Did you heave a sigh when you saw 2020 coming to an end?
I did.
With the new year lurking around though, it’s time to strengthen your commitment to acting on your business goals.
Considering how the year 2020 panned out for many businesses, with the unexpected global pandemic hitting the crust of major economies worldwide and in turn leaving scars on individual’s pockets; you may feel sceptical about making elaborate plans for 2021.
However, now may be the perfect time to rid yourself of the unnecessary wait and launch out or expand on that business idea. What better time to make such bold move than the start of a new year?
Reinvent; restructure; strategize.
As with delving into new waters, it would be tricky going in blind. I am quite certain that failure isn’t a preconceived notion as you seek to embark on this endeavour.
With this in mind, I have curated two mini lists, firstly about things to consider as you plan for the future, and secondly, the market evaluation and research you should do that would almost guarantee a smooth landing while you leap.
Never had a business plan? Then read this article on writing a business plan.
Contents
13 Things You Should Know While Planning for the New Business Year
Here are things you should know as you plan to either start or expand your business in 2021.
- Create a plan: Look at the next twelve months with the business peaks and valleys in mind. Create a strategy and a plan for how you will prepare for the slack times when revenues are good. Your design will help you stay focused in the heat of battle. So many startups commonly overlook this as they go in hoping for the best, they seem to forget that the market can be unpredictable, and the best way to predict it is to plan it.
- Stick to the plan: If budgeting for future expenses is an essential first step, and creating a plan is the second, you will need to stick to the plan for it to be successful. I’m not convinced that means a rigid adherence to a program if situations change, but make sure you consider the program and the ramifications of deviating from it in those situations. Discipline is one of the most emphasized qualities in most wall street journals; if that is true for conglomerates, then it is much more so for startups.
- Establish benchmarks and goals: Poor cash flow management is one of the biggest causes of small business failure, so establishing practices and strategies for properly managing your cash flow should be a priority. Make sure you’re on top of your cash flow metric and consult with an accountant if you’re not sure of the best approach to take.
- Stay on top of your customers: Let’s say you bill your customers by invoice, and now you’ve offered them 30 days to pay their bill. A slow-paying customer will eat up all the profit you may have had—making your busy season less profitable and putting the slower times at risk. To speed things up, you might offer your customers an additional discount to pay today or have a credit card on file you can charge against at the end of the month. The goal is to avoid the inevitable cash flow challenges associated with slow-paying customers. The quicker you have access to that cash flow, the easier it is to manage. One thing I have learnt is how to make things affordable for customers without making your product cheaper. You need your money at hand, give them payment structures that wouldn’t hamper your cash flow.
- Start saving: Setting aside a little cash for a rainy day doesn’t just apply to your household budget. There are a lot of unexpected business expenses that could be addressed with some money in the bank. A good goal to shoot for is three to six months of operating capital, but anything is better than nothing. Some of the smartest business owners I know regularly set aside some of their profits to ensure they have at least a three- to six-month cushion should something unexpected happen.
This outline are things to consider before starting a new business or expanding existing ones; now we’ll move to my second list: keeping your business afloat.
SEE: Solved: Top 6 Challenges of Small Business Owners Today
Tips on Staying Afloat
To keep your business thriving, it’s all about foundations, so the proper market evaluation is always a key factor. Here are some pointers:
- Need/urgency — Is your product needed? How badly do people want or need this right now? These are the most important questions you would have to answer because your product should ideally be solving a problem. At the start of the pandemic, demand on certain household items increased while others dropped.
Vendors lost clients who had booked ahead for big events as there were now regulations on public gatherings. Jewellers couldn’t make sales because no one was dressing up for zoom weddings. Considering the world isn’t entirely out of the water, you may want to reaccess your market and align with new demands.
- Pricing Potential — what is the highest average price a purchaser would be willing to spend for a solution?
- Market Size — How many people are actively purchasing things like this?
- Cost of Customer Acquisition — how easy is it to acquire a new customer? On average, how much will it cost to generate a sale, both in money and effort?
- Cost of Value-Delivery — how much would it cost to create and deliver the value offered, both in money and effort?
- The uniqueness of offer — how unique is your offer versus competing offerings in the market, what incentives are you offering or how are you doing it better that would make you preferred to your competitors
- Speed to market — how quickly can you create something to sell?
- Up-Front Investment — how much will you have to invest before you’re ready to sell?
- Evergreen Potential — once the initial offer has been created, how much additional work will you have to put into it to continue selling?
These are a few pointers you need to consider as you venture into the new year.
Final Words
These are only tips I curated because I believe they would be very helpful, but the ultimate success or failure of your business is down to you.
Quick Summary
Prefer the short version? Here is a concise recap of the key ideas in this article.
13 Things You Should Know While Planning for the New Business Year Here are things you should know as you plan to either start or expand your business in 2021. Establish benchmarks and goals: Poor cash flow management is one of the biggest causes of small business failure, so establishing practices and strategies for properly managing your cash flow should be a priority. This outline are things to consider before starting a new business or expanding existing ones; now we'll move to my second list: keeping your business afloat. SEE: Solved: Top 6 Challenges of Small Business Owners Today Tips on.
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