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Year-End Business Assessment

A business assessment will allow you to identify strengths and areas for improvement, identify the business sectors that are worth emphasizing and those that are not, and at the same time, identify the factors that determine whether or not the company is worth more.


The end of each year is a time to reflect on what has been experienced during the last twelve months at a personal, professional, and business level.

Taking stock at the end of the year is essential as it allows the businessperson to validate the things that worked well in terms of production, customer service, and economic/financial aspects. It is important for managers to evaluate the effectiveness of certain strategies, products, marketing campaigns, etc.; to reflect on the management of human resources and, above all, because it allows them to detect areas of opportunity.

You may be wondering why it is important to evaluate the different variables of business management. One of the main reasons is the impact that your management style can have on the internal processes of the administration of your business, especially on the employees on whom the business depends.

Did you know that many people are not committed to work and only do it out of necessity?  According to a recent Gallup report on the state of the workplace, only 33% of employees are engaged at work. This shows the importance of reflecting and planning the necessary changes for the coming year to increase engagement.

A year-end review for the company is beneficial. It helps to determine what has worked or can be improved, which implies better decision-making in the future. Progress or setbacks can be appreciated, and circles that could become problems the following year can be closed. In other words, it is the basis for determining the objectives to be achieved in the following twelve months. Therefore, it is not just a matter of reviewing but of reviewing in depth to determine key learnings and results.

The important thing is to do it because what you will get will be a lot of valuable material to reflect on your achievements, the basis for designing your next cycle, and to put on the table the issues that were left pending.

Great Entrepreneurs Do It

Although most managers make this review a habit, different approaches can be adapted to suit the needs of each company. Some start by looking at the KPIs achieved, while others do the review more frequently throughout the year.

Some Forbes business council members give the key to starting to implement an effective year-end review process:

Nuala Walsh, the founder, and president of MindEquity Consulting, expresses that an underappreciated pitfall of the year-end review is the tendency to evaluate progress based solely on the results achieved and not on how they were achieved and how they fit with a long-term strategy. Adam Coffey, CEO of Advisory Guru, LLC, says that in the face of unforeseen global events such as Covid-19 that caused disruptions in many companies and supply chains, it is necessary to reevaluate lessons learned to make the necessary adjustments for the following year.

For her part, Tiffany Gaines, founder, and president of SS Global Entertainment, asserts that analyzing a business's overall financial summary allows one to review its cash flow balance, working capital, and position in terms of any outstanding lines of credit or loans. He says a good starting point is to update the company's original business plan. In turn, Johnny Marines, Director of Johnny Marines Enterprises, states that every year-end, he holds a meeting with partners and employees to discuss the pros and cons of the business operations during the year ending and agree on a course of action for the following year.

Tej Brahmbhatt, an Investment Partner at Watchtower Capital, believes that annual audits ensure adaptability and agility. He says the easiest way to start is to analyze non-revenue-generating lines, such as liabilities, to automate and simplify or eliminate inefficient processes to reduce costs and or time. The idea, she says, is to promote high-performing behaviors and results and minimize underperforming ones. Similarly, entrepreneur Tammy Sons, president of Tn Vivero, says that as tax time approaches, she performs a full-scale evaluation of all aspects of her business to not only prepare for taxes but to determine areas where she can reduce expenses.

Finally, Kerry Siggins, CEO of StoneAge, explains that at the end of the year, they do something called "reflecting forward": they analyze overall performance, execution of their strategy, and achievements and failures to incorporate what they learn into goals, KPIs, and the overall plan for the coming year. "It's beneficial to reflect forward because it's a positive process that fosters a growth mindset and allows you to talk about mistakes with confidence."

How to do it? Preliminary Steps

The company's year-end balance sheet cannot be done individually. It is necessary to involve the partners, the management team, and senior executives in the company's different areas. It is a session that can take up to a day of work in which thoughts and experiences are exchanged in search of answers to the fundamental questions of the evaluation.

It is normal that when announcing an evaluation session, some of the executives summoned may feel some concern about their performance within the company, or they may not be entirely clear about the expectations of their participation in the session.

For this reason, it is advisable to follow some preliminary recommendations.

You should let participants know exactly what is expected of them and how performance will be measured based on the objectives planned at the beginning of the year. Also, be clear about the performance objectives that are so that they can be assessed against the evaluation results.

