H2 planning for small businesses: Essential strategies and tips for year-end success

The second half of the year is here. Are you ready to finish it out strong? Small business owners often do a mental pivot in their minds as the year gets to this point, thinking about meeting end-of-year goals and setting themselves up for a great following year. Keep reading for tips for the second half of the year for your business.

Understanding H2 planning

📌 H2 planning is a strategic concept that encourages businesses to get ready for the second half of the fiscal year (H1 = January to June, H2 = July to December). Small businesses are encouraged to adopt H2 planning for many reasons.

For starters, H2 planning will let you determine if you are able to meet the current goals of the business. Now that July has rolled around, do you feel confident that your business can achieve the original or current goals and objectives by the end of December? If you need a comprehensive set of actions to help you understand what to do to achieve your annual goals, undertaking an H2 plan is crucial.  

The plan will help you break down annual objectives and help you focus on what processes need to be put in place in order to achieve them. Also, because H2 planning takes place in the middle of the year, you can fine-tune your end-of-year business targets at this point. Using data collected from the first half of the year on the performance of your business will aid in planning for H2 more efficiently as you have information at your fingertips to fine-tune goals or readjust, if necessary, based on H1 trends.  

Second, H2 planning will assist your business in resource allocation. Material, money, machinery, man-hours, and management are all business priorities and critical to your business operations. However, the business environment and its needs change.  

H2 planning will help you refocus and reprioritize your resource allocation. In other words, it will determine how the business can prioritize its resources, time, and money to promote one project over another.

Third, the H2 plan will allow your business to address or prepare for changes in the business operating environment. How is a new transaction processing system affecting your business? Have you developed new products or services since the start of the year, and if so, how are customers reacting to them? Are some of your competitors no longer in the space, or have new competitors entered the market? These are activities to adjust to now rather than later, when they could take resources away from other initiatives.

The above points highlight the need to become aware of your business's current status – which can change regularly – making it necessary to realign priorities and adjust goals.  

6 Key business strategies for the second half of the year

When it comes to transforming your trajectory, the midpoint of the year is the perfect time to review and revise your business goals—by category. Let's delve a little deeper:  

1. Review your performance metrics year-to-date. This sounds like a "Duh!" statement, but you'd be surprised how easy it can be to avoid or forget this step. Pull together all your key performance indicators (KPIs) related to your sales. Find out how many new customers you've been able to garner. Discover how much growth you've been able to achieve. Are all your numbers adding up the way you intended? Why or why not? You may have factored in additional sales from something that has far exceeded your initial expectations. Woo-hoo! (More on why this is important in another section.) Or maybe it's because the product creation process for something is taking longer than expected. 
    
2. Revise your business goals. By this point, we've taken some time to reflect (in the previous section). It's now time to make any necessary adjustments based on your learnings and/or any realities you can see on the horizon. If you set realistic goals but find, for example, that you've already exceeded your sales (that part of your business goal), set something even more ambitious. Maybe keep your original goal but push it aside as a subtext. Or, if you can see that you definitely won't be reaching a goal, set something that you think is a little more achievable. 
    
3. Update your financial planning. Review your budgets but do it in a strategic way. This means looking at everything from a new perspective. You want to focus on setting aside the right amount of resources for the particular things that will make a massive difference to your bottom line. (So, if you've found out that one particular campaign did well, give it a larger piece of the pie.) The review process means looking for patterns while reviewing your accounts and profit and loss statements, which you can complete with your bookkeeper or accountant. 
    
4. Stay on top of the sales season. We tend to work on marketing tactics all year round. And, before you know it, you'll be transitioning from summer promotions to indulging customers with news of your fall releases. If you sell a product that can potentially be sold as a gift during a national holiday, you'll want to promote ahead of time on social media (as planned on your social media content calendar). 
    
5. Maintain customer engagement. Stay consistent in communicating with your customers. This means planning to reach out to customers with new newsletters, crafting updates by text messages, creating new social media content and contests, and staying aware of social media trends.  
    
6. Check on your insurance coverage. According to the 2023 Hiscox Underinsurance Report, about 75% of small businesses are underinsured. Is your business one of them? If you've made changes to your business since purchasing your policy, now is a good time to take a look to make sure your business has the coverage it needs.

✔️ Checklist for end-of-year planning

The end of the year is a season of change, so it's important to plan well in advance to hit the ground running in the new year. The following comprehensive end-of-year planning checklist will help you ensure that you don't miss anything.

• Review and update business goals. Review the goals you set at the start of the year. Have you met, exceeded, or fallen short of those goals? How is your progress? With that in mind, set goals for the year ahead. Consider changes in the market, the overall direction of the industry, and where the company is in its lifecycle. 
   
• Perform a financial audit. Open your books and closely examine your finances. Are there any discrepancies, or does everything look fine? Explore potential opportunities for cost savings or system improvements and identify expense abuse or high expenditures. Keep these details handy for tax season. 
   
• Formulate a marketing campaign. Who will be your target market for the year? Prepare your marketing campaign strategy to outline how you will secure your sales for the following year. 
   
• Evaluate your team. Review your team and see how everyone is doing. Will anyone get a promotion next year? Based on your business strategy, how does everyone stack up? This information will help you formulate a training plan for the following year so you can maximize everyone's skill set. 
   
• Tax season prep. It's never too early to start gathering receipts, business expense forms, and bank statements to get your ducks in a row for tax season.  
   
• Review your inventory and supply chain. If you bought too much inventory and have yet to move units, it hasn't caught on. Now may be the time to cut your losses and dump the merchandise.  

📢 Related: Small business new year checklist

Final thoughts on H2 planning

💡✍ Think about second half planning from this perspective: Approach the remaining six months of H2 with a concrete blueprint for success. Without it, you will be scurrying at the end of the year. Or, worse yet, Q4 will wind down with everyone stating: "Bring on the new year. See you after the holidays!" and you won’t be ready for the new year. Don't be that organization. Don't be that business. Make a plan and set yourself up for success – all year round!