There’s no denying it, 2020 has been a rough year for pretty much everyone – and it’s not over yet. You may be thinking: ‘what’s the point in creating a 2021 businesses plan? All my plans for 2020 went out of the window’.
Over this past year, every business has had its strengths and weaknesses exposed, and we’re sure to see the impact of coronavirus continue into 2021. This year has taught us that adapting to change quickly is vital to business success.
Spending time planning for 2021 now will help you consider potential roadblocks and identify unknown factors. This plan will help you prepare for the year ahead.
Here’s our guide for creating a successful 2021 business plan.
Where to start?
If 2020 has taught us anything, it’s to expect the unexpected. So, while we can remain optimistic, make plans for some tough decisions.
Top of your list should be cashflow. Positive cash flow will give your business more flexibility to invest in new opportunities and grow.
It’s also worth considering starting a rainy day fund. While the government have been supportive (for many) in helping businesses remain active, we shouldn’t rely on continuous support. You may need access to cash quickly to seize a new opportunity or to tide you over for a little while.
Budgeting is essential to help keep your cash flow on track. For more advice on how to budget, take a look at our 7 easy steps to successful budgeting.
How to plan for business in 2021
The principals of planning for 2021 are no different from any other year. Perhaps the only contrast is there is more evidence to suggest things may get more challenging. And this is why planning is essential.
In 2021, consider the national tried system. How will your business continue to operate in another full lockdown, and then work from there? Consider how you will switch on and off services based on these restrictions. Agility in these circumstances will be the key to helping you survive and thrive.
What should your 2021 business plan include?
You don’t need to overcomplicate the process. If you have a business mentor, now is the time to get them involved. They can help steer you in the right direction and identify hidden factors.
When writing a business plan, it’s always helpful to use the SOSTAC model. Here are some guidelines to help you create a successful 2021 business plan:
The purpose of your business
It is always important to keep the ‘why’ you’re doing business at the heart of your business plan. This will help ensure the content within your plan supports your business purpose. It also provides context for anyone outside the company reading your plan.
Document where you are now so that you can measure progress. For example, how did you handle lockdown? What challenges did you overcome? How many products do you have, how many customers, how much did you spend against your 2020 budget, sales numbers etc.
Where do you want to be: both for the business and personally? Set Specific Measurable Achievable Realistic Timebound (SMART) objectives for each of the steps required to achieve your goals.
How are we going to get there? Broadly, how do you plan to achieve the objectives you’ve defined? For example, if one aim is to increase sales, the strategy might be to start selling in new markets.
What are we going to do? With the strategies outlined, you’ll need to decide what tactical elements are required to achieve these. Looking back at the example above, let’s say one strategy is to penetrate new markets, one tactic to achieve this may be having an online store.
What do we need to do, by when, and by whom? This is the list you’re probably used to making. It’s the task list for each of the tactics you outlined above. Sticking with the same theme of selling into new markets, and using a website to do that, your actions may include things like:
- Build an e-commerce website
- Research shipping fees
- Review pricing
- Review packaging options
With a list in place, add to it who will do what and by when. Day to day service delivery can often get in the way of delivering on an action plan, so be realistic when deciding on deadlines.
How are we going to measure and monitor success?
Outlining precise, defined metrics or milestones will help you record and recognise success.
An easy mechanism to establish success against your goals is to attach accountability to the objectives, strategies, tactics and actions. Regular management team meetings, or if you’re a smaller business, scheduled meetings with your business coach will encourage you to stick to your plan.
It sounds logical, but you’d be surprised how many plans are written but not followed. There are so many distractions as a business owner; it’s easy to lose sight.
How ETC can help
If you need help creating a comprehensive business plan for 2021, please get in touch.
If you’re new to ETC, why not contact us for a free new business review? We’ll spend two hours with you, giving you professional coaching and will leave you with actions for immediate implementation.