What's Not Working? How To (Accurately) Audit Your Business Before the New Year

As the year winds down, Q4 offers a prime opportunity for business owners to pause, reflect, and strategize. Between end-of-year deadlines and a busy holiday season, it may seem like a time to dig in deeper—but stepping back to take stock of your business’s wins and losses can set you up for a successful 2025. 

It’s hard to achieve positive growth without looking back on your business’s performance. Conducting a thorough audit before the new year can shed light on what’s working, what needs improvement, and where to focus your efforts to thrive in 2025 and beyond.

Planning in Q4 helps to build momentum going into January, ensuring you’re ready to hit the ground running with a clear, purpose-driven direction. From finances to client experience, there’s a good chance you’ll find opportunities to optimize your business operations—but first, you must identify them!

Here are a few areas to examine as you evaluate your business and plan for its future. 

Review client feedback 

Your business can’t survive without clients, so this is a great place to start your end-of-year business audit. You may see your brand experience one way, but if you regularly hear feedback to the contrary, it’s time to rethink your customer journey.

“Knowing what you are doing wrong, in your customer's opinion, is key to understanding what isn’t working for you,” assures Craig Peterman of Craig Peterman Photography & Videography. “If I start hearing the same feedback or concerns from multiple clients, it's definitely something I need to address.”

For example, if several clients mention slow response time in their offboarding surveys, turn that criticism into a goal to reply more promptly in the new year. For some, it’s difficult to hear negative feedback; however, treating your clients’ observations as a chance to improve will only lead to happier customers and more positive reviews.

Analyze your financial reports

Many business owners regularly evaluate their finances throughout the year, whether monthly or quarterly. However, those periodic check-ins are often limited in scope, typically focused on comparing the previous cycle to the current one.

An end-of-year audit provides a chance to look at your business’s financial performance from a bigger perspective, looking at year-over-year comparisons and identifying trends within your company. It’s also a great time to set financial goals for the year ahead based on historical data, which will help bring together your overall business strategy.

“I look at my P&L all the time to make sure I'm tracking what is coming in and going out,” shares Jen Sulak of Weirdo Weddings. “I start with income versus expenses as a priority, as this affects any projects, client work, or passion work I do throughout the year. I can assess monthly, quarterly, and annually to see where I have blank spots I need to fill in.”

Peterman notes that a financial audit can also reveal areas to cut costs. “If expenses are creeping up but income isn't keeping pace, it's time to reassess where the money's going,” he says. For example, if your paid ads haven’t performed well on a certain platform, you can reinvest in more advantageous channels.

In addition to profit-and-loss statements, you can find useful data from your business’s balance sheet, cash flow statement, payroll reports, and inventory management system.

Check in with your team

If you have a team, consider them your most valuable assets! In addition to the essential work they do, employees and contractors serve as brand ambassadors representing all your business has to offer. If your team members have opinions, you’ll want to hear them.

Angie Johnston of Sapphire Celebrations reveals that she starts her business audits by consulting with her team. “We keep a close eye on the morale and stress levels of our teams when evaluating what is and is not working for the business,” she says. “If the team is overtaxed, then the business will not see success in any long-term areas.”

“This is also the time that we start to speak to the team and see what their goals are for the next year,” Johnston adds. “We want to make sure that the team and the number of events are on the same page.”

Treat year-end planning as a chance to leave the office, take your team out for lunch, and discuss all the exciting ideas in store for the next year. You’ll gain meaningful insights from those who know and care about your business!

Reconsider your business boundaries

In some cases, “what isn’t working” is less about your operations and more about your clients. Maybe you’ve been targeting the wrong audience and attracting leads that don’t align with your values. Or, as Oduberg Law’s Leah Weinberg suggests, perhaps you haven’t set clear boundaries with your clients.

“Look at your pain points with clients over the last year,” she encourages. “If you were repeatedly dealing with the same issue (late payments, non-responsiveness, unrealistic expectations, etc.), spend some time figuring out how to address those issues.”

For example, if you regularly receive late-night phone calls, ask yourself whether you’ve established well-defined business hours with clients. If not, that’s something to add to your sales process and onboarding workflow going forward.

“Consider whether your current contract provisions need updating or if it would be appropriate to add new ones to address some of the concerns,” Weinberg says. “You can absolutely use your contracts with clients to create and enforce your boundaries and help things run more smoothly for your business.”

Updating your contract to set realistic expectations ensures every client agrees to the terms, providing legal backing when you need to reinforce boundaries. Consult with a legal professional to help with adjusting your contract to prevent ongoing concerns.

Use what you’ve learned this year as fuel for growth, turning setbacks into opportunities for improvement. When you take time to diagnose the issues holding back your business and develop a plan to resolve them, you will pave the way for a smooth and successful 2025. And as Sulak reminds business owners: “Don't forget to celebrate the wins as you go—these also keep you on track with your mission!”