Plan for an Uncertain 2021
December 22, 2020 | Education
The U.S. psychic industry is worth $2.2billion, and no one could’ve predicted the events of 2020. The only thing any of us can say for sure is that we don’t know what 2021 will bring.
How can you make next year’s strategy dynamic enough to guide you through a week-to-week economy?
Build dynamism into your plans
The businesses that thrived this year were the ones that adapted quickly.
- Prioritize a robust cash flow analysis over your budget
According to a study by U.S. Bank, a surprising number of business owners don’t have a handle on their cash flow or even know their numbers, even though 82% of businesses fail because of cash flow issues. Your budget might need to be forecasted and re-forecasted, but in a volatile environment, cash flow is
- Retain staff through flexible working arrangements
A lot of people used their time at home in 2020 to reevaluate how they spend their time and what alternative ideas of productivity looked like outside of a traditional 9 – 5 office environment. Companies that embrace more flexible arrangements will retain and attract talent next year.
- If you haven’t already, create a digital transformation plan
According to Deloitte Insights, “As businesses grapple with the acute disruption brought on by COVID-19, the lessons of chronic disruption like digital transformation are proving useful.” A lot of companies hashed together digital transformation plans in response to a dramatic and changing work environment. Still, the ones who will be successful will ask themselves how they can retain the pace of digital change in a less volatile world.
- Ask yourself how you can build reserves while maintaining growth
Some experts say that you should have three-months running costs in reserve, others suggest six months (your financial advisor or CPA will be able to tell you what’s appropriate for your size and industry). How can you leverage your best-selling product or service to support you in building cash reserves?
- Continue to provide exceptional value to your customer
Your customers have gotten you through a challenging year. People are turning to small businesses for tailored help in strange circumstances. Continue to provide fantastic service to retain them through 2021, whatever may come.
Scenario modelling is the process of analyzing future events by considering all of the alternative possible outcomes and making a plan in advance to mitigate the risks.
What would happen to your business in a second wave of lockdowns?
Increased lockdowns across Europe over the holidays and the mutant coronavirus strain in the UK are a warning to the US—it’d be good to prepare for a second lockdown.
- If a critical staff member became sick or had to take leave—including you—would the business still be able to function?
- Would you be prepared to apply for another round of PPP funding if it became available? (Now might be a good time to cultivate a relationship with your bank as we now know businesses got access to funds more quickly if they had a contact at the bank to support them.)
- Are all of your suppliers in good order, and will they survive if met with the same challenges they saw before?
- Are the online systems and processes that saw you through the last lockdown robust enough to see you through another?
What would happen to your systems under a cyberattack?
Cybercriminals are getting smarter, and entrepreneurs are particularly vulnerable; 58% of all data breach victims are small businesses, which is a scary prospect at an average cost of $120K.
- Are your employees empowered to avoid phishing scams, and does your IT or systems manager have a cybersecurity checklist they can involve you in? If they left, would you know how to protect your business from a data breach?
- Do you have insurance to cover a data breach?
How would your business fare in a severe weather event?
According to scientists, severe weather events like wildfires in the west and hurricanes along the Gulf Coast will be more common in the coming years. Across industries and governments, plans for adaption and mitigation are underway.
- Is your premises at risk for a fire or flood, and do you have continuity plans if something were to happen to your office or retail space?
- Do you have extreme weather insurance to protect your business?
- What are the vulnerabilities in your supply chain? (Are your suppliers based somewhere affected by frequent fires, or do they depend on certain weather conditions to produce goods?)
The government has strict emissions goals to meet. There will be a renewed energy in the White House to support green initiatives for businesses, like retroactive building work and low-carbon transportation alternatives. The Small Business Administration runs a list of Environmental Grants & Loans that will probably grow next year. Could your business be eligible?
What would happen to your customers in a global depression?
Some economists are predicting a V-shaped economic recovery, in which everybody gets vaccinated and heads straight back out to work. Others think it will be a steady longer-term bounce-back similar to after the financial crisis. But a global depression is certainly not off the table for 2021.
- What’s your business credit score, and how can you improve it so that you can continue to be attractive to investors, even if the worst happens?
- Do you know what your customers’ priorities are, and how you can build your products and services into their must-haves?
- Do you have more than one revenue stream that people would continue to use, even in an essentials-only budget?
Sign Up For Our Newsletter