather your leadership team, stakeholders and perhaps consulting experts.
Strategizing begins with planning. Assess the goals set at the beginning of the year and determine if those goals have been met. If not, why not? Should they be on next year’s goal list? Is there a better approach? Layout the facts, brainstorm with your team and boil down a plan with clear goals for the New Year.
Of course, all companies want to increase revenue, but strategic planning needs to be more specific. Goals can be defined through metrics, such as increasing revenue by X% each year for three to five years and maybe beyond. Clearly establish and write out how you measure these metrics and what success will look like month by month.
Know your cost per customer. Track your metrics monthly. These key numbers need to always be forefront of your mind. Then ask what could be done to turn up the volume in any of these areas when needed? This will help you to be prepared to move quickly and make adjustments as you move through the year.
Budgeting for the New Year and Beyond
Use last year’s historical data, along with your new strategic plans, to build a realistic budget. The numbers need to be carefully worked through to properly measure your progress, make corrections and gauge your position throughout the current year.
Budgeting is the process of allocating financial resources to the various projects, programs, and campaigns identified in the strategic planning stage. Most businesses construct their budget by analyzing the previous year’s actual expenses and revenue and building their budget based on those numbers. A growing company needs to think more in terms of future goals and how to get there with the past as a basis for assumptions.
If you are a newer company without a reliable, experienced finance team you should look at outsourcing for part-time CFO level support. Don’t head into uncharted waters alone.
In some cases, executives building the budget will review the long-term plan and draft an annual budget that moves toward achieving those goals. Ultimately it is through the budget that you will define your cash needs for the following year. It’s important to be clear where your cash balance is and where your key metrics are trending. Does your budget require a need to raise money? Will it be debt or equity? And if this isn’t your area of expertise, get the help you need to get it right.
Plan Your Hiring Goals and Strategies
2020-21 brought us the “Great Resignation”, an interesting side effect of shutting down the world due to a pandemic. Work as we know it has changed forever. Never before have so many employees quit jobs to change or advance their careers in a more meaningful, mission-aligned direction. The pandemic forced many companies to go remote, a choice that will remain permanent for some
The point here is that the current environment and trends need to play a role in hiring goals and strategies. Today your growing plant-based vegan enterprise has a greater opportunity to find passionate talent that will fit in, support and grow your culture. This in turn feeds the positive forces and encourages growth.
Think about how you can take advantage of this climate and bring in the best and the brightest to share in your mission. Will you use stock options? How does your pay scale and benefits package compare to other companies in your territory and perhaps remotely? Benefits and income must be similar before mission-alignment kicks in as the best choice.
Be careful not to lose focus on keeping the employees you already have. Make sure your compensation and benefit structures are at least in line. Communication, acknowledgment, personal growth, and caring need to become cultural. Be transparent. Share your vision and strategy with your team members often. Know their needs, wants, and goals and take action on them every day. Employee turnaround is extremely costly and can even be deadly. So, plan ahead and include all of your people. Make sure they know that you care.
Be Prepared for Required Tax Filings and Obligations
Get your bookkeeping up to date no later than mid-November and meet with your accountant for year-end financial and tax planning. Make sure you’ve paid your estimated taxes and are prepared to create and deliver required tax forms such as:
- Form 1099-NEC and Form 1096,
- W-2 and W-3 Forms
- 940 annual and 941 quarterly payroll tax returns,
- Appropriate reporting of stock option exercises, which may include Form 3921 for ISO’s, inclusion on form W-2, etc.
If you have company vehicles, be sure to have your supporting records for business vs. personal use.
Get your accounting records in order
For tax and financial reporting purposes, you should prepare for year-end closing. If you have inventory, prepare for a physical inventory count. Take a manual count of what you have on-site, in your warehouses or storage units; your stock, your merchandise, raw materials (if you are in production), work in process, and finished products. Update the records, value these products, and investigate any discrepancies.
It is also advisable to do a fixed asset audit and valuation. Determine loans to corporate officers, shareholders, employees, &/or parent company are recorded properly and agree with the other party’s records. Determine if there are any new accounting standards that will be effective soon and what that will mean to you.
Do you have audit requirements? If so, engage your auditors and ask for their year-end checklist.
Every plant-based and vegan business shares in the leadership for fundamental change in our food system and in removing animals from cruel and unsustainable manufacturing and farming practices. The success of each lifts the momentum of change for all.
End-of-the-year activities are important as they set the stage for the New Year. Create a clear road map with a few stops to celebrate and rest and you will be surprised how much your business can grow in a year, set for success.
Remember… “If you fail to plan, you are planning to fail!” – Benjamin Franklin
Bonnie Brown is an experienced business executive, CPA and Co-Founder of Passion Placement and New Earth Partners with extensive expertise in accounting, finance, raising funds, in both private and public markets, SEC reporting, taxes and leadership. Bonnie offers outsourced CFO and consulting services, for employers and coaching for candidates.
New Earth Partners provides fractional CFO Services, accounting, bookkeeping, funding support and HR consulting to companies aimed at eliminating the need to make food and materials from animals and focused on building a sustainable future.