How can you prepare for the weeks and months ahead? Right now, it’s difficult. That’s why, Finance Director, Helen Fleet, joined us to share 10 questions that business owners should be asking themselves as they head into 2021.
1. What do you want from your business?
Time out or a slowing down of work last year has given some business owners time to really think about what they want. How many hours do you want to spend working, how much income do you need and what really drives you? This has sparked thoughts with our clients on succession planning and personal work life balance.
2. How long do you want to run your business for?
With little spare cash around, pension payments may be something you have had to pause in 2020. Think about when you want to finish work and speak to an IFA about your plans. Financial advisors have some great tools to map out current pension payments and projected retirement income. Even if you can’t meet those payments now you know what you need to work towards.
3. Growth or Maintenance?
After twelve months of uncertainty, what do you want moving forward: – a return to where you were, a smaller leaner business or growth on your pre-pandemic position.
4. What will your business do?
2020 may have meant a change in your product or service offering- is this temporary or has this put your business on a more stable footing with a broader offering. Think about your service and client mix how this has changed and how you want to build from here.
5. How will your business be structured- office or home workers?
I think the office is crucial for team building, knowledge sharing and employee development. We all accept a hybrid model is probably more likely moving forward so how will you structure this – hot-desking, a permanent but smaller office space.
6. How will your employees be supported if they are home-working?
Do they have the space and the right equipment to be homeworking? Not everyone has space for a home office and how long will the lack of commute outweigh working from a bedroom. Consider how you will ensure team working continues, how knowledge will be shared and how any new employees will be onboarded.
7. Is your business profitable?
Given any changes in product offerings, is this work more or less profitable? Have the changes above had an impact on how you deliver your product or service? Do you have visibility of which work or client is more profitable?
8. How are you managing cashflow?
Chris Whitty said there may be further restrictions next Winter – what would this mean for your business. Cash reserves took a massive hit last year so do you have anything left for a bad month? Can you restrict spending for the next few months to build up reserves?
9. Do you know your cash position?
There are still some government support packages in existence and decisions to be made over the next few months. Do you need to use the flexible furlough scheme between now and the end of April? Did you defer your Vat last year and are you going to repay this in one go pre-March or take advantage of the ability to pay by instalments? If you took out a CBILS or a Bounce Back Loan are you going to repay over the next five years or take advantage of the extension available and repay over 9 years.
10. What are the non-work things you have enjoyed about 2020- can you make time for more of them?
I hope that it hasn’t been all bad. For all the grimness that we have lived through there have been moments of joy; – extra time with family, time for walks, new hobbies maybe, zoom quizzes. Give some thought to the things you never usually have time to do but have done last year. Life is not all about work and if we can all find more time to do something joyful then we can at least take something good away from 2020.
Need help with your finances?
Helen Fleet of HF Financial Strategy works as a finance director and guides companies to delivering their financial and business objectives which can include cashflow planning, pricing reviews and ways to improve profitability.