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Business Planning for 2021 - November 27th 2020

Start planning for 2021

The vaccine is truly great news, but the reality is it is going to take many months, with several vaccines, to immunise everyone over 50, and then there is the rest of the population.

However, there are some practical steps you can take to minimise potential disruption to your business:

  1. Review your Budgets and set realistic and achievable targets for the remainder of 2020 and for 2021.
  2. Get your employees involved in a discussion of likely trading conditions and get their input on reducing costs and maintaining revenues.
  3. Use ‘bottom up’ budgeting where everyone in the business gives input on areas over which they have control – target a 10% cost saving.
  4. Review and flowchart the main processes in your business (e.g. Sales processing, order fulfilment, shipping etc.) and challenge the need for each step.
  5. Encourage team members to suggest ways to streamline and simplify processes (e.g. sit down and brainstorm about efficiencies and cost reduction).
  6. Put extra effort into making sure your relationships with your customers are solid.
  7. Review your list of products and services and eliminate those that are unprofitable or not core products/services.
  8. Review efficiency of business processes and consider alternatives such as outsourcing certain activities locally or overseas.
  9. Agree extended payment terms with all suppliers in advance.
  10. Pull everyone together and explain the business strategy and get their buy-in.

Please talk to us about cashflow planning for the next six months, we can help with a template so you can do this yourself or work together to produce estimates for a variety of scenarios.

Financial Forecasting

One of our director's Mark Johnstone recently talked to Thive, a local business community regarding how to financially forecast and budget in such a fast-moving business environment. Click here if you would like to watch the presentation.

Please do talk to us about helping your business plan forward and protect cash flows, our most successful clients know that the best way to predict the future is to create it!

How to Build your Business Strategy in the Face of Uncertainty

We live in uncertain times and planning for the future is challenging. Rather than paying attention to what you can’t do, focus on what you can do. For example, when restaurants couldn’t serve customers indoors, they transitioned to delivery, take-away and outdoor dining. Regardless of the type of business that you manage, this is the mindset to develop and use for your 2021 business strategy.

Your “can-do” business strategy should start with a list of what is possible. Perhaps you can transition to doing business online, research new markets, or utilise the shift to video conferencing to create a new and more personal experience for your customers while they are in the comfort of their home. Once you have considered what you can do, you can then create some strategic objectives for the year ahead.

Consider how you can shift your business strategy to one that is more customer centric. The best businesses are those that deliver added value to their customers. For example, you could provide new payment options to customers in order to encourage them to make a purchasing decision. Your customers will be more focused on cash flow due to the prevailing economic uncertainty, so offering structured payment plans, 12 months interest free credit and so on, could make your firm more attractive than your competitors.

If you are considering launching new products or services in 2021, you may need to extend the timeline. The world is not back to normal (whatever the “new normal” will be) and supply chains are struggling with issues related to transportation, production backlogs, availability of materials, etc. As such, it would be prudent to allow some extra lead time in your plan for any new product or service launch.

With an uncertain operating environment anticipated to continue for some time yet, it makes sense to have a backup plan. As you develop your strategy, take some time to consider what potential contingencies you can put in place in order to be ready to move in a different direction, should you run into some headwinds. If you are unsure where to start, it can be helpful to research some of the tactics that worked for other businesses, even those that may be operating in a completely different sector. You can then apply the best bits of those tactics to your own strategic plan.

As you develop your 2021 business strategy, you will most likely identify some actions that you can undertake with certainty, which will help you to manage some of the risks that are inherent in operating in uncertain economic times. Perhaps you can bolster your firm’s cash reserves, reduce fixed costs, or negotiate better terms with suppliers. By proactively focusing on delivering against these actions, you will keep moving your business forward, which will help to make your firm more resilient in the medium to long term.