When preparing to pay taxes, owners are often faced with hard numbers that signify the health of their business. Stagnant or declining profits are obvious indicators that trouble is on the horizon, but even if profits are rising, there is always room for improvement.

Smart financial planning is the key to success. Here are a few steps you can take to get on the road to improved profitability.

Evaluate Your Business Finances

In order to evaluate your finances, you will need to ask yourself some tough questions. How satisfied are you with the status quo of your business? Are you happy with your profitability or did you expect more? Were there missed opportunities or outside forces that influenced your profitability negatively? Could you have done anything about that? If you were to sell your business now, would you get a fair return based on what you’ve invested in effort and money?

If your answers to these questions leave you more dissatisfied than pleased, then it’s time to act. Start by envisioning the next year as the greatest 12 months in the history of your business and then trying to figure out how to get there.

Assess Your Profitability

To assess your company’s finances, begin by honestly gauging your current performance. Rate your profitability on a scale of 1 to 10. If you have adequate working capital, long-term employees and customers, consistent growth in revenues and profit, give yourself a 10!

Of course, it’s more likely that you will rate yourself somewhere between 5 and 8. If you rate your business a 6, this means your company isn’t tapping into the fullest extent of its profit-generating capacity. Even if you improved by one notch, profits will increase.

Identify Areas to Improve

Reach out to customers and employees for feedback and ideas to improve profitability. Employees are on the front-lines and know what customers like and dislike. The customers themselves know your company’s strengths and weaknesses.

For example, when the American auto industry was taking its biggest hits from foreign imports, one of the top manufacturers experienced significant customer complaints about poor paint jobs. An upper-level executive visited the paint shop in one of its factories and asked an employee about the source of the problem. The worker replied, “I thought you’d never ask,” and explained in detail what was wrong and how to solve it.

Use a Financial Planning Service

Business financial planning can be difficult, especially when there are so many aspects of running a business. Hiring a professional financial planning service will enable you to efficiently assess your business and determine the best course of action.