Year-End Maximization

When entering the fourth quarter, it is important to focus on finishing this year well. While many urgent items may remain on the ever increasing to-do list, in the last quarter we want to be sure to focus on the execution of those items which will maximize profitability.  As you consider year-end, here’s a list of topics that we think you might find useful to have a strong last quarter.

Maximize Customer Opportunities

• Determine who your best customers are and touch base with them. Think strategically about how you might interact with them over the coming holiday season. This is an excellent time to express appreciation for their business while seeking constructive input.
• Worry about customers who have payment issues. It is common practice to run up accounts prior to year end and then to file bankruptcy. Caution in this area will save a lot of grief.
• Make sure you have adequate resources to respond to customers in the year end.
• Holiday’s can cause resources to be light in a busy season. By beginning early to plan for resources the business avoids the disappointment of scheduling someone whey they planned for a holiday.
• Inventories are another key factor. Holiday sales activity can require pricing and supply decisions. Where possible make the decision point analysis in advance. Decisions include additional orders, order reductions (both of these are limited time frame problems), price adjustments (i.e. sales) based upon sales activities, and advertising strategies. By planning these in advance, profitability can be maximized.

Effective Holiday Preparation

As we look ahead to Thanksgiving and Christmas in the last quarter, we want to anticipate the business that will occur around these holidays.

• Ensure that clients will have what they need as they also anticipate year-end.
• Determine staffing needs for the holiday season.
• Be certain that staff is able to utilize their remaining vacation time while also allowing enough staff to meet clients’ needs.
• Determine and communicate the holiday staff schedule now so that employees can prepare.
• Maximize staff resources productively by utilizing any slower time around the holidays to tackle the To-do list.
• Schedule year-end performance reviews with employees. This will assist in determining employee bonuses. Bonuses should connect to the performance of the business. These decisions need to be made in October before we lose objectivity in the upcoming holidays.

Year-End Expenses

• Recognizing seasonality, review the budget to ensure that it accurately reflects what is anticipated in the last quarter. Review projected cash flow and profitability.
• Begin looking at year-end bonuses to determine how much this will be and what preparation should be done to determine these.
• Anticipate year-end expenses such as holiday parties and determine how much the firm wants to spend. Communicate with employees now in order to monitor expectations.

For more information, please visit the Giersch Group at www.gierschgroup.com or contact us at prosper@gierschgroup.com.