Knowledge Center

New Year, New Goals: Zero-in on Your Small Business’s Finances and Strategy to Meet This Year’s Goals

running-a-business | Read Time: 3 minutes

By Candice Caruso | Published: December 2020

image

Every year, small business owners and operators assess the wins and opportunities from the previous twelve months, looking for new ways to drive revenue, save money, leverage new innovations or technology, and provide their customers with the products and services they desire.

This year, that assessment comes with a major caveat: COVID-19.

2020 was unlike any year most small business leaders have ever seen. The pandemic had a negative impact on many businesses, and of the 54% of businesses surveyed by WSFS Bank in late 2020 that experienced growth, 68% modified their business models to make it happen.

Due to the business and economic environment, it’s even more crucial to set attainable financial goals. The key question: do you set those goals based on 2020 results or what the “new normal” is for your business?

While there is no universal answer, it’s important to consider specific impacts to your business, how you adapted and whether any changes you made are beneficial in 2021.

Here are a couple areas to focus on as you plan your business’s financial and strategic goals for 2021.

Set Your Plan, But Be Ready to Adjust It
If 2020 has taught us anything, it’s that being nimble and ready to pivot is no longer a best practice—it’s a must.

In addition to changing operating models, four in 10 of all businesses surveyed by WSFS also cited pre-planning as a key factor in their growth during the pandemic. They anticipated how restrictions could impact their business and shifted their financial and operational plans, including new products and distribution channels, to weather the new realities of how they could conduct business.

However, 45% of small businesses’ finances and cash flow were negatively impacted by the pandemic while only 40% said their bank helped them with business planning. Take the opportunity to leverage relationships with your bank and accountant—or establish new relationships—to help you navigate financial planning and goal setting on a regular basis.

Work with your banking and accounting partners to continuously review and adjust short-term goals and how they fit into your long-term strategic plan and projections, using Key Performance Indicators (KPIs) to measure success and opportunities, monitor performance and adjust your plan accordingly.

Continuously Review Financial Documents
Even if you’ve contracted the help of an accountant, it’s helpful to develop a deeper understanding of your business’s financial affairs.

One way to accomplish this is to become familiar with and regularly review the following reports on a monthly and quarterly basis.

  • Historical Financial Performance Review
  • Profit and Loss Statement (P&L)
  • Balance Sheet
  • Cash Flow Statement

It’s also important to assess the strengths and weaknesses of your team to ensure the right people are in the right roles for their own success and that of your business. Help them adjust to new ways of operating or interacting with customers.

Finally, continually monitor the needs of your customers and your competitive landscape or alternatives to your business offerings. Have a plan of strategic execution for 2021 supported by financial measurements of success and revisit your results monthly.

Continue to pivot to maximize success and lean into your relationships to learn what products and services customers are most in need of and shift your focus as needed to meet those needs while keeping your long-term strategy and financial goals on track.




About the Author – Candice Caruso
Candice Caruso is Senior Vice President, Director of Government Guaranteed Lending at WSFS Bank. She brings more than 20 years of experience in the financial services industry, including 12 years as a business funding expert, and has been featured on Bloomberg Radio, CNBC’s Closing Bell, The Wall Street Journal and Franchising World.

 


Managing Your Small Business’ Relationships – Tips For 2021 and Beyond

When small business leaders look back on 2020, many will see recurring themes of change, resiliency and the importance of relationships as they adapted to an unpredictable operating environment.

Read More

For Women-Owned Business Leaders, Now is the Time for Professional and Personal Growth

As a leader, recognizing traits in individuals that are fits for your organization and its culture is key. But a leader’s job isn’t just finding the right people – it’s cultivating talent, enriching employees’ careers and lives – and your own.

Read More

How Hosting an On-site ATM Generates Business

During these challenging times, as business owners are looking for new ways to generate new income and increase foot traffic to their storefronts, they may want to consider adding a customer convenience that also brings in revenue – a bank-branded ATM.

Read More

Tax and Cash Flow Implications for Your Hobby or Business

You just finished giving your first drum lesson to a friend and are feeling confident enough to continue giving lessons more often.

Read More

Turning Your Creativity into a Business: Tips for a Solid Financial Footing

You’ve learned what brush strokes to make, what notes to hit or what words to write. But here’s what they probably didn’t tell you in school: Your unique talent is also your business. And that comes with the need to have a business mindset that gives you the financial security to pursue your artistic vision.

Read More