How to Make a Fresh Financial Start: Solo's Guide to New Year Planning

While “new year, new finances” probably doesn’t top your list of new year mantras, it’s an undeniably helpful mindset to have as a solo business owner.

The end of the year (or the beginning of a brand new one) is the perfect time to step back, take a hard look at your business’s financial management, and find ways you can be even better in the months ahead.

Not sure where to start? This guide breaks down a few simple steps you can use to get your business-of-one’s finances in check and kick off the brand new year with a new outlook (and maybe even a new system). 

Step 1: Look Back at Last Year

Before you can look forward, it’s helpful to look back. So, start by reviewing all of your information from last year. You’ll want to look at two different (but related) things:

• Your numbers: How was your business’s financial performance? How much did you pay in taxes? What were your total expenses? Are those numbers higher or lower than you thought?
• Your systems: How did you feel about your ability to stay on top of your accounting? Was it manageable or overwhelming? Did you miss any tax deadlines or other important due dates?

Evaluating both gives you a more holistic view of your solo business’s finances and accounting, so you can identify the most meaningful areas to improve this coming year.

Another thing you’ll want to consider as you do this reflection? Your business structure. Your business entity has a major impact on nearly every aspect of your business—from your level of protection to how much you pay in taxes—and it’s worth thinking about whether your current approach is the right fit for you.

For example, if your income (and, as a result, your taxes) was a lot higher than you thought last year, completing an S Corp election could be a smart move. This tax status lets you split your income into two separate buckets: a reasonable salary and distributions. You only pay self-employment tax on your salary, which can lead to thousands in tax savings. 

Even if you don’t make any changes to your business entity, reviewing your information from last year helps you pinpoint what went well (and what didn’t), so you can adjust what matters most.

Step 2: Set Your Goals

With that information in your back pocket, you’re ready to set some goals for the coming year. These can be related to your numbers (e.g. increasing revenue), your systems (e.g. never missing a tax deadline), or both. 

It’s helpful to use the SMART goal framework here to ensure your objectives are as clear and motivating as possible. SMART goals are:

• Specific
• Measurable
• Achievable
• Relevant
• Time-bound

So, instead of setting a goal of “Do a better job with my financial management,” you might say, “Meet every single tax deadline in 2026 to avoid fines or penalties.”

It can be tempting to iron out a lot of ambitions here, but try to stick with three to five goals for the year. That’ll help you avoid spreading yourself too thin and keep you focused on the things that will be most meaningful to your business. 

Need some inspiration? Here are a few more examples of goals you could set:

• Increase my business revenue by 10% in 2026.
• Reduce my recurring expenses by $5,000 by the end of the year. 
• Invest in accounting software by the end of Q1 to streamline my financial processes.
• Commit to strategic tax planning to save at least 15% total in taxes this year.

Goal-setting might seem like an unnecessary exercise, but it’s one of the most effective ways to set your intentions and see real improvements in your business’s finances over the next year (and beyond). 

Step 3: Clean Up Any Lingering Messes

Have you been meaning to set up a separate business bank account? Or a retirement account? Or do you have a backlog of receipts you’ve been meaning to wade through for months?

It’s hard to start the new year fresh if you bring this baggage along with you, so sit down and take care of these tasks.

The good news? Your procrastination has probably made you catastrophize a lot of these to-dos—and you’ll be pleasantly surprised by just how quick and painless they are to get done. That’s especially true if you use an automated system like Lettuce that can do all of the legwork for you, including setting up a business bank account or completing your S Corp election.

Step 4: Anticipate Your Cash Flow

We know—solo business ownership would be a lot easier if you could see into the future. Yet, your cash flow feels unpredictable most of the time. 

But even if you don’t have a crystal ball, you can get yourself in a better position by doing your best to forecast what’s coming for the year ahead. Ask yourself questions like:

• Do you have any major clients, projects, or retainers wrapping up?
• Are you planning any time off that could affect your income?
• Are there any large purchases you need to make this coming year?
• Are there any typically slow seasons or busy times you should plan around?
• Do you have any recurring expenses that could increase?
• Have you made any changes (like an S Corp election) that will impact your taxes?
• Do you expect to raise your prices or change your pricing structure this year?
• How much do you plan to set aside for retirement? 

This doesn’t need to be a perfect system. Unexpected things will still crop up throughout the year, and that’s okay. The point is to get a general idea of some of the big things coming for the year ahead so you can be more proactive (and less panicked) about dealing with them.

Step 5: Mark Your Calendar

There are plenty of important tax deadlines and dates you need to keep track of throughout the year. Get them on your calendar now so they don’t sneak up on you while you’re caught up in the hustle of your daily work. 

If you’re not sure what due dates and reminders you need to mark down, our self-employed tax calendar lays out all of your important deadlines in a simple one-pager.

Of course, tax due dates matter, but there are other things you can jot on your schedule to help you stay on top of your finances, including:

• Planned price increases or changes
• Retirement savings contributions 
• Subscription or insurance renewal dates
• Time off or slower work periods
• Open enrollment for your health benefits

Spending a few minutes to map out these key dates and reminders will help you avoid nasty surprises (and last-minute scrambles) throughout the entire year. 

Step 6: Streamline Your Systems

If you’re still making do with jumbled spreadsheets and boxes of receipts, a new year is the perfect time to bring your accounting system into the modern era.

Lettuce can help. It’s an automated tax and accounting platform purpose-built for solo business owners just like you. Lettuce can:

• Complete your S Corp election for you (yes, even the paperwork) and stay on top of your ongoing compliance requirements (like payroll)
• Set up your business bank account and a business debit card so you can separate your business and personal finances
• Automatically track and categorize your transactions so you don’t miss any expense deductions
• Proactively set aside money for your quarterly estimated taxes and even pay them on your behalf
• Show you a clear, real-time picture of your solo business’s finances so you can make informed decisions

You can’t start fresh by using the same old system. Lettuce takes the pain out of your business-of-one’s accounting and bookkeeping so you can spend more time focused on what matters most: your clients.

Step 7: Start a Business Emergency Fund

Planning is a helpful exercise, but there are still things you can’t see coming—like a surprisingly lean month or an unanticipated large purchase. In those times, it’s nice to have a financial cushion you can fall back on.

So, if you don’t already have a business emergency fund, now is the time to start one.

While experts recommend stashing away three to six months of operating expenses, keep in mind that something is better than nothing. Even if you put away $50 to $100 per month, over time, you’ll build up a solid safety net you can tap into whenever you need it. 

Start the Year With a Fresh Slate for Your Finances

The start of a new year brings a lot of enthusiasm and optimism—but carrying over last year’s financial messes and missteps can quickly tarnish the shine of a fresh beginning.

Fortunately, you’re in control of your solo business. That means there are a few steps you can take to get your finances in check and start (and finish) the year strong.

Ready to streamline your solo business’s accounting this year? Get started with Lettuce today.