For small businesses, the midyear point is a time to pause and reflect on your progress. A small business midyear review isn’t just about checking boxes; it’s about strategizing, adjusting course if needed, and setting the stage for success in the second half of the year. This is especially necessary in the aftermath of the record breaking inflation we all doing our best to survive. We are still getting to know how all of our COGS and fixed expenses were affected and have to diligently rework our forecasting. If it taught us nothing else, it taught us to stay more diligent on our market and expense forecasting.

To help you conduct your midyear review, here are some essential steps small businesses should consider during their mid year review:

Financial Health Check-Up 
Allison Allain, President of the Board for the National Small Business Advocacy Council and the CEO of PCI Builders in California’s San Gabriel Valley says, “You may feel like you don’t have time for this or that your accountants are probably on top of this, but you need to know your numbers. Small business owners who are disconnected from the finance side of their company are doing themselves a disservice both in how they’re able to discuss their company’s place in the market and in how efficiently their business could be running. Here are her tips:

• Review Financial Statements: Assess your balance sheet, income statement, and cash flow statement to understand your financial position. Look for trends, anomalies, and areas where you can improve. Even if you do this on a monthly basis, it’s good to do a mid year financial analysis.
• Compare Budget vs. Actual: Compare your actual financial performance against the budget you set at the beginning of the year. Identify areas where you overspent or underspent and keep notes of special occurrences. Not only will this help you during this budget year, but it will help you plan accordingly for the next one when the time comes.
• Cash Flow Management: Ensure your cash flow is healthy and sustainable. Consider adjusting payment terms or following up on overdue invoices to improve liquidity. As any small business owner knows, you can have invoices out, but getting the payment can be another animal all together. Checking on outstanding invoices and reassessing processes for payment are important and should be a priority.

Evaluate Business Goals 
Pasadena, CA small business owner Antonette Vanasek, Founder of Vanasek Insurance and Vice President of the National Small Business Advocacy Council, views business goals as something that isn’t done just once at the beginning of a small business’s startup. “In fact, small businesses should continuously look for ways to enhance and elevate their goals as they reach and, hopefully, surpass them.” Here are her tips for evaluating your small business goals:

• Review Strategic Objectives: Revisit the goals you set for the year. Are they still relevant and achievable? If circumstances have changed, adjust your goals accordingly. This could be that a goal no longer makes sense or it could be that you’ll reach a goal midway through Q3 and you now need to look at what that goal shifts to for Q4.
• Performance Metrics: Measure your progress towards key performance indicators (KPIs). Analyze which areas are performing well and where there’s room for improvement. Don’t just rely on the company vibes to tell you whether your business is succeeding or not.
• Customer Feedback: Gather customer feedback to gauge satisfaction and identify areas where you can enhance your products or services. This can be through social media channels, reviews, or customer calls. All feedback gives us a chance to re-evaluate systems and processes, as well as products, within your small business.

Operational Efficiency
Apryl Stewart, CEO of Skyview Concessions and Treasurer for the National Small Business Advocacy Council looks at operational efficiency on a monthly basis and if you don’t, a midyear review is essential to all small businesses. “You cannot know how to create better operational systems if you are not evaluating your current operations on a regular basis. At minimum, you should be reviewing your efficiency twice a year – in the middle and at the end.”

• Workflow Analysis: Evaluate your business processes and workflows. Are there inefficiencies that are slowing you down or increasing costs? Streamline where possible. You’re looking at ways to work smarter, not harder.
• Technology Audit: Assess the effectiveness of your current technology stack. Are there new tools or upgrades that could help you operate more efficiently?
• Inventory Management: Review your inventory levels and turnover rates. Optimize your inventory to avoid stockouts or excess inventory that ties up capital. Being nimble and ready for anything is key in today’s economy. Don’t get your money caught up in inventory that will collect dust on your warehouse (or garage) shelves.

Stay tuned for part 2 from the National Small Business Advisory Council where we will delve deeper into how small businesses can set themselves up for Q3 & Q4 success! And don’t forget to subscribe for updates and our newsletter. Read our latest issue here.

And in the meantime, download this blogpost as a ready to use checklist to use or delegate to someone on your team.