The 2020 worldwide coronavirus pandemic has deeply affected small businesses across the U.S. As entrepreneurs scramble to stay afloat or rebuild, the new year is rapidly approaching. There are business strategies you can use to prepare for 2021 and its challenges.
Analyze financial statements
It’s paramount that you understand where your company stands financially, especially if you’ve experienced a drop in revenue. Compare your business financials to prior years so you have a global view of where you stand. It’s a best practice to work with a financial professional to help you crunch the numbers. The Small Business Administration suggests that you review the following:
Profit and loss statement
A Profit and Loss (P&L) statement measures sales and expenses during a specified period of time. The function of a P & L statement is to total all sources of revenue and subtract all expenses related to the revenue. Review this article to help you get started if you don’t have this statement updated and in place: Business Profit And Loss: Tips To Prepare Your Statement.
Cash flow statement
A cash flow statement tells you how much cash is entering and leaving your business. Find a template to help you prepare this important document here: Cash Flow Templates in Excel.
This document provides a snapshot of a company’s financial health at a specific point in time. You can use them regularly to see your business’s net worth and to provide lenders with an idea of how much you own, debts owed, and how much you invest in your operations:
How to Create a Balance Sheet for Your Business.
Revisit last year’s business goals and adjust your business goals to address your unique business as it stands now. Work to set goals that are realistic and attainable.
If you don’t usually set long and short-term goals, now is the time! Our article, Tips to Help Set Business Goals, outlines the SWOT (Strengths, Weaknesses, Opportunities, Threats) method to get you going.
Review customer feedback
Do you have online reviews or a low-tech suggestion box? Your day probably moves at lightning speed but reviewing feedback now can help guide your customer service, inventory offerings and more. If you don’t have a review collection system in place, consider incentives for customers to post on sites like TrustPilot, Google Reviews or Yelp. It’s even more important than ever to engage with happy customers or address any issues that arise. If you don’t have a robust collection of positive reviews, our post can help you get started: How to Get Customer Reviews for Your Business.
Check your work/life balance
How do you feel physically and mentally? Almost everyone is feeling burned out, exhausted and overworked. You might be facing declining sales, health issues, or employee staff reductions. A good strategy is to review your day to see if there are any tasks you can cut down, eliminate, or delegate. Physical fitness goes a long way towards a feeling of wellbeing. Most people can fit in a short walk or bike ride each day to get their heart pumping.
Check out our blog post 4 Essential Tips for Avoiding Burnout as a Small Business Owner for actionable advice.
Employee reviews and appreciation
Unless you’re a one-man-show, you probably have employees who help you run your business successfully. Now is a great time to do an annual review with each. Your employees may be facing additional work due to staff cuts and letting them know where they stand can boost productivity. There are dozens of ways to review an employee formerly or informally.
In addition to offering salary increases or bonuses, a holiday gift can be meaningful. We have suggestions on our blog here: Employee Holiday Gift Ideas for Small Business Owners.
Consider professional freelancers
If you have tasks that don’t require a full time, salaried employee, or if you’ve had to eliminate those types of employees, consider hiring a freelancer or contract employee. Freelancers can perform tasks like marketing, SEO strategy, accounting, public relations and more. Check out this article for more information: Hiring Help: Do You Need an Employee or Independent Contractor?
Explore giving back
Giving back to your community or a national organization is a great way to elevate your profile and help a cause you believe in. Whether supporting a local school or sports team, donating to a non-profit organization or collecting items for the needy, you can make a difference. Look into organizations that support struggling small business owners if you’re able to contribute.
Put a communication plan in place
There are two types of communication to pay attention to during this stressful time. Have a plan in place for clear discourse with employees and customers. Customer communication can include social media posts, blog articles, newsletters, or website messaging. Be honest about the crisis your business is facing. Be honest and open about the challenges you are facing and how you are addressing any problems. Review our article, Small Business Communication To Ease Anxiety in Times of Crisis, for actionable advice.
Follow news regarding small business relief programs/grants
Although the Paycheck Protection Program has ended this year, there is another stimulus package being debated in Washington D.C. Pay attention to available programs, their requirements, and deadlines. In 2020, the SBA provided fully forgivable funding for small businesses who cover allowable expenses. It’s expected that a similar program will be put in place with the new administration.
Additionally, there are a number of grants available. Do research to determine if there is a grant serving your business type. Read Small Business Financial Help: 4 Insider Tips About Small Business Grants.
Look into outside financing
Pull out your business plan and revise for the upcoming year. You might need to cut back on expenses, adjust staffing and more. Low-cost outside funding can help finance growth initiatives.
The first step is to determine how much you need. Work with a financial professional if you’re not sure. Next, look at your credit scores. This is key to get low cost funds when you need them.
Consider an SBA loan
An SBA 7(a) loan is known as the “gold standard” in small business loans and is available to qualified small businesses during the pandemic. If you meet the criteria, an SBA loan has low rates and a 10-year term. Visit the SmartBiz Loans website and enter requested information here to explore your options.
With research, planning, and creative strategies in place, you’ll be well positioned to face the challenges of 2021. The SmartBiz Small Business Blog is full of resources to help you succeed covering topics like marketing, staffing, credit scores, lending, and more.