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The Quintessential Small Business Mid-Year Review Guide (2024)

Updated: Jun 7

Did you know that almost half of all small businesses fail within the first five years of starting up?

Your first five years of business are imperative and represent your ability to survive long-term. There are several things that add up to the success of a business, and unfortunately, far too many small business owners wait too long to focus on some of these critical aspects. To make things a bit harder still, the core items for each business is often vastly different.

Small business coach out on a hike in the fall checking their map.

However, knowing how to administer a small business mid-year review is a vital way to ensure you don’t miss some of the smaller, yet powerful items. Trust us, we get it. There’s already little time in the day as is. But no matter how tired or busy you think you are, setting aside time to hold a review can be a massive part of achieving your financial goals.

Although it can seem overwhelming, any big project can feel much more doable when breaking it up into small chunks. Here's a simple, actionable small business guide to help you understand how to conduct a business review.


The Basics on Why You Should Conduct a Small Business Mid-Year Review

Small Business owner taking a moment to check their heading using a compass and map at a retreat.
Taking a Moment to Review

As per usual, let’s start with the basics first. What exactly do we have in mind when we are talking about a mid-year review anyways? The review itself can be varying based on your specific small business, but the essence of every review should be the same: to gauge where your business is relative to the goals you set at the beginning of the year as well as your rolling 5, 10, 15-year plans.

The most effective small business reviews integrate planning, adapting, organizing, and leading. That’s a touch generalized, but that’s what we are here for. The primary purpose, or “why”, of conduction this review is to give you the ability to realign your business throughout the year. Or to put it a bit more plainly, this is the built-in process that strips you of procrastination of fixing weaknesses or taking advantage of your strengths.

There are different kinds of business reviews that you can conduct, but the three most popular are a Goal Review, a Sales and Cash Flow Review, and a Comprehensive Review. Which one you choose really depends on your goals and often the type of business you’re operating. Also keep in mind that you can rotate these reviews on a set schedule or advance your timeline to be quarterly reviews so that all factors are considered throughout a year.

Three Most Common Small Business Review Types:

Goal Review:

The simple explanation: A Goal Review helps your company review its milestone goals, organize, and prioritize action items, and create new business initiatives.

Young woman standing on a bridge checking the map

However, the obvious key to a goal review… is to already have defined your goals for a given period. It is not uncommon for a small business to skip that critical step. As business advisors, we can assure you that setting goals is one of our most common “issues” we help clients overcome.

Sales and Cash Flow Review:

The simple explanation: A Sales and Cash Flow Review updates your financial status, reviews customer account plans, and analyzes your overall economic progress.

Typically, with this type of review your primary objective is to track down any disruptions in your cash flows or financial policies. If you’re conducting the review primarily for the sales side, you’ll most likely be looking for breakdowns in the sales process and/or effectiveness of your sales team.

Comprehensive Review:

Lastly, as the name suggests, a Comprehensive Review goes over and updates your business’ strategic plan for every area of your business.

However, you must avoid the trap of reviewing literally everything in your business. In terms of a mid-year comprehensive review, the goal is to make sure that you cover all your critical items for your specific business. An easier way of thinking about it is this is a review of your basic overall goals.


Your Simple Guide to Conducting a Productive Mid-year Review

We are crafting this guide to give you a starting block on which to build your regular reviews. We have chosen the areas that will have the most impact for a small and/or locally owned business. Our client base is almost exclusively small business owners. This guide covers the subjects that we focus on when working with a client’s review process.

1. Evaluate Employee Performance and Share Feedback

Although this part of a review possibly brings up some negative emotions, it's essential to formally sit down with your employees separately and evaluate their performance. Unlike an annual review that reflects on their entire year, a mid-year performance review only focuses on the last two business quarters of their work. While that might be self-explanatory on the surface, the purpose here is to give them, and therefore you, an opportunity to correct any issues “now” rather than later.

4 man crew boat rowing in smooth waters.

