Clean your business in December
One of the best ways to give your future the maximum opportunity to be successful is to make sure each new year begins with as little baggage from the past as possible. So, what grandmother used to do after a long winter, businesses need to do in December. Instead of spring cleaning, let's do some December baggage elimination. Here are some examples.
Eliminate the stuff.
Even if you're not a pack rat, like me, you've accumulated stuff you don't use anymore. If you're not using it, throw it away; if it has value, sell it or give it away.
Deal with the graveyard.
Don't tell me you don't have one. Whether it's an old computer, printer or chair - even if it's not broken - if it hasn't been used recently, it's worse than clutter; it occupies valuable space. Sell it, give it away or give it a proper burial; just get it out the back door.
Retool your organization.
The only thing worse than firing someone is letting an unproductive employee hold you back for another year. The timing may seem insensitive, but it's just an unfortunate coincidence that the holiday season coincides with December cleaning. Remember, you owe your productive people the most effective organization possible, which often means you have to let unproductive people find their future somewhere else.
Use the ABCD approach: Identify the most profitable As to the least profitable Ds. Worship the As, cater to the Bs, encourage the Cs and teach the Ds about self-service. Customers demanding more commitment from you than they're willing to reciprocate may, like the employees above, may have to go find their future elsewhere.
Become an inventory Nazi.
As you did customers, categorize inventory from the most profitable As to the least profitable Ds. Stock lots of As, some of the Bs, maybe a couple of the Cs, but never let one of the Ds spend one night under your roof unless it's paid for. Remember, modern inventory management means just-in-time, not just-in-case.
Scrub accounts receivable.
Take the hit, and write off uncollectable A/R this year so you can start January with a clean list.
These last two jobs won't feel good but will improve your chances for a better new year, and they will make your banker happy because you demonstrated management discipline. And if you've had a good year, they could also contribute to year-end tax planning.
Write this on a rock... Don't wait for spring. Start December cleaning today.
Jim Blasingame is one of the world's leading experts on small business and entrepreneurship. He is the creator and award-winning host of the nationally syndicated radio program, The Small Business Advocate® Show. In addition to his weekly columns, Jim is the author of two books, Small Business is like a Bunch of Bananas and Three Minutes to Success.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.