Annual business planning is something every smart business owner does as winter draws near, and the end of one year will soon transition into the start of the next. But this year? Let’s be real - everything has hit the fan. So how on earth are you supposed to handle your annual planning process this time around? Don’t worry; we’ve got some tips for you. Here’s our best advice about how to plan for 2021.
Do Factor in the Context of 2020
As much as many of us would love to get a hold of those cool memory-erasing pens from “Men in Black” and pretend like 2020 never happened… we just can’t. It’s been a painful year in countless ways, but there are always silver linings to be found. We can - and must - learn from this year’s hard lessons. Perseverance, banding together and making lemonade are just a few, and we’re all stronger from experiencing them. To this end, your annual business planning should be rooted in reality and account for potentially continued uncertainty in 2021. No matter what pundits may say, no one really knows how long the effects of the pandemic will be with us or what the economy will look like next year. It’s wise to plan for more hardship while hoping for sunnier skies. Set your budget as if your earnings will be similar to what they were this year, and review all of your expenses so you can see what’s able to be slashed. Your goal should be to keep what’s necessary and is helping you grow, but operate in as lean a capacity as possible.
Do Plan for Multiple Scenarios
But what if next year ends up being worse than this year, or way better? It’s in your business’ best interest to map out a few possible outcomes so you’re prepared, come what may. Set your budget to be on par with this year, but allow for worst case and best case scenarios. The key here is to get specific. Let’s say you lost half of your customers during the pandemic. Here are some tiers of planning you should do:
- Annual Plan A - Include projections and plans for 2021, in the event you lose 50% of customers again. This should be the most aggressive scenario, and outline sequential steps to take if customers dry up and revenue takes a nosedive. It may include reducing operating expenses (e.g. moving into a smaller space or getting rid of your office altogether and trying a remote workforce model), furloughs or layoffs, etc.
- Annual Plan B - This is somewhat like holding up a mirror to this year, and is likely the most realistic of all scenarios. It should show how you’ve bobbed and weaved this year, and plan to carry effective new tactics over to the new year. Maybe you figured out a new way to manufacture your flagship product that saves costs and production time. Plan to continue with this new approach, and consider other ways you’ve cut expenses this year. Are you able to carry those savings over as well?
- Annual Plan C - This is the scenario for which we all hope. Keep this realistic, but think about the growth you were having prior to COVID-19. If the economy improves and the world gets back on track to a more normal state, is it realistic to expect similar growth? If so, plan for it. How will you ensure you have the right internal resources to scale up as customers start coming back? What will you need to do from an operational perspective to meet increasing demand?
Don’t Forget About Relationships
One of the best parts of an otherwise turbulent year was the way that humans reached out to other humans in times of need. We saw so many acts of kindness this year, in business and outside of it. So, think through how you strengthened your own relationships this year. The best thing any of us could do during the pandemic was put our customers and team members first. Did you reconfigure your service offerings so you could provide more value to customers at a more affordable price? Were you able to help them, for free, in some way? Did you offer to contribute to costs of mental health services for employees? Don’t let these relational gifts remain stuck in 2020. Consider how you can put others first in 2021, and retain your giving mindset as the calendar year is flipped. By putting selfless and value-first programs and ideas into your annual business plan, you’ll hold yourself accountable to supporting others.
Don’t Settle for the Status Quo
Finally, don’t let the difficulties of 2020 bring you down and crush your spirit - or dreams. Even if your business has only been hanging on by a thread and you’ve thought of shutting your doors every day, hold onto hope. There are solid projections that things will improve next year, even if none of us know exactly how that will look or how much improvement it will be. In your annual business planning, allow yourself to get excited about the possibilities and promise of the future. Will you innovate in 2021? Introduce a new product line? Regain some of your customers? Keep the lights on? No matter how big or small your aspiration seems, it’s important. On that note, I want to leave you with a quote from Winston Churchill. “Success is not final, failure is not fatal. It is the courage to continue that counts.” Have courage, and plan for 2021 like you’ve never planned before. Need help planning your marketing strategy? Give us a call!