While it isn’t technically required, having an objective employee scorecard already in place makes this step significantly easier and more effective. If you need to craft one here is the short and simple. An employee scorecard should resemble your own KPI tracking except on an employee scale. Have a handful of objective measures along with unique goals for each employee. Think: average sales calls per day, Work Orders completed per week, Number of times late to work, etc.

It's also helpful if they can measure their own performance. By having them fill out a performance self-assessment, you can better grasp their strengths, goals, and areas of weakness where they need to improve from their perspective. This will make your employees think critically about what they need to do to grow. Plus, it has the added benefit of empowering them to control their own success within the business to some degree.

The setting aside time to share with your employees how much you appreciate their contributions to your company's success is essential. It's also a great time to give them constructive criticism on how they can better help the team and improve their skills.

However, it is very important to try to remain as positive as possible when sharing constructive feedback. Focus on the facts instead of feelings and concentrate on the future as you speak with them honestly. Giving constructive feedback is a delicate balance to walk, so make sure to review your feedback skills before the meeting.

2. Assess Your Cash Flow’s General Health

Coffee Shop business owner standing in front of his production area
Tight Margins Require a Close Eye

It goes without saying that your cash flow is a critical aspect of your business. Yet many companies, mostly small businesses, often have an "out of sight, out of mind" approach. They may even just leave it to an accountant to update them on how they're doing.

It's vital to be able to assess your revenue and cash flow yourself. By having your fingers on the pulse of your cash flows or at the very least having a solid understanding of your cash flow systems empowers you to identify faults in the moment. Not to mention the risks that you are placing your business in by being reliant on a singular or external resource.

An example of a system you can follow is Mike Michalowicz's Profit First System. We have not personally vetted this system, but from what we heard it’s reliable. But there are many like it and if you’re proactively monitoring or engaging in a process for your cash flows, you’re likely one step ahead of your competition.

Business debit card laying on the keyboard of a laptop

Frustratingly (as a business coach), most entrepreneurs often check their bank balances and make decisions simply based on what they see. In fact, we have had multiple clients over the years where their primary expense strategy was something along the lines of “Do we have money in the bank? Ok then I’ll buy XYZ.” They never took a second thought to dive in and analyze if they balance was representative of their operations. Think something along the lines of an auto-payment for rent coming up. Yes, technically on THAT day there was money in the bank, but strategically speaking it was already spent.

By conducting a regular review of your cash flows and policies surrounding them, it forces you to have the proper perspective on spending, investment, and revenues. You can closely monitor how your revenue and profits are doing and if you are on track to reach your targets. It empowers business owners to take control of their cash flow.

3. Conduct an Expenses Analysis

While you're analyzing your financials, it's also a good time to do an expenses analysis. Two ways to help relieve a profitability problem are increasing sales and cutting expenses. Since increasing sales often comes with the added customer acquisition costs, that means cutting expenses is usually faster and easier.

To execute an expense review, start with running your P & L for the past six months. Then go through every expense line item with the idea of pulling out any expenses and placing them within generalized categories. You’ll want to tailor it to your business specifically, but think something along the lines of:

Small business owner taking money out of his wallet in order to pay his lunch bill.
Philosophical: Cash Leaving or Entering the Wallet?

1. Required:

This is where you’ll put mostly your overhead items such as rent, licenses, etc.

2. Variable:

Variable expenses are items like fuel, power, or service use items (ex: shop towels)

3. Optional:

These might be items like training, subscriptions, or other memberships

One note: Just because you place a line item under “required” does not absolutely mean that it is technically required. Make sure that you think outside the box when reviewing your expenses. Tackle each type the same and look for ways to cut throughout.

The final thing to do for an effective expense review is to go through the line items and find ways to save. Everything labeled optional can be low hanging fruits, but often the biggest gains are made in the least expected areas.

