As 2020 comes to an end, and we start to look towards the new year, now is the perfect time to reflect and take stock of your business. This year has been a time of turbulence, uncertainty and change. We’ve faced a new set of challenges and setbacks as small businesses, some of us fighting the battle to simply survive.
But amidst all of the doom and gloom, it’s important we focus on the positives; to reflect on the past year’s successes and challenges, and how they’ve helped us learn and grow. How, as a small business community, we’ve responded to adversity, how that has made us stronger, and what lessons we can take from this going forward.
As we say goodbye to the year that is 2020, here’s our thoughts on how you can prepare your business for going into the new year strong.
Revisit goals
As we look to the future, what are your plans for 2021? What are your business goals and your life goals? Did you achieve everything you set out to this last year? Now is the time to reassess those goals and establish where you stand, so you can shape the way forward.
While 2020 might not have panned out the way you expected, take time to look for the positives. Focus on even the small wins, the things you’re most proud of achieving, and how they’ve helped you get to where you are today.
Despite all the challenges, we thought we’d share some of the positives to come out of our own 2020. Over the last year, we’ve welcomed some awesome new members into our team, we’ve fully embraced our remote working culture, and throwing a pandemic into the mix, helping our clients has remained our number one priority for now and in the future. This year has solidified our sense of purpose– we’ve been there when our clients have needed us the most, and this year has reminded us how lucky we are to get to do what we love every day.
With a clear view of where you stand, define the goals that matter the most to you, and create a roadmap for exactly how you’re going to achieve them.
Reassess plans
With 2020 taking an unexpected turn, and lockdown derailing many of our plans, you may not have achieved everything you set out to do this past year. How has 2020 shifted your priorities? Has it presented any new problems or opportunities? Maybe you’ve adapted your business model in response to the pandemic, or gone in an entirely new direction. What does this mean for the year ahead? Taking the time to reassess your plans and look at the most important things that have come out of 2020 will enable you to go into the new year with a renewed sense of perspective, and a clear focus on what matters the most.
Forecasting
The most successful businesses are the ones who are actively looking ahead. They always keep an eye on the horizon, with a clear sense of what their business might look like 3, 6, or even 9 months down the line.
As we step into the new year, forecasting for your business is more important than ever. Where do you want to be this time next year? Take the time to forecast the developments in your business in sales, expenditures, profits, and cash flow, and use these predictions to shape better strategies and make the right decisions going forward.
A basic cash flow template can be a great place to start for freelancers and small businesses. But if you’re looking for more high-level and detailed projections, forecasting software like Float can provide you with highly detailed, accurate and visual forecasts, allowing you to easily understand your finances and get a clear overview of the future health of your business.
Budgeting
To set yourself up for a successful year ahead, it’s important to take a proactive approach to managing your cash. Whether you choose to use a basic cash flow planner, or take advantage of intuitive cash flow software, planning your future cash position is essential for a successful and thriving business.
Create a financial plan for the year ahead to help you prioritise spending, and use your previous year’s figures to guide you. You can create a straightforward budget by calculating your total income and your total expenses, then comparing cash flow in to cash flow out to determine your profitability.
Ready to start budgeting and planning? Get started with our free cash flow planning tool.
Being on the front foot with budgeting will help you proactively prepare for any challenges and problems you might face in the year ahead. It will also make your business more resilient and adaptable to change, whilst helping you take back control.
Make bookkeeping a priority
Bookkeeping is something that’s so often swept under the rug by small businesses, done badly, last minute, or not done at all. Whilst it's certainly not the most exciting part of running a business, by a long shot, it’s something that can quickly spiral out of control if it’s not properly managed.
A poor approach to bookkeeping can cripple plans and obstruct growth. Bookkeeping is paramount for giving you a clear vision of the future, forming the basis for any projections and forecasts you do. Wrong or incomplete data will paint the wrong picture, impacting any decisions you make and potentially derailing future plans for the year ahead.
When it comes to bookkeeping, think little and often. Take a proactive approach by setting time aside for bookkeeping every month. Tools such as Receipt Bank make bookkeeping easier than it’s ever been, helping you automate data entry whilst feeding accurate, up-to-date information into your accounting software.
By getting a firm handle on your bookkeeping, you can more accurately predict how well your business will perform in the coming months, helping you navigate 2021 and beyond.
Looking ahead
2020 has been a challenging year for all of us, but it’s also provided opportunities for growth, change, and reflection. It’s been inspiring to see how businesses have adapted to adversity, responding to each new hurdle, and coming up with innovative new ways to survive and thrive.
Whilst 2020 might not have been the year any of us expected it to be, it’s given us resilience, perseverance and the ability to respond to an ever-evolving set of challenges. It’s showed us just how hard we’re willing to work to respond to crisis, and it’s given us a clear view of what matters the most. Even making it through the year is an achievement in itself.
Let’s take from 2020 what we can and head into the new year with the aim of building better lives and better businesses, of looking out for one another, of supporting one another, with a clear focus on shaping a better future.
