In this episode of #TheMoneyFactor, CEO Ian Varley discusses how to prepare to grow your small business in 2021. Watch the video or read the transcript below.
Obviously 2020 has been a very difficult year for many companies and the uncertainty that the pandemic has caused has really put many companies into a tailspin and forced many more out of business. Those that are around and are surviving have found that it’s important to stay extremely close to the planning and development of their business. Maximizing their cash flow and sticking very close to exactly what’s happening on a day-to-day basis.
1. Pivot for 2021
In order to grow your small business in 2021 you have to prepare to pivot. 76% of businesses this year have had to pivot in one form or another, and a further 73% of those businesses say they will have to pivot again in 2021. What does that mean? Well, they have made some significant changes to the way they do business. Whether it is a new product area, selling PPE equipment for example, changing their pricing, or getting rid of customers. Something significant has changed in their business that’s enabled them to survive firstly but hopefully thrive and take on more business and more customers.
So, don’t be afraid to make those tough choices in 2021. They’re going to be necessary. Undoubtedly, we are probably going to be facing a period of uncertainty for certain but maybe a period of recession for some time. So again, making difficult choices and changes is the name of the game right now, unfortunately. Don’t hold back from those.
2. Adjust Your 2021 Business Plan
Business plans are not a vestige of the past. They are necessary to keep your small business growth on track. If you had a business plan and it worked for you in 2020, that is great. You’re definitely going to need to change it for 2021. It’s time to get it off the shelf, dust it off, and look at what are your plans. What worked? What didn’t work this year? I’m sure a lot didn’t work. There will be things that you found did, so it’s important to build on that.
Find a Financing Option That Fits Your Business Plan
Make sure you have the right business partner in terms of funding for next year. This is key to your business survival. Look at the different options that you have. If your bank is still with you and supporting you, even though you may not be doing as well as you hoped, then that is fantastic. You have a great partner there. If however, like many companies you are breaching covenants or having problems with your bank line of credit, it’s time to look at an alternative.
Alternative Business Financing
I would urge you to consider factoring if you have commercial receivables. Invoice factoring companies can weather this storm with you because we understand what’s going on in the marketplace. We help companies across a wide range of industries. Some are doing well right now and some not so much. For the small businesses that are hurting, there are tools that we have like over advances or fee reductions that we can bring into play that’ll help cushion some of the impact of those issues.
3. Diversify Revenue Streams in 2021
Another thing to consider is to diversify your revenue streams. Don’t hold back from building new referral partners and pushing your sales pipeline. It’s important to keep that growth going and look for new avenues to get business. Client referrals and customer referrals are a great source of new business. Don’t be afraid to ask for a client testimonial. They are really what new customers that haven’t done business with you before are wanting to see. Everybody likes good testimonials. A bad testimonial is not necessarily a bad thing either if you react to it in a positive way. So again, with your revenue streams, focus on which areas you can drive, which ones may not be working so well, and which new areas you want to open up.
4. Improve Your Small Business Cash Flow for 2021
Improving your cash flow is vital. It’s crucial now more than ever that you have the right lending or funding partner supporting your business. 81% of businesses in a recent survey found that managing their cash flow is their top priority. So, I can’t stress enough having the right solution is really the way to go. A flexible funding partner is important. If you have somebody that is not flexible or not able to deal with bad news, they’re not the right partner for you. Right now, you need somebody that’s ready to pivot with your business.
So, with all the effort that you’re putting in to find new revenue streams, when one takes off that partner has to be ready to support you with those growth plans that will come through. Consider what options you can qualify for and how much you financing you actually need right now. Those are all things that should be going through your mind at the moment.
How Can You Grow Your Small Business in 2021?
So, in summary, be ready to pivot. 2021 is going to have new challenges. We don’t know what they are right now but be ready for them. Be ready to make significant changes as needed in your business and take those tough decisions. Maximize your revenue stream and get a flexible funding partner. These four steps are simple, but that does not mean they are easy. Small business growth is always a challenge, and growing your small business in 2021 is no different. If you have any questions, I will be more than happy to talk to you about them here at Eagle Business Credit.