It will also be important for the review process to document all the comments that arise, adding the CEO's or president's insights to achieve a complete picture. To this end, you should consider feedback from people outside the company (mainly suppliers and customers); this will give you a 360° view, as managers can often have an isolated, one-dimensional perspective on business performance.

A 360° feedback provides a greater understanding beyond the scope of the individual perspective. Feedback from co-workers or customers provides insight into the true character and performance of employees, which can be extremely useful when it comes to coaching and evaluating your team.

Another factor that you will have to take into account is your performance as a manager. That is, you will be exposed, if you act honestly, to be questioned or criticized about the way you have managed the administration of the company. This will allow you to detect areas of opportunity that you can share during the subsequent year-end evaluation.

This implies thinking about how you have interacted in all areas of the organization, particularly with the employees. Therefore, be ready to assume the things in which your performance has not been the one that corresponds to a fully effective executive.

Remember that the secret to effective meetings is a solid framework to guide the discussion most effectively. An hour or two is not enough to discuss an entire year's performance. This will involve designing an effective meeting structure to make the most of the time devoted to the review session. Propose an agenda that organizes the discussion, prioritizing the most critical topics.

Although every job and organization is different, effective meetings consist of three main transferable components: Prepare in advance, have a meeting secretary to document and lead the discussion, and don't forget the context (in this case, it would be the performance review).

Another factor to keep in mind is that you will need to be assertive during the appraisal. Most employees will want to know what they have done well and be recognized for it. However, it will be important to point out, in an assertive and non-confrontational manner, what could be improved individually and collectively. Providing constructive feedback is the best way to communicate with employees. Although such a conversation can be difficult, it helps to grow and develop team members in the long run.

Once the performance appraisal is complete, it will be important to discuss what comes next. Most performance management sessions should focus on how team members can continue to grow and maximize their value to the organization.  It is essential to know their strengths and help them discover how they can best apply them in their role.

As a result of the assessment session, the organization's goals and priorities are likely to change.  This may mean that team members' objectives will also need to change.  It will be important to ensure that team members are aligned with the most current and urgent priorities.

Which Variables to Evaluate

One question that first-time managers often ask when they conduct an annual evaluation is how do you know what aspects of your company to examine?

A group of Business Journals Leadership Trust members, a networking community for business owners and executives, defined what criteria they always carefully review during their year-end company evaluations. The most important are as follows:


Review the achievement of objectives set for the year and those set for the long term. If progress on these objectives is not tracked, success is less likely.

Company processes

Richard McCree, president of McCree Inc., a general contractor and architectural firm, explains that they have a 10-step design-build process called "From Concept to Keys. The team has to demonstrate exceptional service and quality at every step of the process, and even when they get it right, they are always looking for ways to improve and provide more value.


Determine what to retain. Customer retention is the most important, followed by employee retention. But there are other essential retention measures, so it pays to keep an eye on and safeguard everything that works.

Objectives of Collaborators

It is important to talk about how each employee's goals are part of the company's bigger picture, so they should be aware that their goals are an integral part of the company's goals and success.

Cultural adequacy

No matter how good someone looks on paper, they need to be aligned with the company's culture and vision to be effective. It is important to evaluate how well the personal culture of employees is aligned collaboratively and regularly with the company's objectives.

Critical functions

It is important to assess employees' talent in critical functions to determine whether the current team is strong enough to meet business objectives.

Employee compliance

Employees are the key element to a company's success. Valuing their level of fulfillment involves assessing the work environment determining the level of well-being and cooperation of employees, and factors such as growth opportunities and the right tools and technology to do their job well.

Customer ratings

Customers are the final destination of a company's products or services. It is necessary to obtain their valuation since it is a good indicator of the company's performance, especially in service industries such as the hotel industry. Based on this valuation, the necessary measures will be taken to improve the areas that require it.

What to Ask to Assess

We said in the first steps for the evaluation that this is a session in which thoughts and lived situations will be exchanged in search of answers to the fundamental questions of the evaluation.

What might these questions be? Here are some examples:

1. What did we achieve this year?

Not just in terms of revenues or profits. Ask yourself the following questions: what important projects did we execute? What strategic initiatives did we successfully launch? Did we enter new and profitable markets? Did we launch new products? Which of everything we did deserves a good celebration?

