Many of us will be glad to see the back of 2020. What a year it has been! Even if you were one of the fortunate few who managed to thrive, it was a roller coaster… and 2021 is likely to be as volatile. Regardless of whether an effective vaccine is around the corner, our economy has taken a massive hit, while fortune tellers are going out of business trying to predict the global political landscape. Businesses are grappling with reduced demand (less money to go around), unreliable or disrupted supply chains and dramatic digitisation.
The world is different now, so we need to do business differently. If there is one thing that the pandemic has taught us, it’s that you can’t predict the future, but you can prepare for that unpredictability.
It’s time to take out that business plan, dust it off, and do some practical, flexible planning. There are 3 core elements of the plan that business owners should revisit, to get fighting fit for the new year.
Which stage are you?
A typical market cycle is circular: introduction, growth, oversupply (decline) or recovery (new introduction). Each business will find itself in a particular stage at any given time. So, regardless of which stage your business is in currently, it is inevitable that this stage will end, and the next stage will start.
Harry’s High Street Coffee Shop may be in a decline due to the lock-down regulations, but Piet’s Pizzeria has grown dramatically due to their free delivery service. Harry must change his business model to adapt to social distancing and a reduced market if he is to move into recovery. Piet was well placed initially to respond to the high demand for deliveries, but other food outlets are now offering the same service, which may result in oversupply. Hence, Piet cannot afford to be complacent and he also needs to plan how he will handle this increased competition.
How will you prepare for the next stage?
Market your business regularly, consistently, and innovatively.
Marketing often slips to the bottom of the to-do list because there are always other more urgent tasks. However, the simple truth is that if you want new customers, you must attract them! Make it your top New Year's resolution to hire a marketing expert or invest the time to create a marketing plan on your own and follow through.
The 5% Rule
The rule of thumb is that you should spend 5% of your sales revenue on marketing. Your marketing budget refers to all costs for marketing, advertising, public relations, and promotions including Google Ads, social media, print, sponsorships, collateral and samples. Arguably, now is the time to increase your marketing budget, especially for digital campaigns.
Find new ways to engage with your customers
Plan to interact with your customers in ways you’ve never tried before. All businesses are clamouring for their share of a much smaller pie – be creative! For instance, team up with other small businesses to offer an innovative product or service bundles; get more active on social media; create and share interesting content online; try quirky competitions; start a BackaBusiness campaign look for ways to surprise and delight customers to get them talking about you.
E-commerce is booming and this trend is here to stay. Plan how you can successfully reach that huge online audience.
Start with creating a high-quality website for your company. Have images and text that make the reader curious to learn more about your business and your products. If possible, promote your products or services online through your company website or via social media pages. Watch Mike Said for great tips and tricks.
Just as e-commerce is here to stay, so is remote. Most predictions are that the new world of work is going to be a hybrid of virtual and physical. If your business is not suited to being online or remote, research and critically examine processes within your business that can be performed remotely. Identify the software, programs, and other tools your business will need to stay relevant and productive. Watch Nicci's 5 Reasons to Start Right chat.
Plan to offer work-from-home opportunities where feasible, it may well save you on rental costs and allow for greater flexibility, while providing online or delivery solutions to your customers will help keep you relevant in the 4th industrial revolution.
Instability and economic aftershocks are going to take their toll on your business’ financial performance. Tight reigns on expenses and judicious investment in sales-generating activities will be the order of the day.
Step number one is re-examining your budget.
- Where can you possibly cut expenses? Analyse where your money is going and whether it is contributing towards sales generation?
- Consider your employees – is everyone being effectively utilised?
- How can you use technology to improve efficiency and productivity?
- How can you increase revenue and most especially - cash? Cash is king and cash is generated by customers, so incentivising customers to pay quickly must be a priority.
Building a financial cushion for the inevitable lean months may mean the difference between surviving, thriving, or becoming another statistic in 2021.
Download your free Change Gear Handbook to help you navigate a shifted world.