In 2020, many businesses confronted challenges they had never seen before. Therefore 2020 became a year for resilience and adaptation, and the lessons learnt during 2020 are expected to continue to shape businesses in 2021. There are still many unknowns heading into 2021 and businesses will need to continue being flexible. Five business trends expected for 2021 are outlined below.
Cash Flow Forecasting
The phrase ‘cash is king’ has been more apt in 2020 than ever before. This will continue to be the case in 2021. Cash flow forecasting is not new, but the analysis and regularity of cash flow forecasting has increased and is expected to continue in 2021. Government subsidies are due to cease in 2021 and loan ‘holidays’ provided by banks will also discontinue. Consequently businesses need to ensure they have adequate funds to pay all their debts as they become due.
As part of cash flow forecasting, it is ideal for businesses to have some surplus funds set aside. Most spare cash is typically put straight back into the operations of the business. However 2020 has taught us that things events may occur which are out of our control, and happen quickly, and it is important to have access to additional cash if required. The amount required is specific to each business and your accountant can assist you in determining how much you need.
Building Business Relationships
The phrase ‘we are all in this together’ was very popular with politicians during 2020. However, it was especially true for businesses as well. Business owners, suppliers, customers and employees all had to work together to get through 2020. This goodwill generated in 2020 has led to many meaningful long-term relationships, and it is important that these business relationships continue to be fostered in 2021. The stronger the relationship the more likely people are to be loyal, trusting and forgiving.
Having a Digital Presence
Ecommerce has been a big thing for a long time, but many businesses have not had a huge need for it. That all changed when customers could no longer leave their houses. Online sales went ‘through the roof’ in 2020. This is expected to continue in 2021, especially with the ease of entry into ecommerce.
In addition, online marketing is also expected to continue to grow with customers wanting the ability to shop and research products and services from home.
Employees and employers went through much together in 2020. What shone through was the empathy generated and the flexibility provided. Remote working and flexible working hours are expected to power ahead and continue in 2021. While the numbers of employees working Monday to Friday, 9am to 5pm, is expected to continue to decline. Employees will continue to work 40 hours a week but not in the same manner or same conditions as previously.
Adoption of cloud technology has made the process of remote working much easier. The ability to be productive anywhere and at any time makes sense. Cloud technology is also expected to continue growing in 2021.
Business Continuity Planning
A business continuity plan is a set of strategies designed to keep your business running through the duration of a disruption (such as from fires, floods, the loss of customers, or a pandemic). Most business owners know they should have a business continuity plan, but they do not. As a result, when the pandemic hit, business owners became busy trying to put a plan in place rather than actioning an existing plan.
Having a business continuity plan allows you to adapt quickly when an unforeseen crisis occurs. After 2020, it is not hard to see why business continuity planning is expected to be at the forefront of the priorities of many businesses in 2021.
Please contact your local Accru advisor should you wish to discuss any of the above.