Annual reports are like fingerprints: No two are the same. A company’s annual report can vary as much as its business model and goals. But no matter what kind of company you run, the goal of your annual report is to stick in investors’ minds and convince them to buy, buy, buy!
Every year companies like yours release pictures and words about how wonderful they’ve been doing lately—and hope you’ll give them some money for it. That’s why we’re here to help you plan out an annual report that blows them away with what a great job you’ve done since last year.
Not just another picture book full of pretty colors, your goal with this document is to show your investors what you’ve done for them lately. And that’s where different types of annual reports come in…
Different Types Of Annual Reports
Annual reports come in many shapes and sizes, but there are three main types you’ll need to know about: startup, mid-year updates, and year-end reviews.
1. Startup Annual Statement (From Startups)
You’re probably used to seeing annual reports from established companies, but before you start lobbying your investors for one just yet it’s important to have something more specific planned out.
Since this is your first time around the block with an annual report, think of this as a practice run—a way to get all your ducks in a row so next year will be much easier when you’re already in the swing of things.
Your next milestone should be to turn this annual report of a company into a full 1-year review (which will follow the same format below) sometime during your second half-year.
So while you can get away with not including all three types of annual reports, you’ll need at least one to give investors an idea of what you’ve accomplished so far and show them how much progress you’ve made.
Make sure that when your first year ends, you’re up for detailing exactly what happened over the last 6 months then following up with another annual report,6 months later which details what went on after that! This way, if anything does go wrong, they always have something concrete to look back—and it doesn’t matter if you’re annual report is late so long as it arrives before the next one!
2. Mid-Year Update Annual Financial Statement (From Startups)
This is extremely important for most startups because it gives investors a chance to see exactly what’s happened with their money since last year and show them why they should keep giving you more.
If that means you need to spend a little more time and put together another full-length review, then do what you must—because if your investors like what they’ve read in this annual update, chances are they’ll give you some extra funds to make the most of it!
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3. Year-End Review Target Annual Report (For All Businesses)
As we mentioned above, this type is pretty much the same as the first report, but since you’ll already be up to speed with how your business is doing, you won’t have to spend as much time on it.
Another important thing for this type of annual report is that it’s basically your last chance to plead your case with investors before they decide if they’re going to stick around or pull out their money.
It’s extremely unfortunate that this would ever happen, but sometimes companies just can’t seem to turn a profit—and once your investors figure that out, they’re usually gone within the blink of an eye. If at all possible, try not to go down in flames!
While these are good guidelines for any kind of company that releases company financial statements every year, you might have to adjust them depending on the type of company you’re running.
For example, if you’re a real estate company then your annual report will be more about selling property rather than actually achieving profits which is what makes it so unique. In this case, try for a mid-year annual update instead of a full one because real estate investors usually consider every 6 months a big deal!
Of course, if you can get away with releasing another full review after another 6 months then go for it—just don’t do anything too drastic lest they think your company is in trouble early on.
While an Annual Report might seem like too much work at first, it’s definitely worth the effort—and if you’ve ever wondered why most businesses put so much time into them every year (even though they never actually release any of their reports) now you know exactly why.
Of course, once all this stuff gets easy then you won’t need to worry about perfecting your Annual Reports anymore! Just keep up with whatever works best for you and, before long, your business will be thriving with no worrying whatsoever.
Don’t forget that these documents are aimed at “the masses” (i.e., donors, members, and clients) so they need to be easy to understand by anyone. It will help you reach your audience if you speak like a normal person with no big words or lofty concepts.