Summertime is here! As a small business owner, it’s your chance to enjoy the sunshine and spend time with friends and family. It’s also time to take a hard look at your business to ensure you’re on track to hit your growth and financial goals before the year is done. 

That last activity may seem daunting, but don’t worry, we’re here to walk you through it! 

It’s natural to set financial resolutions for your business at the beginning of a year. But just like any other resolution, the key to making it a reality is sticking with it and evaluating progress along the way. 

Halfway through the year is the perfect time to check on your business’s progress by performing a mid-year financial check-up. Use these 5 questions to get started!

1. How’s My Business Doing?

Growing creative agencies work at a quick pace and it’s easy to lose sight of the big picture if you don’t pay attention. Despite your crazy schedule, carve out some time to sit and reflect on how your business is doing and how you expect it to impact your finances.

Start by answering the following questions: 

• Has my business been growing as much as I expected? Am I growing more or less than I had planned? 

• What areas of my business have been the most successful this year?

• Is there any part of my business that has not worked as well as I was hoping?

Getting an overall sense of how your business is doing and whether or not it’s how you imagined it would be 6 months into 2022 is a great place to start your financial check-up. If you’re working with a team of employees or even contractors, check in with them and ask them how they feel about the state of the business. 

Growth, either more or less than you were planning, is going to impact your finances, which is why it’s so crucial to attend to your progress and goals. It’s important to be deliberate in evaluating yourself so you can use that momentum to your advantage or adjust your plans to make sure you get back on track.

2. How’s My Budget?

Now that we’re halfway through the year, you should have a clearer picture of how your revenue and expenses are shaping up. Evaluate these crucial parts of your business’ budget. 

• Evaluate your spending and identify any categories where you have strayed from your budget.

• Identify whether or not your business cash flow forecasts have shifted or where you haven’t estimated your costs correctly.

• Check in on your business’ emergency fund - is it fully funded and ready for the unexpected? Is it held in an account where it’s liquid but still earning interest? 

• Assess any projected large expenses. Is new technology, additional staffing, or upgraded equipment in your agency's future? 

Your business’ health and growth depend on having an accurate budget, so think of financial checkups as a necessary routine that keeps your business running smoothly. Unexpected variations in costs and revenue will change your bottom line and timely adjustments will help keep your business nimble and prepared.

After evaluating your budget, ensure it’s in a good position for the rest of the year and aligned with your upcoming goals. This regular habit of revisiting your budget helps you reinvest profits that you have made, increase your savings, or take a more conservative approach to your spending, if necessary.

3. Has My Tax Forecast Changed?

Tax compliance and planning is one of the largest hurdles any creative agency owner faces when they start their company (after all, there’s nothing creative about taxes, right?). Navigating the tax code can be confusing, overwhelming, and extremely stressful. But whether we like it or not, running a business means having to work with the IRS.

 Using your revenue evaluations from above, determine if your estimated tax payments need to change based on an increase in income. If your revenue projections have varied significantly since the beginning of the year, then it’s likely your taxes have too. It’s imperative that you stay on top of these changes to avoid costly penalties.

We get it…no creative agency started their business because they love to deal with the IRS, but asking yourself if your tax forecasts are accurate will ensure that you don’t have to deal with them more than you have to.

4. Am I Using The Right Tools?

A mid-year financial check-up is also the perfect time to evaluate processes and tools your business engages with daily. Having ineffective systems or software can slow down your productivity and ultimately cost you precious time and resources. 

Reducing the headache of managing your finances will allow you more time to focus on the parts of your business that you do enjoy while still being confident that your payroll, accounting, management reporting, and invoices are still being accurately recorded. 

As we mentioned above, be sure to check in with your employees and ask them how current processes and tools are working for their productivity and use their feedback to make any necessary changes.

5. What Changes Can I Make for The Future?

Day after day, you keep an eye out for new business opportunities, and you work to gain more clients and expand your business portfolio. Ensure this hard work and hustle pays off by keeping your finances and goals at the top of your mind. 

Just like you did at the beginning of the year, it’s time to update your goals and potentially create new ones for the rest of the year. Use these ideas to get you brainstorming on fresh goals for your company. 

• Bring on 5 new clients by the end of 2022

• Create 1 more product or service to increase value and revenue

• Increase productivity by eliminating 2 unnecessary distractions

• Set aside 2 hours per month to perform market research

• Increase traffic to website by 15%

Make sure all of your goals are SMART: specific, measurable, attainable, measurable, and time-based. 

Where do you want to be 6 months from now? 1 year from now? 5 years from now? Always looking forward will make sure what you’re doing today benefits your business in the years to come.

Perform a Mid-Year Financial Check-Up With an Outsourced CFO

Asking yourself what changes you can make during a mid-year financial check-up will give you a fresh and honest look at your agency’s financial health. 

At Lamplight Advisors, we understand how the financial aspects of running a business are the scariest and most daunting hurdles to your success. That is why we offer our expertise to creative agencies like yours.  To see how we can help you feel more confident in your financial plans and preparations, click here to schedule a conversation today.