Is a business review of 2020 really worth it?

Annual review

Usually at this time of year, business owners pause to reflect on the year just gone. They consider the highs, lows, successes and failures. Standing at the top of the calendar year provides a sense of clarity and offers a glimmer of hope for a brighter future.

As we brace ourselves for the year ahead, we already know that parts, if not the whole of the next 12 months will still be overshadowed by COVID-19. This knowledge is the first step in remaining realistic.

So, with that in mind, is it still worth stopping to look back on 2020? Or should it be isolated and written off as a year where business obligations and opportunities weren’t able to come to fruition?

The answer is simple, and regardless of the events a review at this time is still an important and crucial task. By looking back, it creates a new starting point in which to decide the most effective course of action and direction to take your business.

By conducting an annual stock check you form a virtual picture of where you might have veered off into unknown territories as a cautionary reactive measure to help weather the virus.

Taking stock

2020 will serve as one of the most bizarre in modern history but it’s from the strange we tend to learn more about ourselves and our business acumen. The bleakest moments in time often gives us a better chance to gain greater perspective.

The fact-finding process of taking inventory is crucial to assessing the state of the business. It allows us to go forward, learn from mistakes and identify areas of weakness. A business that doesn’t take stock will not last very long in a world full of unpredictability and unknowns.

But to carry out the end of 2020 review, business owners need to make adjustments in their thinking. Considering a set of questions to determine which areas should be surveyed and what impact the findings might have on the year ahead. Reacting to the problem is one way of doing business but remaining reactive is a proven method of sustainability.

Operations

Were your risk assessments up to par? Did you carry on operating as usual or did you make procedural changes? How might the business be tailored to suit a year which is still reeling from the impact of COVID?

When reviewing operational concerns, the aim isn’t to get into the detail of how the virus affected your business but to examine how your operations dealt with the problem. Turning the situation on its head allows for a more fluid approach, it removes the cause and focuses on the solution.

It is doubtful a global pandemic would have been at the top of anyone’s risk register. But 2020 has served as a reminder that nothing should be discounted. To offer protection a comprehensive look at unforeseeable risks combining mitigation and contingency plans should be incorporated into assessments for 2021.

Money

What is your current financial position? How was your capital affected in 2020? Are you able to continue trading in 2021? What cost cutting exercises need to be applied?

Monetary questions are often the hardest to review because they provide an instant status of whether the business has a future or not. But to continue all must be answered. When falling on hard times bad financial management creates unstable foundations, something which will halt success in 2021.

Comparing like for like against quarterly performance is a useful way to determine at which points the business made a profit or a loss. This process is particularly easy if VAT registered. Otherwise, a look at your current bank statement will show the exact figure of what you have to work with for 2021. If struggling, identify possible cut backs or consider other means of obtaining money such as a loan or a partnership might help sustain the business.

Staff

How were staffing levels affected? Will you have to lay off staff heading into 2021? Can you proceed with staff working from home? Are your employees getting the necessary support? Do you need to source serviced office space to aid collaboration?

Within a turbulent economy many companies have made difficult choices between staying operational and reducing numbers of staff. The decision-making process is not easy and has long term effects on continued operations and staff morale.

For those that remain, the way in which they work needs to be reviewed and streamlined. With most employees working from remote locations, they require tools and support to ensure they remain productive. Heading into 2021, remote working is set to become the norm. Now is the time to start utilising digital capabilities to improve efficiencies and help to reduce costs.

Products and Services

Are you able to deliver the same products or services? Will these need to change in 2021? Do you need to cut back or change what you offer? How have supply chains been affected?

Due to government restrictions many businesses have been forced into changing what and how they sell in order to keep afloat during the pandemic. 2020 became a testing ground for leaders to consider which of their current products or services have the ability to survive through extraordinary times. And whilst changes might have helped in the short term, they may need to be overhauled or adapted in order to meet the demands of the future.

Global supply chains were shattered impacting customer delivery timescales. Contingencies would have been formed, some at a greater degree of expense. However, in 2021 these temporary measures may well reverse opening wider opportunities to strengthen and sustain better long-term mutual relationships.

Business Owners

How can you proceed? What plans do you have for your future? Might you need to consider new ways of managing stress? Or changing business direction completely?

The review process also applies to yourself and whilst this may not be obvious, it is worth taking an honest look of how you are doing under the current circumstances. Our mental health, regardless of its origins before COVID has been hugely affected. As a leader you need to be at your best to weather the storm and beyond into the new year ahead.

The world is more open to mental health than ever before, it is becoming a recognised issue and something which is being openly discussed. At times everyone needs support to overcome difficulties and by accepting there might be an issue is a valuable starting place. Additional training or utilising meditation techniques may provide a simple route in managing the day-to-day stresses of 2021.

Look but don’t stare

When contemplating a review our biggest piece of advice is to ‘look but don’t stare’. By this we mean tackling the task as an overview not as a deep dive. Spending too much time pouring over the negatives will only get you down. Let’s face it 2020 has been a disastrous year for many. Instead focus on what you did right rather than what you did wrong.

Begin by working out how you want to proceed. You have the option to review month by month, in quarters, splitting the year in half or taking a look at the whole year. The choice is yours and yours alone. The main point is to understand your current position, learn from the past and apply this going forward.

Conclusion

At the stroke of midnight, the world isn’t going to fix itself and get easier. Until the vaccinations have been rolled out the country will still be at war with COVID-19. And whilst you may be wanting to plough on ahead, the biggest takeaway from 2020 is that things have a habit of changing and quickly.

Go slow and don’t plan too far ahead. It’s not wise to make big decisions whilst in the midst of a crisis. Instead review areas of your business and create a realistic plan for moving forward. From all at Halcyon Offices we wish you a prosperous, safe and successful 2021.