A solid, simple example would be to review your internet, phone, or IT services and shop them out regularly. We applaud loyalty when it comes to suppliers and vendors but paying 20-50% more for the same service just isn’t worth it. You can always stay loyal but use your findings to renegotiate with your preferred vendor anyways.

4. Review Your Marketing Strategy and ROI

I can say without a doubt, this is where small business owners need to put a solid majority of their efforts when reviewing their business. Let’s face it, unless your small business is a marketing firm then your strong suit is not marketing. Early on you made choices that maximized your success. Things like building your own website etc. However, that’s precisely why you need to be conducting a review. If you’re on year 3, it’s likely time to hire a professional.

Cheap Marque sign for lobster at a local fish market
Is Bare Minimum Enough?

Therefore, this is an excellent time to review and evaluate the different marketing methods you use. Is your company using the most effective avenues to reach prospective clients and customers? Are your media items (print, web, email) wildly out of date or could use a fresh coat of paint?

Ask yourself questions to dig deep. Are you using Google or Facebook ads? Are you taking advantage of an SEO or social media agency? Are they working? How are you tracking your results? What's your ROI?

If you don't see clear and measurable results from your marketing efforts, it might be time to reallocate your resources into new approaches or different services. A very common example is with service businesses buying advertising in local papers or print media. Often even the entry costs are significant, while also producing minimal results.

Glacier Point sign overlooking a national park.
Your product might sell itself, but don't count on it.

Moving a $3,000 per month print ad budget over into something like SEO or Google ads is almost always a no brainer.

Take time to research strategies that you haven't implemented. See what competitors are doing and what innovative methods others use. Although it can be overwhelming trying to sift through what seems like a never-ending ocean of marketing strategies, choose one thing you can do and take a small step every day.

5. Discover and Address the Roadblocks

It's also necessary to assess roadblocks affecting you personally, your business, or your employees. Roadblocks can present themselves in many forms. Make sure you keep an open mind while scouring your business for potential handicaps. Things like governmental regulation are easy to see, but interpersonal or psychological ones are much harder to spot.

The Business Owner Personally:

Just about any business owner has a handful of items at any given time that they know they should be doing, but always seems to find a reason to avoid. Writing blogs such as the one you are reading now would be an excellent example of a roadblock.

picture of a business coach's blog writing setup at a local coffee shop

Make sure you review each literal task / item, like writing blogs, but also make sure you dive into the personal motivation behind the roadblock. To use myself as a guinea pig: the primary roadblock for blog creation is that in my youth writing was never my strong suit; therefore, I have a natural resistance. To be a bit trite, that’s not a good enough excuse… which is why I am overcoming the roadblock to type out this blog now.

Make sure that while assessing your potential personal resistances, also weighing out the solutions to overcome them. Implement a plan for the second half of the year to begin tearing down any barriers.

For the Business Owner Functionally:

Adding in a quick section here to help parse out that the functional side of things do not constitute a personal roadblock. ALL small business owners wear multiple hats. The stereotypical misstep here is claiming being busy is a functional roadblock.

While that is often true, you need be diligent in separating what is legitimate and what could be a personality quirk. Dive in deep and see if your busy schedule is not influenced by personality items such as control, procrastination, or inefficiencies of your own control etc.

For the Business Itself:

Since this is the meat and potatoes of roadblocks, we will only give an example of two for brevity. But we will aim to craft the concept so you can execute on your own. The three main areas you’ll want to focus on are External, Internal, and Environmental.

Business advisor hiking a path high up in the mountains overlooking a river.
Take a Moment for Yourself Too


Your goal when looking for external roadblocks, with respect to your mid-year review, is to identify any changes that are hindering your success externally. These include items like a new competitor entering the market, a supplier dropping out of the market which limits supplies, or competitive price changes.


The most opportunities hide within this set of roadblocks. Mostly due to the fact that they can encompass and enormous number of areas within your business. With that in mind, you might want to consider prioritizing a few each review instead of trying to tackle them all at once.

