We are approaching a number of turns as I type this post at the end of December: a Presidential administration turn, a turn toward mass vaccination, and of course, the turn of the year.
To coin a phrase, for the first time ever, hindsight will truly be 2020. I could go on for hours on any of the three points above, but because this is a personal finance blog, I’m going to dodge those turns (that was for all you fencing enthusiasts) and talk about the turn from year-end tax planning to year-beginning business planning.
Having just completed an all-consuming tax planning season with our clients, we are all ready for a break in the action. Our fingers and eyeballs ache from the many 2020 tax return estimates we have run over the last four months. But as we rub our eyes and crack our knuckles, we begin contemplating what the cash flow forecasts and task achievement milestones will be like for our business owners looking ahead into 2021.
Generally speaking, business owners love to talk about their businesses, and the idea of planning for the year ahead has strong appeal–that is, until the rubber meets the road, and the task of marrying the book-keeping files (if there are any to speak of) with written goals and action steps looms large. I can hear the groans of discontent and see the eye rolls now. And after being tossed about like a rag doll in 2020, a lot of business owners will rationalize not writing a business plan on the basis of so much uncertainty. But that is precisely why business planning is more critical than ever for the coming year.
Why Making a 2021 Business Plan Matters
Thousands of small business owners are licking their wounds from 2020 and hoping more stimulus and widely-available vaccinations will make 2021 a better year. We are, too. That said, as gut-wrenching as 2020 has been, and as optimistic as we are about the possibilities the turn in power dynamics could bring, the metrics we follow tell us we have not seen rock bottom for the bond markets, and that means volatility is not going to just vanish in 2021.
Business planning is more than just writing down some goals in January and then looking back at it in December. This doesn’t mean your plan has to be complicated; it can be as simple as writing down some goals, but to make it a useful tool, it must be reviewed periodically throughout the year so as volatility increases, adjustments can be made to stay the course. Time after time, we see that the act of setting goals, sharing them with others, and then checking progress against them results in exponentially higher odds of achieving them. It’s not magic: it’s will power.
So, if you’re thinking you can take a year off from creating a business plan because, “Why bother?”, we can understand your apprehension and exhaustion. But we will argue the hell out of your logic. And if you are a client of ours, we will nag you relentlessly to get off your ass and do it. And we’ll help you, of course.