The thumbnail version:
- 2021 is difficult to plan for.
- Try a different approach.
- De-emphasize traditional budgeting
- Set a series of small goals.
The full version:
So now we’re approaching the middle of January and you’re looking ahead to 2021 wondering how the year is going to unfold particularly with regard to COVID-19. For most of the country it’s not looking too good right now.
So given these circumstances, what do we do about projections, planning, and budgeting for the year? Whether you plan at the beginning of each year in the traditional way (strategic plans and a budget) or don’t plan at all (fly by the seat of your pants like so many other small businesses), this year requires a different approach. We’re in uncertain, unpredictable times, at least in the short term. Trying to budget in detail based on an unpredictable short term future may be a waste of time.
Ben Taylor, co-founder of the British knitwear brand, Country of Origin, has an interesting approach you may want to consider. He says they set short-term goals as opposed to detailed budgeting. They work towards growing the business by setting goals for the year for sales and campaigns. This, he says, organically amounts to growth.
Another point to consider is that since most small businesses operate in a fairly informal way, setting a series of smaller goals is likely to be easier to manage and achieve than a few grand objectives built on uncertain projections. A series of marginal gains can add up to overall success.