Getting the most out of a mid-year review

Research compiled by the University of Applied Sciences in Germany in 2016 has shown that only 20% – 30% of small and medium enterprises (SMEs) in South Africa survive longer than five years. In addition, the research found that the common trait distinguishing a successful business from a failing business is its owner’s ability to adopt a proactive approach to running the business and to accurately execute plans.

A lot of successful small business owners understand the importance of conducting a detailed annual review, which includes reviewing past performance and potential opportunities for the business, setting expansion goals, identifying financial targets and assessing the overall health of the business. It must be said though, that one of the biggest mistakes that an entrepreneur can make is to believe that one review is enough to keep a business on course for an entire year.

With the middle of the year around the corner it is the ideal time for business owners to conduct a mid-year review.

The primary function of the mid-year review is to assess the business’s progress against its annual goals, as no good comes from waiting until year end to determine whether the business has managed to reach its targets.

Examining provisional sales figures, evaluating recent successes and failures and measuring staff performance during a mid-year review will help the entrepreneur to intercept problems early on as well as identify opportunities that may disappear by the time that the annual review arrives.

Lastly, there is no better way to boost employee motivation than a mid-year revision of their personal goals, performance assessment and recognition of their successes over the previous six months.

To ensure that the maximum value is extracted from a mid-year review a top-to-bottom examination of the business is necessary while following a detailed checklist to help stay on course.

The checklist of the ideal mid-year review

In order to get the most out of mid-year reviews, the business owner should ensure that five vital bases are covered:

  1. The first thing to review should always be finances. Organising financial documents both digitally and physically as part of a mid-year review prevents surprises, losing information and many wasted man-hours in last minute filing when the end of the year arrives.

    Naturally, this is also the time to review the business’s financial goals, specifically whether targets are being met and identifying how losses can be recovered as quickly as possible.

  1. Next on the list is an in-depth evaluation of the entity’s legal and tax positions. Ignorance is not a viable defence against legal or tax non-compliance, which is why the business owner needs to make sure that the business is still in the best possible position.

    Ensure that taxes are up to date, the necessary paperwork is in order and that there have been no regulatory changes that could impact the business in future. This is also the time to review client and service provider contracts to make sure that the agreements are still enforceable and up to date.

  1. A mid-year audit of the company’s marketing strategy can help the entrepreneur to keep business numbers up throughout the year. It is important to conduct a website audit to ensure that all the information on the various pages are still in order and up to date. This step should also include customer check-ins and quick social media audits.

    Being proactive in this regard also requires the business owner to conduct a formal update on what the competition is currently doing. A new disrupting product or service launch by a rival business can hurt both market share and revenue. In addition to identifying upcoming challenges, business owners may come across good ideas to incorporate into the business.

  1. The fourth item on the list is an examination of the company’s risk management measures and to check that the company’s disaster recovery plan is still relevant. If the risk of protest actions or weather related perils seem to have increased in recent months, the business interruption and recovery plan should be revisited as a point of priority.

Past winner catch-up – where are they now?

2018 marks our 30th year in honouring entrepreneurs and the contributions they make toward growing the South African economy. We’re celebrating this milestone by catching up with some of the past winners of the competition.

Catching up with: Kim Whitaker

Winning year: Emerging Entrepreneur of the Year® – 2015

Winning business: Once in Cape Town is a combined product of two different accommodation types – a backpackers’ lodge and a luxury hotel – globally dubbed as a ‘poshtel’.

It’s been almost 3 years since you won the Emerging Entrepreneur of the Year® title in 2015, how has business been since then?

Business has been very good – we’ve grown year-on-year and even achieved some goals that we had set out back when we started our journey.

Shortly after winning the title in 2015, we were fortunate enough to realise one of our big dreams – expansion into Gauteng with “Once in Jo’Burg” in 2016. It has been incredibly exciting to watch the new branch grow from strength to strength.

Since the 2015 competition, I also became a parent and being a working-mom has now brought a few new challenges to my life – such as needing to travel and attend business meetings with my child (even to Germany for a trade show!).

Have you made any new developments within your business since winning?

We very recently launched a tourism academy for young women in the tourism industry. The academy will begin in May 2018 with 20 students initially – taking them through the basics of tourism management. We hope this will empower these young women to forge long and successful careers within the local tourism industry.

Eventually we hope to grow the academy to host up to 100 students per year. We want to be a driver of growth in our sector and contribute toward bolstering youth employment in our country.
We were also recently awarded our Fair Trade stamp after a thorough audit – achieving a 100% pass rate which we’re very proud of.

What was the biggest lesson you learnt from your stint in the EOY competition?

The competition was an eye-opener. Bearing witness to the innovative things others are doing reminded me to always put my best foot forward, and to be proud of our achievements.

The entire experience was exceptionally inspirational. I was able to meet and learn from so many like-minded entrepreneurs who have amazing businesses. In turn, this has led me to discover a personal passion for networking with other local entrepreneurs and for investigating the entrepreneurial landscape in South Africa. I am eager to be more involved in helping others discover their entrepreneurial talents and seeing how we, collectively, can grow our country.

What would your top piece of advice be for anyone looking to enter this year’s competition?

I think the biggest, and possibly the most important piece of advice I could offer other entrepreneurs looking to enter the competition would be to be themselves completely. Don’t be something you’re not – you should be proud of your business, and your uniqueness. Be proud to fit outside the box. Most importantly – know your business inside and out – and don’t be shy to show it off.