Year End Planning Part One:
We’ve all heard the saying: “If you keep doing the same thing over and over again, you’ll keep getting the same results.” If we want next year to outperform this year, we need to carve out time to reflect on the past and plan for the future. This means gathering all the necessary information, stepping away from the daily grind, and dedicating a few uninterrupted hours to process it thoughtfully.
Every business is unique, and your approach may vary—but these are the steps I took each year as a business owner, especially during the last five years before selling my company. This intentional review and planning practice helped me make better decisions and set my business up for success.
So, find a quiet place, commit the time, and go through the following exercise. You—and your business—will be better for it.
Year End Planning Part 1
People:
Our first step in planning for next year is to reflect on this past year. Start by documenting your review in a tool like Google Drive or another easily accessible platform, and label it clearly so you can find it next year. This will allow you to compare year-over-year and make better-informed decisions.
Let’s begin with your clients. Export a list of all the projects you completed this year from your accounting software. Then, go through and categorize your clients: highlight the ones where the job went smoothly in green, those that were somewhat challenging in yellow, and the truly problematic ones in red.
Next, review your job costs. For each project, note the final job cost next to the name and highlight the job cost in green if it was on target or red if it wasn’t. Then, take a moment to analyze. What patterns do you see? Were your problematic clients the ones with higher job costs? Did your smooth projects stay on budget? Why and why not?
Now, evaluate the timeline. Note and compare similarly how long you estimated the project would take versus how long it actually took, adjusting for any change orders. Reflect on what this data tells you about your operation. Are there gaps in your process? For example:
Do you need to improve your client prequalification process?
Is it time to replace “guessing” with a more precise estimating system?
When you tell a client a project will take six weeks, is that a realistic timeframe?
Finally, think about what you’d like to see when you review this information next year. Identifying and addressing these patterns now will help you plan for a more efficient, profitable, and enjoyable year ahead.
Now let’s evaluate our employees, trade partners, and vendors. Start by making a list of your primary subcontractors and employees. Next to each name, assign them a letter grade from A to F. When grading, focus on key factors like communication, punctuality, thoroughness in their work, dependability, and lack of drama. Notice that price isn’t on the list. While pricing matters, it’s not the most important factor in building a reliable and high-performing team.
After grading, think about what improvements you’d like to see from each person. Then, schedule a time to have a conversation with them about these areas for growth.
Next, make a similar list for your primary vendors. Grade them based on criteria such as:
How easy they are to work with
Whether deliveries arrive on time
Accuracy of orders
How seamless returns are
Finally, take a hard look at these evaluations. Do you need to replace any subcontractors, employees, or vendors? As a best practice, consider replacing at least one underperformer in each category every year. The goal is to continuously raise the bar. Elevating your team and vendor base is an essential part of running a successful business and improving profitability, which in turn enhances your quality of life.
Next move on to Year End Planning Part 2