How to Plan for Your Business in 2021

Nobody could have planned for what happened. Due to the sudden change in conditions caused by the pandemic, all businesses have had to adjust their 2020 plans and even their business models as a whole.

However, with the close of 2020, how can you now effectively plan for your business in 2021? The key thing to keep in mind is that you’ll likely have to make adjustments to your plans, no matter what happens in 2021.

On top of being flexible with 2021 plans, there will be new challenges and opportunities to consider. Every business will also spend their 2021 planning time thinking more in-depth than even about where their budget is directed and what they should be investing in.

In this blog, we discuss some strategies for tackling your 2021 planning. We also focus on some of the main trends, challenges, and opportunities that businesses across the board will be dealing with.

Business Planning for 2021

A benefit of planning for 2021 is that you now know what could be ahead, unlike in Q1 of 2020 when the pandemic and related measures hit suddenly. Primarily, it will be clearer what restrictive measures will be in place.

Understanding what the environment is like and how it will evolve due to the pandemic means that you can plan better. You can also continue to expand on plans to adapt and survive that were created this year.

Despite this, a challenge of planning for 2021 will still be the uncertainty involved, even though the situation is clearer. You could see the year exhibit a combination of tight controls, lessened controls, and even complete removal of controls.

If you serve areas at a national or especially international level, you need to be prepared to deal with restrictions changing at different times too, based mainly on vaccine rollout.

2021 still exhibits much uncertainty but less so than 2020, making planning for this year easier.

Internal Analysis

The first step in any business planning is to analyze the internal environment. Along with your standard internal reviews, there will be a few new elements to consider this year. 

This includes a more in-depth look at finances and projections and a decision on the optimal work environment for employees. The following are some things to ensure you include in your internal review and planning.

1. Analyze Your Current Situation and 2020 Performance

As always, you’ll want to start by conducting a SWOT analysis (or similar analysis). Use the information found as the base for forming your strategy.

This will likely look very different from last year’s analysis, whether you did well, maintained, or were negatively affected by the pandemic.

A main thing to focus on is how your business model and mission have changed due to the pandemic. Consider what your main company goals are now and how you will achieve those.

These goals could be anything from expanding into new markets that arose or were made accessible by the pandemic to simply surviving.

2. Look Closely at Finances and Projections

All business plans for the new year rely on analyzing finances as well as sales and budget projections for the year ahead. This year, this is more crucial than ever.

Firstly, after what was a tough year for many companies, do you have the finances to continue business next year? Especially if conditions continue as is through Q2, Q3, and even to the end of 2021. Look at sales projections and expense projections too. Are these sustainable?

Consider All Scenarios

When analyzing projections, consider a best, likely, and worst-case scenario for cash inflow and outflow. This will help determine if and how you will survive in all possible scenarios.

Unfortunately, the worst-case scenario (pandemic conditions through 2021) may result in a plan that features staff layoffs, or the closing of certain departments or store locations. However, your best-case scenario could see big sales increases, especially if you operate in an industry hard hit by the pandemic.

Eliminate or Minimize Expenses

Think in-depth about where your budget goes. Are all these expenses worth it? Can you find more cost efficient options or eliminate some expenses at least for the time being?

If you’re considering eliminating some expenses or searching for a more cost efficient option, consider discussing this with the supplier first. Many businesses are concerned about a drop in sales right now and if you’re considering dropping a supplier, lots of other clients likely are too. Due to this, they may be open to giving discounts.

Be sure to look in-depth into any government aid or grants you may be able to benefit from too. If you can get this, it could be the deciding factor in many budget-based decisions.

When planning for 2021, you’ll want to look closely at financials and plan for multiple scenarios.

3. Think About Staff Changes

If your company was lucky enough to grow its operations in 2020, you may require more staff in 2021.

Due to unavoidable layoffs across a range of fields and industries, many qualified candidates are looking for work. Therefore, adding to your team in 2021 could be the perfect opportunity to gain some amazing new talent. 

Again, be sure to really analyze projections and worst-case scenarios. You don’t want to hire new staff assuming conditions will change soon, only to have to lay them off when they don’t.

4. Is Remote Working the Future for Your Company?

A question for many companies when thinking about 2021 will be “Do we stick with a fully remote working model or not?”

You may have already decided this but if not, weigh up the pros and cons of both scenarios. Ultimately, you want to choose the option that’s best for employee engagement and productivity and for overall company performance. You may also choose a hybrid setup with a mix of in-office and at-home working.

For many, the new year also means that it’s time for office space lease renewals. If your lease renewal date is approaching and your team has been working remotely, you need to think about if that model is here to stay. Or, if it’s an option to downsize your office space and keep some of your team remote.

5. Plan for Employee Engagement

Implementing a strategy to keep employees engaged should always be a top priority. But this needs to be an even more prominent feature of your 2021 planning. 2020 has been tough for everyone both professionally and personally so helping to boost team morale is highly necessary.

The move for many to a remote work setup may have affected employee engagement and company culture. A lack of face-to-face communication and team-building activities may have caused employees to “check-out” and feel less like they’re part of a team. Many employees won’t have been around the majority of their friends and family either this year, negatively affecting mood.

Due to this, boosting morale and investing in employee engagement will be needed to keep employees happy and motivated.

Unfortunately, many companies will have made layoffs too. While employees who were kept on will be thankful for that, there can still be feelings of negativity toward management. This can be due to remaining employees getting increased workloads without much, if any, increase in compensation, or resentment at the letting go of their colleagues.

