As part of your annual business planning efforts, you need to be starting the process to looking at 2020 and sorting through the information to plan for the next cycle of business. Yes, 2020 was in no way shape or form normal. Planning for 2021 is going to require special attention and time. The amount of change which took place so far in 2020 will have a carryover impact on 2021 so start your review and planning soon.
For some framework to help guide you in your evaluation of 2020, think in terms of a marathon and not a sprint. Both are sporting activity which are done by runners but typically they train very differently and get different outcomes. Your business needs to look at the nature of which type of runner you and your industry play in.
Using the acronym RACE – you should look at the following elements of 2020. R- Results, what results did you plan on having and what were the actual end results. A- Actions, what specific actions were taken (or not taken) to contribute to achieving those targeted results. C- Challenges, what were the challenges which presented themselves that either enable better results or derailed the progress toward achieving the results. As part of challenges, consider how fear of the unknown played into the actions taken and results achieved. Finally, E- Evaluate, looking at all the data points dig deeper than the obvious and understand what really took place. What influence you had over the outcomes and which were the results of things completely out of your control.
For example, the COVID-19 pandemic shut the economy down which none of us had direct control over. In some businesses this had a direct impact on lowering results. Revenues were down and not all expenses were minimized. Government support systems contributed but how did those impact the results. In other businesses, the support systems contributions along with being an essential business actually gave the business a direct economic boost not planned for in the prior year’s plan. Those results would not have been achieved under the original planned conditions.
As you can see, each and every business was impacted uniquely. Therefore, each of us need to plan differently. Rolling over of the previous year activity and expecting more by pushing or doing more likely won’t be a strategy just more of a reaction. Yes, that is the planning process of some businesses. Taking prior year numbers and arbitrarily coming up with a desire percentage increase and letting the spreadsheet run a new set of numbers. I would not be supportive of such a play on numbers for any business.
The planning for 2021 is not a 100 meter sprint nor a 26.3 mile marathon but somewhere in the middle depending on the nature of your business, the level of data you collect and the commitment you have to the process.
One thing is for certain, those businesses who had a detailed plan and solid economics coming into 2020 are faring out far better to those that came into 2020 flying by the seat of their pants. We are all in restart mode. Even if you have never taken the time to plan out your business objective in the past. Now is a good time to start planning for 2021.
Need support for crafting your 2021 strategies and business plan? Want to engage a promise guide to help get your compass pointing in the right direction? Give us a call at (313) 527-7945 in Michigan or (407) 984-7246 in Florida to start the conversation.