It is that time of year again, the closing of one year and the start of a new one. The new year brings so much promise, hope and intention to do better, be better and stick with our resolutions.
In order to take action and achieve our goals in the new year, we first need to step back and look at the past year so that we can learn from our accomplishments, learn from our mistakes, and make a plan that we will actually follow through with!
Every year I do an annual business review and business plan for the next year. In this guide, I share the exact review framework that I use to look back on the past year and learn from it.
Step 1: Review Your Financials
Total Revenue and Expenses
The first stage of your year end business review is to examine your financials. Calculating your total gross revenue, expenses and then net revenue will give you a skyscraper view of your income for the year and is a good place to start.
Sources of Revenue
From here you should examine the sources of the revenue and break out what percentage of your total gross revenue came from each source. Your revenue sources might include affiliates, advertising, digital products, coaching, physical products, courses etc.
Looking at the specific sources will help you when it comes to determining where you need to focus your efforts in the coming year to have the most impact on your earnings.
Expenses
Next examine your expenses. If you are using an accounting software such as Quickbooks you will easily be able to see all your expenses grouped together in the annual profit and loss statement.
Again this is a great way to get a skyscraper view of your overall expenses, but I personally like to dig a bit deeper into the recurring monthly expenses. These are typically all the subscriptions you are paying for monthly.
Use an excel or Google sheet to note down all the recurring expenses and then review if you still need them all, are you paying for a stock photo subscription website you are no longer using, or a website plugin that you have switched off? Look for any unnecessary expenses you can cut and cancel these.
To Summarise, Calculate Your:
- Gross Revenue
- Revenue by source e.g. affiliates, advertising, retreats, products, courses
- Expenses
- Net Revenue
- Net profit margin % (gross revenue/net revenue)
Once you have this information gathered you will have a good picture of your overall profitability in your business, where the main sources of income are coming from and if you can cut any expenses.
Step 2: Review Your Time
Once the financial review is completed you should review your time. If you are not using a time app you can estimate where your time was spent over the last year, however I strongly recommend using a time app that can track your hours spent on specific projects and activities.
Not only does a time tracker help your focus and boost your productivity, it also gives you insight into where you are spending the most time. This is super valuable to help you determine where you should spend more time, less time and what you should outsource.
I typically break out my time spent on the most common things in my business, for example emails, blog, social media, digital product creation, sales, coaching, press so that I can see exactly where the majority of time is being spent.
Break down your core categories of work on your business and attribute the percentage time spent on them in the past year.
Step 3: Compare The Financials and Time
Now you can compare your financial analysis and your time analysis. This is a key part of your review because your goal is that you are spending the most time on tasks and projects that will have the highest impact on your business.
If you find that you are spending the largest percentage of your time on social media, but social media doesn’t earn anything for your business you need to cut down the time spent or hire this out to someone to manage.
As a digital product and course creator I am interested in looking at whether the time spent on specific products makes sense relative to the revenue it generates. If I am spending more time on a product that is generating less than another one, it could be time to retire that product or service in favour of allocating more hours to the product generating more revenue in less time.
Step 4: Review Your Accomplishments
This is the fun part of your year end review, where you get to pat yourself on the back for all the things that you accomplished in the past year that have helped to move your business forward. This doesn’t have to be financial accomplishments, this list can include press that you secured, business books that you finally read or blog posts that you published.
Professional
Take a pen and paper, or open up a document and use these prompts to guide you:
- What went really well last year?
- What are you most proud of?
- What milestones did you meet?
- What did you accomplish?
Then take a moment to think about how each of these things made you feel?
Personal
Personal accomplishments are as important as the professional ones and are often correlated with the successes that you have in your business. For example, you may have spent more time with family, prioritised exercise, learned a new skill.
Use the prompts to guide you:
- What went really well last year?
- What are you most proud of?
- What made you feel happiest?
- How did you show up for yourself and others?
Step 5: Review Your Learnings
Lets not call these failures, and instead refer to them as learnings. Every negative thing that happened (or didn’t happen!) in the past year is an opportunity for you to learn so that you can make sure to get these things right in the coming year. Again do these for both professional and personal.
Professional
- What could you have done better?
- What goals did you not attain that you had set yourself?
- What did you not accomplish that you had hoped to?
Then take a moment to think about what you learned from this. What did these ‘failures’ teach you that you can take into the coming year so that you don’t make the same mistakes.
Next think about how you can make sure that these things that are still on the goals list be accomplished in the next year?
Personal
- What didn’t happen that you hoped would?
- What did you not enjoy the most?
- What would you like to change in the coming year?
Now think about what would you like to change in your personal life in the coming year to make sure that you don’t have a similar experience in the coming year?
Wrap Up
Once you have completed the year end business review the next step is to work on your plan for the upcoming year. You are armed with the information on what was a financial success, where you spent your time and how this impacted your business and a summary of what went well (and what didn’t).
Use this review to map out your plan for the coming year so that you can set realistic smart goals that you will actually accomplish! To help you with your goal setting read How To Set Your Goals and Intentions For The New Year where I share the framework I use to set my goals so I have the highest chance to achieve them and how you can do this too!
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