Happy Tuesday Folks!
Hope everyone had a Happy Fourth of July and was able to take some time to step away and reset.
Personally, I was able to enjoy time with friends and family, I also used the weekend to work on some projects I’ve been putting on the back burner like cleaning my truck.
Anyways, time is flying and we’re already at the halfway point in the year. With that being said, now is the perfect time to take a few minutes to evaluate where your business is at currently, where it’s headed and whether you are on track to hit the targets and goals you have set not only for the business, but also for yourself personally.
At the beginning of the year you probably had a plan. Maybe it was written down or you could have just had it in your head. But the goal was there.
It could be a revenue goal. Maybe your currently doing residential work and want to move into commercial. Maybe you’re striving for a less chaotic schedule so you can actually take time off and not work all the time.
Whatever your goals are, now is the perfect time to analyze and ask yourself: “Where is the business headed and am I on track to achieve my goals?”
I’m going to walk you through how I handle the mid-year review in my business and the best way to implement it into yours.
Let’s dive on in!
These types of reviewes are big within corporate America, but I think there is a version of this that when done correctly can be very helpful to contractors and business owners.
When perfoming these review’s I recommend taking a two-step approach.
1. Review Financial Performance Year To-Date
When done correctly, the first part mid-year financial review is just a slightly more formal, comprehensive version of your monthly financial review. However, the mid-year review should be focused on the performance for the entire first half of the year.
Run your financial reports for January through June and perform the same review that you would if it was your monthly financials.
Zooming out like this shows you the bigger picture of how the business has performed so far and shows trends that you wouldn’t necessarily catch by reviewing financials month to month.
For example, January, February and March were slow but business picked up in April and have been crushing ever since. Your monthly financials would show three losing months followed by three profitable ones, but taken one at a time they won’t tell you if you have been profitable for the year so far.
That distinction is important not only for visibility, but it also affects your taxes.
Knowing your actual profit year to date tells you if you have a tax liability building. If you do, work with your CPA or tax preparer to determine if you need to make an estimated payment to the IRS before the deadline.
Many contractors that do any kind of review stop at this point. They look at the numbers, get a sense of how things went and move on with their day. While that is better than nothing it misses the whole point of doing a mid-year review.
2. Take a Step Back and Evaluate How Business Performance Is Stacking Up Against Your Goals
Now that you’ve done the financial review, take a step back and evaluate is the business and business performance aligned with your goals.
These don’t have to be financial goals either.
I’ve talked to several contractors recently who are looking to hand off the day-to-day operations to an employee or successor and semi-retire in the near future.
Whatever your goals are, this is a chance to take a step back and level set where you and the business currently is and where you want it to go.
Here’s some quick steps on how to do this effectively:
Pull up your goals that were set at the beginning of the year: Which ones are still relevant, and which ones have been scrapped?
Rate each goal honestly: Rate them by on track, ahead, behind or scrapped.
For the goals rated behind: dig into why you are behind and what are the driving factors that have caused the business to be behind on this goal.
For the goals that were scrapped: Why? Were they unattainable or did priorities change?
Evaluate the goals themselves: Are they still relevant to your overall vision? Has the market, competitors or ideal customer shifted enough that you need to change what you should be chasing?
Follow where your time and money actually went: Anything using resources that doesn’t help accomplish a goal needs a hard look.
Listen to customer/prospect feedback: What is the feedback customers are giving you and is it valid?
Check your team against your goals: Does the current structure support what you are trying to do in Q3 -Q4 or has things changed so significantly that you are no longer aligned with what you are trying to accomplish?
Devaluate and level set: Determine which goals are aligned and recommitted, which ones get adjusted and which ones get scrapped.
Once this review has been completed, ask yourself: Is the business still aligned with the vision and goals I have set?
If the answer is Yes - that’s great! Keep doing what your doing and finish strong.
If the answer is No - Now is the time to make adjustments. You still have plenty of time to take action. Whether it’s making an adjustment to pricing, tightening up collections or being more intentional about the jobs you take to change the trajectory before the end of the year.
If your doing your mid-year review and want to make sure your not missing or overlooking anything, I put together a step-by-step checklist.
You can grab it here: The Mid-Year Strategic Review Checklist
As always, feel free to reach out if you have any questions or feedback.
Question of the Week
What is the most ambitious goal you’ve set and have you acheived it?
That’s all for this week folks!
Want More?
Shoot me an email if you have any questions or requests for topics you would like me to write about. I’m all ears and I respond to all emails personally.
Til next time, cheers!
Preston