Planning For 2021—A Lesson From 2020

Well, it’s been one heck of a year. I don’t know about you, but I’m ready to see what 2021 has in store…

But before we start fantasizing that next year is going to be sunshine and rainbows, let’s take a step back and cool our jets. 

If 2020 has reminded us of anything (in bright neon flashing lights), it’s that man plans, and God laughs. At the same time, planning is a key part of business. What’s an entrepreneur to do?

Planning For 2021—A Lesson From 2020 

What have you learned from 2020? Here’s what I’ve learned. Plans can get derailed. Do I contradict myself by titling this “Planning For 2021?” Possibly. But there’s a method to my madness. 

Like you, I’m an entrepreneur. I like to plan. Sure, I’ve done quite a few things without preparing (like when I first leapt into entrepreneurship, to be quite honest). But, that’s precisely when I learned that planning was my friend. 

Long story short, I’m not telling you to scrap your plans. In fact, I’m encouraging planning. With the memory of 2020 still alive (hello, we’re still living it), I’m sharing what I’ve learned from what’s arguably going to be one of the biggest sections of future history books. 

So without further ado, here are a few lessons from 2020 and how they can guide your 2021 plans.   

1. Leave Wiggle Room In Your Budget

Did Covid-19 push your budget off the rails? For many small business owners, the answer is yes. 

Here are a few ways the pandemic may have impacted your budget:

• Temporary business shutdown 
• Lowered sales
• Employee absences due to illness
• Business operations changes 
• CDC health guidance compliance 

If you had to furlough or lay off employees to stay afloat, you know how hard it’s been to keep your income and expenses on track with what you had mapped out. 

When we were planning for 2020, there was no way any of us could have predicted the pandemic would last as long and impacted as many things as it has. It is what it is. But now, while planning for 2021, take this as a lesson to leave a little wiggle room in your budget. 

So, for example, you might plan to have an additional 15% of your fixed expenses in surprise expenses. 

Err on the side of caution when it comes to predicting your business’s expenses and income. It’s great to have goals, but don’t rely on a budget that’s relying on you reaching unrealistic goals (e.g., 50% profit increase in 2021). Pair historical data with economic considerations when setting your budget.

And again … leave a good amount of room to be wrong. 

In addition to leaving room in your budget for unknown expenses, try to put a little money into an emergency fund for your business. That way, you have something to cushion the blow if your expenses are over-budget and your incoming money below projections.

2. Keep Up With The News

Ever since March, the news has been all about the coronavirus. Sure, health and safety was the number one newsworthy story. But you know what else was? Covid-19 financial relief measures.

Keeping up with the news not only helped me prepare for the near future, but it also helped me plan out the rest of the year. When news was first breaking of the virus making its way around the U.S., we started working to get our staff fully remote—and fast. 

We kept up with national, state, and local news to monitor the situation. What events were being canceled? What business types were temporarily shutting down? How could we protect our businesses during the coronavirus outbreak? Which states had stay-at-home orders? To find out, we watched press conference after press conference to make sure we knew what was going on.    

But as I said, there was more information in the news than health and safety guidelines that was also important. By keeping up with the news, you knew what types of financial relief were available to business owners. And there was quite a bit.

Here are just some of the things we learned by keeping up with the news during the pandemic:

• Paycheck Protection Program (PPP)
• Tax deferments and extensions 
• Expanded unemployment
• Tax credits for employers (and employees)
• Mandatory Covid-19 paid sick and family leave

There were a lot of business owners who didn’t keep up with the news in 2020. And who can blame them? There was a lot to take in, and it all happened at once. But as a result, some business owners missed out on the chance to take out a PPP loan. Some didn’t know they had to provide paid sick and family leave to eligible employees. 

So if there’s any advice I can offer, it’s to stay up to date with what’s happening in your state and locality in 2021. Subscribe to get news alerts and carve out a little extra time in your day to keep your business in top shape. 

3. Be Willing To Adapt

I don’t know about you, but 2020 reminded me of one of the important business skills: adaptability. If you aren’t willing to try new things, you’ll have no way to keep up when times change … or when Covid-19 forces the times to change.

From adding new products to offering new delivery methods, 2020 forced businesses nationwide to get creative. 

Here are just some of the great ideas I saw businesses implementing to adapt to the pandemic:

• Contact-free delivery
• New product lines (e.g., masks)
• Care packages customers could send to loved ones

Being able to adapt helps build business resilience. Who knows what 2021 (or any year after) has in store for us. Again, we can’t prepare for any exact situation. But, we can find ways to get innovative. 

When planning for 2021, ask yourself questions and come up with some ways you can change things up. For example, you might decide to add an online shopping experience to get in front of customers who prefer shopping online than in stores. 

4. Assess Your Vendors And Suppliers 

It’s a good idea to look into how much you’re spending on supplies and inventory from time to time. But, assessing your vendors and suppliers is especially important going into 2021. 

Was your supply chain disrupted during the pandemic? If so, you’re not alone. In March, nearly 75% of businesses had supply chain disruptions, forcing many companies to make substitutions in the eleventh hour. To avoid issues like this, you might consider diversifying your supply chain. 

And, you may have different needs in 2021 than you had in 2020 (pre-Covid). Maybe you changed up your business model or started expanding your products or services. And if you did, you might need to find some new vendors.

Not to mention, you may be able to cut back some of your expenses if you can find vendors and suppliers willing to give you better rates than your current ones. Take a look at everything you’re spending money on—accounting software, office supplies, insurance, etc.—and see who can give you the best deal. 

So, use this time to assess your business’s supply needs going into 2021, compare costs, and diversify your supply chain.