2021 Small Business Planning

Wow! 2020 threw the economy for a loop with small businesses taking the brunt of the downfall.

However, this year is rapidly coming to an end and there are strategies entrepreneurs can take to enter 2021 with rebuilding plans.

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SmartBiz Loans provides low-cost funding for business owners across America. We recently spoke with a financial professional on our team to assess how customers are handling their business and planning for regrowth.

Chris reports:

Like many of us, the biggest challenge is the uncertainty. For a small business owner, this makes it difficult to plan, budget, and communicate with employees, customers and suppliers. But listening to stories and hearing first-hand the resilience and passion of the average small business owner is encouraging.

Chris continues with suggestions for entering the next quarter:

The most universal strategy is simply cutting back and reigning in as many expenses as possible. Unfortunately, there is a large percentage of business I see that have had to cut employees. Employers have had to dive back into the day to day operations, cover shifts, and keep their own books to ensure they stay lean. After a long period of economic growth, business owners are having to go back to basics; with my hope that many of them will come out the other end stronger for it.

Here are items you can explore for next year’s planning activities.

What is small business planning?

"A business continuity plan is an essential factor of a small company’s long-term success and will contribute to the community’s economic recovery in the aftermath of a disaster.”

These are the words of Maria Contreras-Sweet, former Administrator, U.S. Small Business Administration. The SBA reports that roughly 40 to 60 percent of small businesses never reopen their doors following a disaster. Business interruptions, even short ones, can cost you big time in terms of lost productivity and profits.

Business planning starts with a solid business plan. You’ll have to adjust for the new normal in your industry but you’ll be ahead of the game. To get started, follow these steps:

  • Research, research, research
  • Determine the purpose of your plan
  • Create a company profile
  • Document all aspects of your business
  • Have a strategic marketing plan in place
  • Make it adaptable based on your audience
  • Include financial projections

A financial plan is basically a road map for your business. One important reason to create one is to present to lenders who require it. (Note: SmartBiz Loans does not require a business plan to apply)

If you need help getting started, we’ve outlined key elements here: The Ultimate Guide to Business Plans.

A best practice is to include the economic impact on your business. Here’s a guide to help: Disaster Planning for Your Small Business.

According to Harvard Business Review, entrepreneurs who write formal business plans are 16% more likely to achieve viability than otherwise identical non-planning entrepreneurs


Perform a SMART analysis

The goals you set, no matter what financial shape your business is in, should be SMART goals - specific, measurable, achievable, relevant, and time-based. Here’s a breakdown of steps to follow before 2021 or early in the year.


Instead of simply “cutting costs”, a specific goal could be “reduce facilities expenses by 10% over the next 3 years.” Instead of “increasing profits”, put a number on it like “increase sales by 15% this year”.


If you’re not measuring, you won’t know where you stand and your progress can screech to a halt. For example, one of your business goals might be to increase website traffic by 10%. Measure metrics like page views to determine if you’re on target or need to adjust.


To make goals achievable, you need to be aware of your limitations. Do you want to add 20 more products? This won’t be attainable unless you have working capital available to purchase inventory and the employee support to manage it. Be realistic and take cash flow, employee numbers, and your own bandwidth into account.


A goal like “increasing Facebook fans” is fine. However, relevancy is tied to the “why” of a goal. If you simply want more fans because that’s what your competitors do, that’s not enough. A relevant goal would be to increase Facebook fans to highlight new products, advertise a sale, or up engagement with your current or potential customers.


This quote from time management expert Diana Scharf sums it up: “Goals are dreams with deadlines.” Don’t end up discouraged by setting an open ended goal. Instead, try to accurately estimate how long it will take you to reach that goal. Not setting goals has been compared to setting sail on a ship without a destination.

Adjust your budget

Your first step is to learn all the components that comprise a business budget plan, which include:

  • Your income and income sources
  • Your fixed costs, which don’t change each month
  • Your variable costs, which are paid every month but the amount changes
  • Your predicted one-time purchases, such as new equipment

Before you learn more about each of these categories, you should understand what separates the money your products and services bring in from the money you’ll keep.

Here are some short-term, actionable budgeting tips to help business owners stay afloat, and ideas on how to set a small business up for long-term financial success:
Small Business Budgeting Tips for a Crisis.

Outline different strategies

You should have strategies for both current and potential customers or clients. Tactics to reach those unfamiliar with your business include traditional advertising, public relations, search engine marketing, and social media promotions. To reach current customers and spark more sales, you can employ strategies like email or newsletter blasts, customer loyalty programs, special sales, and appreciation events. The important thing is not trying to reach all consumers.

Final thoughts

Alexander Graham Bell said it best: “Before anything else, preparation is the key to success.”

Best of luck to you, your business, your colleagues and loved ones as we head into 2021.