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Does Your Business Need a Physical?

Apr 25, 2018

Private business owners and managers spend most of their time actively involved with the everyday operations of their organization. But just as an annual checkup from your physician keeps you on top of your personal health and well-being, an annual checkup is also necessary for the health and well-being of your business.

If your organization has a business plan (and it should), then conducting an annual review of the plan is a great way to gauge how your business has performed, and it allows you to adjust the plan based on current performance and targets.

Considering certain tactical items during your annual business plan review will help improve your longer-term business health and personal success.

Review Progress to Date

Did you meet the primary goals and targets you outlined in your previous year’s business plan? As an owner, this should be the first question you ask when reviewing your plan. Staying on top of your progress to date and ensuring action items get implemented are key areas that will ultimately determine the success of your business. Perform quarterly reviews of goals and targets, which will make documenting results easier and force you to assess different opportunities.

Communicating business goals with your staff helps provide transparency around progress, and it clarifies what each team member needs to contribute in order for your organization to be successful. If there are goals you set for your business that weren’t met for the year, it’s important to evaluate the areas where the business fell short and determine the steps required to meet those goals in the coming year. Look back at the reasoning and assumptions you made to set those initial goals, as this can help you determine the best course of action for changing direction and, ultimately, achieving success.

Reviewing your cash flow statements, financial statements, profit and loss forecasts and sales forecasts is a great way to understand how your company has performed over the past year, and it can provide insight on how your goals should be adjusted based on current performance. Within your annual review, you should be adjusting both your long-term and annual growth goals where needed. When looking at those numbers, detail how you will achieve your goals, who you need to engage to ensure you meet those goals, what marketing channels you will need to employ and what metrics you will need to manage progress. Examining these critical factors will give you a clearer picture of where your business is currently and help you manage growth strategies based on financial projections for the future.

Create or Update Your Succession Plan

Conducting an annual review of your business plan presents the perfect opportunity for you to review your succession planning strategy. As a company owner, you invest so much time, effort and money into the success of your business. It is important to plan for both expected and unexpected life events. This includes financial hardship, injury, disability and even death. Develop a detailed plan for the succession or transfer of your business ownership to help ensure all of the hard work you’ve invested in running your business will continue in your absence. It’s a good practice to have a specific plan in place for each key management position, including your own. Planning for a short-term absence or a permanent vacancy can also help you determine a strategy for promoting internally or whether external recruiting is the better option for your business to succeed in the long term.

Don’t Forget About Your Estate Plan

While in the process of updating and reviewing your succession planning strategy, it’s a good idea to also consider your personal estate planning needs. As a business owner, your company will be a significant part of your estate; taking time to review your estate plan once a year will help mitigate unforeseen circumstances. Just as your business evolves, tax laws are evolving as well. Staying on top of those changes will help ensure your plans are current and relevant.

Review Your Relationships

It’s also a good idea to (at least annually) review the customer, supplier, banking and professional firm relationships that you have. There may be changes to fees you could be taking advantage of, or new products and services that can open the door to further business efficiencies. This will also present you with the chance to discuss any service concerns you may have and examine ways to improve cash flows.

Start the Year Off on the Right Foot

Your business plan is a dynamic document that should be kept current as your company and the market environment evolve. When you started your business, you may have created this plan for a specific reason, such as to secure financing. However, as your business has grown, so too have your planning needs and requirements. Like going to the doctor, checking in on your company’s well-being and financial health will help you closely monitor the difference between your business plan and actual results and will help drive future success.

Business plans are not just for startups. Contact Wipfli to learn more about how we can help you monitor your company’s performance and guide you through the next phase of your business.



Paul T. Lally
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