The COVID-19 pandemic has made 2020 a difficult year in terms of health and wellness, shifts in everyday activities to minimize risk of contagion, and resultant economic impacts. Businesses have been forced to make major adjustments to keep their operations, employees, and customers safe, and decreased planned revenue have led to lost earnings, jobs, and other unfortunate circumstances.
No one knows when all COVID-19 restrictions will lift and the economy can return to normal, but business owners would be smart to start preparing for how they’ll move forward when it does. While there is never a one-size-fits-all approach to long-term planning, there are a few key steps you can take related to cash flow, business goals, and tax challenges. Here’s where to start.
Reassess Big-Picture Strategic Planning
It’s the perfect time to reassess all aspects of your business. Your benchmarks will likely need to be adapted to the new pandemic economy, for example. Start by working your way from the bigger picture inward.
Ask questions like:
- Has your mission changed because of the pandemic?
- Who do you serve?
- How have your customers been impacted by COVID-19?
- Have your customers’ needs changed?
- Have you been able to retain or gain new customers?
- What’s getting in the way of attracting new customers?
- How is the shift to remote work impacting your employees and customers?
This exercise will help you create a more adaptable, realistic plan for your future by getting you thinking about how your company can better provide its products or services in the time of COVID-19 — and beyond. You may have to adapt your purpose or the way you work with customers to meet changing market demands, so your best bet is to keep your mindset flexible.
5 Steps To Post-Pandemic Planning for Business Success
Once you’ve addressed the big picture, it’s time to narrow your focus and assess how each business function can achieve your desired outcomes. Here are a few things you can do to get your team headed in the right direction.
1. Create a Financial Plan
Finance is one of the most important aspects of your post-pandemic plan. Start by assessing where your company stands right now:
- What are your company’s assets?
- Which expenses have changed?
- What has caused changes in income?
- What are creative ways you can address those changes?
The answers to these questions give you a baseline as well as an indication of which aspects still need to be ironed out.
Another point to consider is your tax liability for 2021. Keep in mind that:
- Your tax filing process and return may look a lot different this year if income has changed.
- New provisions were recently introduced, such as employment tax deferral options and employee retention and payroll tax credits.
- Getting your taxes under control and knowing what to expect in April 2021 means you can plan how your numbers will look next year and beyond.
A tax professional can help review your accounts and post-COVID strategy to ensure your plan is based on the right assumptions.
2. Reassess Your Business Model
You may find that your business model needs some updates amid your financial and big-picture assessments. You may have been operating with different staff levels or cash flow for most of 2020, thus limiting your production and what you can provide for your customers, but now is the time to map a way forward.
You really have three options:
- Plan for growth
Has the pandemic created more opportunities on which you can act? Are you on the path for expansion?
- Plan for more of the same
Post-pandemic, can you pick up where you left off?
- Plan for downsizing
Do you need to narrow your scope? Does it make the most sense to close offices or cut staff?
You may start out thinking one thing, but your review may reveal that it makes the most sense to move in another direction entirely. Be flexible and willing to adapt your business model to what the market is telling you.
3. Create a Timeline
The unknown trajectory of the coronavirus makes it nearly impossible to create a business timeline, so you’ll need to do your best with what you have and what’s already happened this year. Here are a few tips:
- Start to plan for milestones you want to hit in 2021.
- Base your projections on the last few months.
- Allow plenty of room for flexibility in your timeline if COVID-19 continues to impact the economy throughout the year.
- Always have a plan B, just in case.
- Create realistic goals for both the near future and the long-term.
Ask yourself: What are some small steps we can take now to put us on the path to growth? Doing so may help you uncover options you haven’t yet considered, which could lead to a big payoff.
4. Reengineer Your Processes
Part of strategic planning is reevaluating your efficiency and operational structure. Assess vendor relationships and areas in which you can save money. Identify weak points in your processes so staff can be trained or additional resources can be provided.
Get rid of any process or cost that’s not directly serving your business’s purpose. You need to ensure the business will come out of the crisis stronger, and that may mean trimming unnecessary activities.
5. Use the Right KPIs
Business metrics tell you where your company has been, where it is now, and where it could be in the future. These numbers should guide your strategic planning, helping you make fact-based decisions.
- Key performance indicators (KPIs) give you valuable insight.
- Make sure you’re tracking cash activity, labor productivity, customer satisfaction, and customer retention rate.
- These are universally accepted guides for determining a business’s well-being.
Implement a mix of external and internal measures, and evaluate industry benchmarks to get a sense of your place in the market.
Work with the Professionals for Post-Pandemic Planning for Businesses
One of the most effective ways to create a strong business plan and put it into action is to work with a professional for guidance. Business advisers can ensure you’ve looked at your strategy from every angle. Tax professionals can help you plan for one of your biggest annual expenses and liabilities.
When you need assistance planning for the future, work with the experienced tax attorneys at Silver Tax Group. We guide clients toward answers to big-picture questions and handle tax issues that play a role in strategic planning.
Contact Silver Tax Group for a consultation.