Your best bet for sniffing out these roadblocks is to simply engage with your employees. Those “opinion” boxes were popular for a reason. However, do NOT resort to such an antiquated process. Instead, proactively ask them if any obstacles such as inefficient policies or workplace conflicts are interfering with meeting their goals. This can help you understand how to make their day-to-day more efficient.

Small shopping area that is covered in snow at night
Some things are out of our control.

Doing this has a two-pronged benefit. Not only will it make your company run smoother, but it will help retain your best employees by showing them that you care about their daily experience at the company. The personal touch is really what can set you apart and empower your review process.


Environmental roadblocks consist of things like governmental regulations or a more literal application such as weather impact. Generally speaking, our ability as small business owners is often limited here. It's not like we can politely ask the government or mother nature to back off.

6. Review and Adjust Your Goals

It can be hard to believe we're halfway through the year already. And if there's anything that the past few years have taught us, it's that things can change incredibly quickly.

A persons goal notebook with a cup of coffee and a watch on a table
Coffee... Always Coffee

Even though we set goals for ourselves and our employees for the coming year, it's impossible to know what might happen next (like a pandemic). Always be prepared to pivot and update your company's goals.

Create a plan to improve performance issues as they arise — not just at formal performance reviews. When you, the business, or an employee haven't been meeting their goals, take time to reassess, set new goals, and put together an improvement plan.

The Business Level View:

A team of climbers trekking a mountain peak
Some Goals Are Crazier Than Others

Looking from the top level, make sure you review each of the primary goals you set for the business at the turn of the year. While you’re at it, this is the perfect time to do a deep dive in your business’ KPI’s.

Depending on the type of goal, subjective or objective, determine where you “should” be at this point in the year. Make sure you consider any seasonality and craft a projection for the rest of the year if needed. For example, if you’re a retail business, much of your business may not have occurred until the holiday season.

The Employee Level View:

Two employees of a small business cheering by a lake for their accomplishments
Celebrate Together, Succeed Together

As part of your normal operational policy, you should be setting individual goals for every employee within your business, even yourself. It is extremely important that these goals be measurable and have as little subjective nature to them as possible. Subjective goals can be a leech upon your company’s morale. We recommend that you follow the SMART Goal process.

Guide your employees with compassion while holding them accountable for their actions. You never know what issues they could be dealing with outside of work. By creating a realistic and sustainable improvement plan by opening clear communication and expectations, you can ensure that you're both on the same page.

7. Prioritize Your Discoveries and Plan for Change

Simply going through the process of conducting a business review should be illuminating on several aspects of your business. It can help you clarify your goals and weaknesses and make you more intentional about making changes. Make sure you write these changes down and create action steps to move you closer to your new goals.

a team of navigators planning their next route using a map and notes
Plan a Change in Direction if Needed

Don't overwhelm yourself, though. Limit yourself to two or three changes. Choosing which items to tackle first requires you to prioritize appropriately. The traditional way of doing things is to tackle only those with the most impact first. However, we suggest you break the mold and instead focus on the easiest items first. Get some successes under your belt and then dive in to one of the bigger items.

Here are some questions that can help you facilitate action steps are:

What can I do about this obstacle? How will initiate change? When am I going to do it? Who are the key persons involved? How can I garner buy-in? How will I keep myself accountable?


Key Takeaways

Plan for the future and leave room for change. After you conduct your mid-year review, pat yourself on the back and make sure you give yourself some downtime to prepare for the coming business quarter.

However, that's just the tip of the iceberg when it comes to conducting a small business mid-year review. Just from reading this article, you can probably already tell how illuminating a proper review can be.

Uncovering and distinguishing roadblocks and clarifying your goals can play a crucial role in helping your business and employees grow.

If you're ready to take your business to the next level, it might be time to investigate hiring a business advisor. Bringing in a partner with a fresh pair of eyes and some of the best minds in the business can help you develop a customized strategy that skyrockets your business and reduce stress.

Come and see how our growth experts can help your business succeed today!

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