Now is the time to be thinking about remote working. Do you plan to stick with that model or return to the office?

External and Opportunity Analysis

Again, external analysis is a common part of year-end reviews and new year planning. This year, you will need to focus a lot on analyzing market shifts and consumer trends as well as the health of the market(s) you serve as a whole.

Ensure you keep the following in mind during external and opportunity analysis.

1. Conduct Market Research

Your 2021 planning should focus a lot on monitoring trends and researching the current market and market shifts. If you’re in a position to expand, also research new markets that you can reach in the current and changing environment.

In doing this, you can identify threats and opportunities as well as spot any new competitors you may have. This type of analysis is more important than ever.

Taking advantage of an opportunity or being highly affected by a threat will likely cause a bigger effect than in past years. This could even be the difference between surviving through the pandemic or not.

2. Invest in Opportunities

While the overwhelming story relating to businesses during the pandemic has related to the closure and financial struggle of businesses, a lot of companies have benefited and grown.

Many opportunities and trends have been created or accelerated due to the pandemic. Whether you grew or not during 2020, 2021 could be the perfect time to do so, no matter what happens.

Make sure you analyze the market in-depth, as discussed above. Use this analysis to think about what products or services relating to your current offerings could appeal at the moment. Also, consider what other opportunities there are.

The benefit of investing in new opportunities in 2021 is that you now have access to data and trends that those expanding in 2020 did not. Analyzing this data will make it easier to see if your new target market is here to stay. Or if it’s a product of the pandemic that will practically disappear once the virus is under control.

3. The Digital Transformation Trend

A main trend accelerated by the pandemic is the move to digital. This is also one of the trends most likely to remain after the pandemic is over. This move covers a vast range of industries from companies with bricks and mortar stores moving to e-commerce to publishers moving completely to digital.

This digital transformation will feature strongly in many businesses’ 2021 plans. This includes creating strategy on how to improve your digital presence, expand on what you have in place, and get above the competition.

For those that had to effectively go for “zero to one hundred” with digital, creating a brand new online operation and website, 2021 may be the time to simply get yourself up to the level of the competition.

A move to digital may have seen the emergence of new competitors too. When planning for 2021, pin-point who these competitors are and conduct competitor analysis.

4. Customer Retention

You should always have a customer retention strategy in place, but these need to be emphasized more in 2021. Just like businesses, a lot of individuals will be being more careful with their money and thinking about what expenses they can eliminate.

It’s crucial, therefore, to plan strategies to keep as many of your customers as possible. Analyzing trends and consumer sentiment, and adjusting your offerings to meet the new needs of your market will be the central part of this strategy.

Consider adding other customer retention tactics too. This could include loyalty and referral programs or discounts or other promotions for return customers. Even if these offers are just in place through the pandemic.

5. Supplier Challenges

Along with budgetary concerns relating to how many suppliers you keep on in 2021, consider the suppliers’ situations. Think about the market they are in and if they may go out of business or drop some clients themselves in 2021.

If so, will you be able to survive without this supplier? If not, begin researching alternatives so that you aren’t significantly affected by the loss of certain vendors. 

Also, plan for other supplier-related issues such as longer delivery times due to restrictions and bans of cargo shipments. Your supplier may lose suppliers of their own too, which can affect fulfillment of your requested goods or services.

When planning for 2021, think about what trends are here to stay, such as the drastic move to digital.

Making a 2021 Business Plan

Once your internal and external analysis is completed, it’s time to put your 2021 business plan together. In doing so, keep the following in mind.

Plan Around the Current Environment

The best strategy is to plan around the current environment and what you can do now. For example, a textbook publisher should focus on producing digital versions of all books and decreasing production and inventory of physical books as schools and universities are likely to stay remote.

Do have a plan in place though should things start going back to pre-pandemic conditions. In the textbook producer example, they should plan to have resources available to increase physical book production should the demand arise.

Constantly be monitoring trends as well. Even if things return to “normal” sooner than you thought, use research to predict how many of the changes caused by the pandemic will stay for the long term.

For example, grade schools may go back to paper textbooks, but university students may stick with digital for good. This means that the textbook producer’s print output will go up but won’t go back to pre-pandemic levels, maybe ever.

Have a Multi-Plan Approach

As discussed earlier, it will be beneficial to make a few plans for the year ahead. This will avoid you being disadvantaged if conditions don’t progress as predicted. When taking this approach, you could cover a range of predicated scenarios. Or, simply consider a likely, best, and worst-case plan.

Your “likely” plan would incorporate government and scientific predictions of Q1 and Q2 of 2021 being similar to the current environment. Then,  getting closer to pre-pandemic conditions due to vaccine roll-out in  Q3 and Q4.

Your “best case” plan would assume this return to pre-pandemic conditions occurring sooner (in Q2 or even late Q1). The “worst-case” plan would see you creating a plan for the whole of 2021 exhibiting the same conditions as most of 2020.

Be Proactive in Adjusting Plans

Do make sure that you're prepared to be proactive in adjusting plans. You’ve probably adjusted start of year plans before based on changes you did not anticipate. Of course, 2020 being the primary example of this for most.

To succeed in 2021, you’ll need to continue to exhibit this type of proactivity. Keeping a close eye on the current environment and future predictions as they change, adapting your plans in parallel.

Create a Disruption Preparedness Plan

Planning for 2021 is the perfect time to also create a framework for future disruption. Many things could occur in the future that will uproot your business as the pandemic did.

While specific planning is not possible, have a plan of attack for any other disruption so you are more prepared and more likely to survive and even thrive under those conditions.