On the other hand, it is also worth evaluating the company's mission, vision, and values: How much progress was made on the mission, to what extent did we realize the vision, and did we live up to the company's values?

The things you would celebrate now can help you determine what you should focus on in the future. Take the opportunity to document and acknowledge achievements and use them as inspiration and guidance as you develop your plans for the coming year.

2. What did we do well, and what didn't we do well?

Ask yourself what worked so you can use what you learned to make iterative improvements to the business. Which of your objectives did you achieve? Were they realistic or too aggressive? Are there specific reasons why some things went right and others went wrong? What were the keys to success in certain areas and activities? Was it the right strategy, the right resources, a stroke of luck, or something else? Did market changes alter your original plans?

3. What made the difference?

As you conduct your year-end review, you will discover that some activities and initiatives made a real difference, and others did not. To get to the heart of the matter, ask yourself: Has a new product been successful and generated unexpected revenue? What enabled that success? Was there something different in the way the product was developed and launched? Was market need or demand greater than anticipated? Has a particular marketing channel driven much of the new opportunities and growth? Why was that channel so successful? How is it different from the other channels used, and what might it mean for the coming year?

4. What are our mission, vision, and values?

Many companies establish a mission, vision, and values but need to live by them. Often, these objectives get lost in the daily grind of meeting targets, getting metrics, and getting the job done. When conducting your annual review, ask yourself: When was the last time I reviewed the mission, vision, and values, and how often have I reviewed their fulfillment?

5. Who do we serve?

Consider what your company means to customers. These questions can help you: Did we help customers? Did we solve their problems and address their pain points? Did we deliver what we promised? Keeping the customer in mind helps to move away from insular thinking and purely organizational concerns. It helps to keep your feet on the ground to maintain a customer-centric approach.

6. What was my company's situation when the year began?

Consider where you were in January of this year, what you were struggling with in your business, what your services and programs were like, how you were serving your customers, and how you felt about your business.

7. What is the current status of my business?

Describe where you are today and how your business has evolved since January of this year.

8. What has been my biggest learnings in my business this year?

What moments did you realize about yourself as an entrepreneur or your business?

9. What were the key pivots I made in my business this year, and what were the results of those pivots?

Pivots are often the result of key learnings, so think about the changes you made as a result of what happened in the previous question.

10. What business activities have I enjoyed the most this year?

It is very beneficial to understand what things we like to do in our business so that we can create the conditions to do more of these things. What did you have the most fun doing this year?

11. Where have I pushed myself the most this year in my business? What things did I decide to do even though they pushed me beyond my comfort zone?

Getting out of your comfort zone is key to your growth and business. Point out those moments when you struggled.

12. How do I feel about the state of my company now? How do I feel about the future of my company?

How you feel about your company speaks volumes. Do you feel energized or exhausted? Are you excited about your new direction, or are you fearful? What are these feelings telling you?

13. What do I need to let go of this year to enter the new one with a fresh slate?

When you are willing to look at what you have learned, you can let go of the experiences and enter the new year with a sense of lightness and positivity about your business.

In Summary

A business assessment will allow you to identify strengths and areas for improvement, identify the business sectors that are worth emphasizing and those that are not, and at the same time, identify the factors that determine whether or not the company is worth more.

This exercise will allow you to detect the need not to improve the documentation or update manual processes, procedures, and operations, as well as the convenience of selling or getting rid of unproductive assets or obsolete inventories.

Evaluating a company's performance is key to its good function and organization to prevent it from losing its direction and, therefore, the pursuit of its objectives and efficiency in production. The evaluation allows focusing efforts toward productivity, competitiveness, effectiveness, and growth of any objective.

That is why it is worth taking the time to carry it out in depth.

Pedro is known for his ability to simplify complexity, identify inefficiencies, connect dots, and imagine ideas that drive meaningful outcomes. He is an internationally recognized thought leader, seasoned entrepreneur, battle-tested coach, and sought-after keynote speaker on business strategy, growth, technology, and innovation. Book Pedro here event.
Key Performance Indicators (KPIs)EntrepreneurshipEntrepreneurs & IntrapreneursAccountabilityAdaptabilityRisk Assessment

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Pedro helps individuals & organisations thrive. He simplifies complexity, identifies inefficiencies, connects dots & imagines ideas that drive meaningful outcomes.