More Behind Than Ahead. Are You Ready?
As you wrapped up the celebratory chaos of July 4th, did you also notice the stark reality that half of 2024 is already behind us? Are you prepared for what lies ahead in the second half?
The holiday weekend didn't sneak up on us. We planned who to visit, confirmed which parades and fireworks to see, and, of course, the food! Nothing was left to chance, but we knew how to adjust if something came up. We had a great time enjoying the holiday weekend, and I hope you did too!
After July 4th, it's only two months until Labor Day, another two until the November Elections, and a final sprint to Christmas—2024 will soon be over. It may seem a bit early, but how do you feel about the second half?
Mid-Year Review: Have We Gotten Better?
Reflecting on the planning and organization that goes into July 4th draws a sharp contrast to how many leaders approached Monday, July 8th. Most probably thought it was the start of just another week. They did not appreciate their oversight: the absence of a mid-year review.
Pausing to reflect on what has happened, assess progress, and recalibrate goals is critical for the rest of the year. We meticulously plan for celebrations, but we must also prepare our businesses for the challenges and opportunities ahead.
Don't overthink this. A couple of questions and a couple of "whys" are all you need. Here are four examples:
Did June end near where we expected to be with our Top 3 goals? Why or why not?
• What were the biggest surprises and unexpected challenges? Why did they happen, and what is their impact?
• How have our strategies, capability, and culture improved? Why do we believe they did?
• What are the three biggest obstacles we have in front of us? Why have we not been able to overcome them yet?
Fall Planning: Elections Have Consequences
Labor Day is the informal kick-off for fall planning, especially for large companies. Business coaches and accountants advise SMBs (small and medium-sized businesses) to develop goals and plans, but far too many never go beyond writing down a few targets. If this is you, you may want to think more about it this year.
The November election carries significant implications for U.S. economic policy. A Democratic win would anticipate a continued focus on infrastructure investment, clean energy initiatives, and social welfare programs, accompanied by higher taxes to fund these efforts. Conversely, a Republican victory could usher in a return to policies favoring deregulation, tax cuts, and a strong emphasis on domestic manufacturing and energy production.
The potential shift in economic direction creates uncertainty for businesses, as regulatory environments, tax structures, and government spending priorities could change substantially based on the election results.
Fall planning can help mitigate some of the risks associated with this uncertainty. Forecasting and scenario planning can be used to gauge how policy changes will affect customers, inflation, and taxes. Proactive planning during this period can buffer against economic volatility and position your company to adapt swiftly to the post-election landscape.
Taxes are Due. Prepare to Pay Less.
Just as quickly as July came, so will next January. And that means 2024 taxes are right around the corner. Here are three things business owners should do before November:
• Meet with a tax advisor to share financial outlook and business changes so they can strategize to lower your tax bill.
• Complete a detailed review with your accountant to ensure you understand the entries in each account, and that transactions are correctly and consistently recorded.
• Make your estimated tax payments.
The key idea: give yourself time to implement new strategies, avoid year-end accounting "emergencies", eliminate tax surprises, and reduce year-end stress.
Move From Chaos to Control: Avoid Surprises and Financial Fireworks
Everyone loves surprises, right? Wrong! Especially business leaders. Why? Surprises can leave us excited, happy, and gratified. They also make us feel:
• Out of control
• Confused
• Why didn't I know?
• Oh, crap
At Procter & Gamble (P&G), I learned that business leaders did not like profit surprises, up or down. They caused stress and more work for everyone. Profit forecasters like me prayed to the God of Offsets. If something bad happened, we prayed for something good, and vice versa. But we didn't just hope. We used a lot of numbers, functional leaders, and a Financial Director's expertise to advise General Managers who needed to know.
We look forward to July 4th fireworks. You do not look forward to fireworks from a financial surprise. Are you ready for what's ahead? You need to know.
A Fractional CFO can provide forward-looking financial expertise and guide your business through uncertainty.
