It’s safe to say that virtually nobody will miss 2020. But while you’re probably anxious to jump right into next year, it’s important to assess where your business finances stand now, so you’re ready on January 1. There’s no doubt that 2021 is going to be unlike any year before it, so whether your goal is to overcome lost revenue from the past year, or looking to build on a surprisingly strong 2020, there are things to consider to increase the potential for a more profitable year ahead.
Take a deep breath and review your current status.
So…at this moment, where do you stand? Is your business income starting to return to pre- March levels? Is it exceeding your current expenditures? Where are you in terms of company assets and liabilities? This is critical not only in helping you shape your’21 battle plan, it can also help you objectively assess your current strengths and weaknesses – and perhaps illuminate possible solutions for the latter.
Now is absolutely the time to begin to develop your tax strategy with your accountant. For example, if you received a Paycheck Protection Program loan, you’ll need to know how your loan forgiveness (or not) will affect your next tax return. Know your options, from changing deductions due to the coronavirus, to consideration of capital purchases to reduce your 2020 tax liability. This is where the advice of a trusted financial professional is critical.
All set? Time to be sure your business is ready to move forward!
With your review complete, you can answer the most important question: are you hitting (or coming close to) the goals you had for 2020 at this moment, or are you lagging? Despite so many difficulties almost all businesses had to face, you might have discovered some positives that wouldn’t have revealed themselves otherwise. For example, you may have discovered that working remotely was not only possible for your operation, but even desirable moving forward.
A recent Stanford University study shows that employees who work remotely not only put in a full day’s work, but are often more productive than they were when at an office. Among the other advantages are reduced workplace-related distractions (and stress), with less lost time due to commuting.
Real estate is expensive. Especially so for a small business. It may be time to call the remote workforce experiment a success and garner cost savings that could provide a competitive advantage.
If, on the other hand, you own a retail business and suffered the inevitable drop in traffic due to quarantine and the reluctance of many to do in-person shopping even afterward, you might need to make your website more customer-friendly. Look to make the user experience a positive one and the entire site as simple to navigate as possible.
It’s also more important than ever to be actively engaged on social media platforms. Studies have shown that an increasing number of older people – the demographic that has traditionally been the backbone of traditional retailing – will increasingly begin using social media platforms. If you don’t have a strong, consistent social media presence, you might be missing out on new customers.
Finally, it might also be wise to plan for additional curbside delivery services, whether or not it’s COVID-related. The ability to effectively deliver goods to customers in this fashion proved invaluable to many retailers – and highly popular with consumers.
Finally, have a good battle plan in hand, including a realistic budget. If 2020 was an anomaly, look to previous years to set your baseline expectations. Maybe this is the year to expand your offerings – or to be conservative in order to manage your cash flow. Are there expenses you could trim, or do you need to expand to maintain the success you had in the past year? Take a clear-eyed look at any- and everything, to be fully prepared for whatever might come.
And while you’re looking for ways to get the edge over your competition, this might be a good time to note (ahem!) that First Internet Bank was recognized as the “Best Small Business Checking Account” in Newsweek’s first-ever ranking of financial institutions, America’s Best Banks 2021. In explaining their choice, Newsweek noted, “Business owners need a good blend of solid interest rates and low fees to avoid eating into their profits…The winner offers no monthly fee, unlimited transactions, and $10 in ATM fee reimbursements each month.” A better checking account that even earns you money? It’s worth a look!
“May you live in interesting times” is an ironic phrase that some have attributed to an ancient curse. For better or worse, 2020 has been an “interesting” experience. Business owners who have come out of the past year learning how to be better prepared when plans change unexpectedly and can respond positively are the ones who will win 2021.