No matter what type of business you’re in, 2020 has likely thrown all of your expectations and planning out the window. Even if you are disciplined enough to have created a contingency plan, nobody could have anticipated exactly how a global pandemic would shake out. If you survived so far, then you’re to be congratulated. But now what? What steps should a smart entrepreneur take to address revenue forecasting for 2021?
If you’re honest with yourself, you’ll admit that when you sit down to plan for the coming year, you start with last year’s plans and see what needs to be adjusted. Though this process saves time, the system of allowing yourself to review the year past and just make adjustments for additional expenses or revenue just won’t fly this year. The world has changed, your customers and business have changed, and anticipating what the new year will bring is not as sure a thing as it has seemed in the past. You’re far better off going back to basics, as though you’re starting a new business, and assessing the economic landscape. A smart starting point would be to ask yourself the following questions:
In today’s economic climate, your most intelligent approach to planning for 2021 starts with looking at your customers and assessing which of them will be responsible for the bulk of your business. Depending on whether you are a service-based business or a product-based business, you may have a small number of clients that spend consistently or only a couple who buy in large amounts, but whichever they are, you need to gear your marketing towards them. This is even true if you are being forced to reimagine your offerings and identify new targets.
This approach is referred to as Account-Based Marketing, or ABM, and it has gotten a lot of attention, including from well-known analysts like Gartner and Forrester, who write about implementing technologies known as MarTech stacks to facilitate these strategies. Whether you decide to invest in applications and platforms or not, you can focus your approach to 2021 by keeping your focus on the following:
Each of the elements listed above represent a significant factor in your forecasting and will guide you to the areas of your business that can account for growth. This is particularly true when it comes to how you are addressing your consumer marketing, which will rely heavily on understanding how customers have adjusted their shopping and spending habits in light of the current situation. As difficult as it may feel, now is the time to step away from in-person marketing approaches and invest in digital marketing that will reach your clients where they are and show them the way back to your business.
Wanting to get back to the way that things once were is natural, but it is unlikely to happen. The changes that are occurring in our businesses will be with us for a long time, and some will be permanent. This means that you need to adjust your business strategies to accommodate change while still remaining true to your original value proposition.
When it comes to forecasting, it’s a good idea to limit your actions to what is immediately needed while still keeping your long-term goals in mind. Success in getting through the current situation is going to be measured differently than we’ve done previously, but is still focused on improving over time. See what you can adjust to eliminate costs without short-changing expenses that may help you to survive the immediate crisis. What is most important is remaining viable, and that requires flexibility, creativity, and optimism as well as constantly assessing whether what you are doing is working. If it isn’t, be ready to adjust.
About Frank Jenkins Jr
Frank Jenkins Jr. CPA is the managing partner of Adams, Jenkins & Cheatham, a CPA practice based in Midlothian, VA. Frank specializes in Consulting services, tax planning, audit & assurances. "I genuinely care about our clients because I have a personal connection with them." He is active in the community and belongs to the AICPA and the VSCPA.
