What’s the State of Your Business?

Liz Belcher on delivering a "state of the company" addressBy Liz Belcher, CPA
Partner, Tax Services
Email Liz

January is when our political leaders deliver a “state of” speech, letting everyone know how we’re doing as a nation or state. As a business owner, you might consider the idea of giving a “state of the company” speech — an Accountability Report.

Consider a company-wide meeting in which leaders review the business’ 2023 performance and set department goals for 2024. The Sponsel team did this last month with our annual “firm retreat.” Seeing the whole team there in person encourages the idea that we’re all in this together, working toward a common goal. That can be hard for business teams to realize when employees are glued to their laptops or lost in the daily hustle and bustle. Joining everyone in taking a step back from the grind provides a clearer perspective of accomplishments and pain points.

Your Accountability Report should include financial and non-financial results. Many private businesses tend to keep most financial information confidential, for understandable reasons. But there should at least be some key performance indicators that you are able to share with your team.

By showing your employees you trust them, you have a much better chance of having that trust reciprocated. When workers have a sense of ownership in a business — a feeling that their actions have a direct impact on the collective success — they tend to be happier and more loyal. Although it’s not possible everywhere, an “open book” style of management is gaining in popularity.

Possible key metrics to review:

  • How well did the company do against plans, such as a budget?
  • How well did we do compared to previous years?
  • What internal or external factors influenced our financial performance?
  • How have we motivated our workforce?
  • How can we measure Employee Morale, and what can we do to boost it?

Here at Sponsel CPA Group, we conduct this kind of review twice a year, with the aforementioned firm retreat followed by a six-month update. We lay out our accomplishments and challenges with equal candor. And we make our expectations of team members clear.

By giving your employees a “state of the business address” to measure the organization’s yearly performance, they will have the sort of buy-in that is critical at times when they are expected to go above and beyond. In other words, they will better understand the stakes involved.

We find this is especially beneficial for younger employees. Younger Millennials and Gen Z employees have a deep desire to feel like they are part of something greater than themselves. They want to know that the company is moving forward in a way that is consistent with their vision of their professional life.

As CPAs, we help a lot of people with their end-of-year financial reporting. We know there are business owners who think they’re accountable only to third-party entities — banks, clients, investors, etc. We think these leaders are leaving out the most critical stakeholder to their success — employees!

Whether your results for 2023 were good or bad, share as much of that information as you can with your team. Knowing where you’ve been will help you build upon where you aim to go.

If we can assist you further with your business or personal financial affairs, please call us at (317) 608-6699 or email Liz.