Date Published: 17/12/2020 14:55
It was impossible to have 2020 vision, but can we predict what will happen in 2021?
Jillian Thomas attempts to look into the crystal ball to see what might lie ahead.
No-one could have predicted 2020. At the beginning of January we were looking back on 2019, a year that saw another General Election, Brexit still not finalised, riots and wildfires in far-flung places and climate demonstrations closer to home.
Now it seems like a nice cuddly year in comparison with what was to follow. In late January 2020 we started to hear about a new virus in China; by the second week of February I was writing about how it may have a massive impact on the world economy or turn out to be a flash in the pan. How I wish the latter was true.
Now we are learning to live with the effects of Covid-19 in our personal and professional lives. We have furloughed staff or been furloughed, we have had to make redundancies or cut hours, work from home or re-think our business.
And that I think is fundamentally where we are at. It is time to re-set. To re-set our thinking and maybe re-set our business.
When lockdown first happened most of us thought by now we would be back to normal; it would have been an awful few months, but we would recover and move on. Then came furlough and lots of other new words and phrases; socially distance, test and trace, self-isolate. It was a new world we were entering and one we are still in.
Some people panicked. They hadn’t a plan B, they hadn’t even got a business continuity plan. I know good people who behaved irrationally and closed down businesses or jumped ship. It’s like being hit by a giant wave and thinking you won’t recover. But you can and you will. I should know I had the misfortune of being caught up in the Boxing Day Tsunami. It came from nowhere, it knocked me down (metaphorically), but I got up and decided to carry on – and it led to me setting up my company. I believe you can re-set, you can get through; yes, you might have to ask for help, take time out to think, but we have time for that now.
It is perhaps a good time now to literally hedge your bets, to plan for two scenarios, one which really is worst case scenario and one which isn’t so bad. If the going gets really tough in 2021 it would help if you had done a bit of planning at the end of 2020. Have you looked at staff costs? Redundancy costs? Where you could cut if you had to. Work out a cashflow forecast for the good scenario and the bad scenario. Then when or if you have to make tough decisions, they are done with a bit of forethought.
What else do we need to consider? What could lie ahead in 2021? Well, I guess first of all we have to all admit we don’t really know; my crystal ball is a bit hazy. We have to work with what we do know. We do know Brexit is coming; something that has almost slipped our memory over the last few months. What does that mean for your business? It might mean you need to prepare for new paperwork and banking systems and processes, and you need to do that now; New Year will be with us very soon. It might mean good news and new opportunities; for example, that sterling falls. And if you export goods across the world that could give you a competitive advantage.
The Government has borrowed and borrowed big. By the time you read this interest rates and inflation may be heading in opposite directions. Low (or negative) interest rates and high inflation make it the ideal time to spend, rather than sit on cash. They also help make Government borrowing less painful. Maybe this is the time for you to borrow to invest. But do take advice and look at all your options.
So, it is not all gloom and doom. There are opportunities out there; opportunities that weren’t there before, but are now. Opportunities that may mean repurposing or retraining or re-focusing. But there are also grants available to help, grants from Government and councils and local enterprise partnerships, particularly for anything digital. You could upgrade your communications, invest in online marketing, spend on staff training. There are loans with very favourable terms too. (But please always read the small print.)
It is tempting to cut back on the marketing budget, but it is vital to still be seen. You might need to go back to basics, work out what product or service people need right now, or tweak the one you have for these times, and get out there and tell people about it.
You will have associates in the same boat, who can be allies; networks that can be tapped into, who can refer work to you and you to them. Even others who may be were competition can be on your side now. There is no point in fighting each other when we can collaborate instead.
I am not saying it is easy. This has been an unbelievably stressful time for anyone who runs a business. It is awful for staff being furloughed or made redundant, but behind those people are the people trying to keep the business going and keep the jobs alive. And we can all do our bit to keep the local economy alive too; by buying a coffee from the independent coffee shop or giving contracts to the local small businesses. I am not usually one to say you should spend, but now is the time we all need to help each other, or there will be very little left.
We can change some things, but we can’t change others. We can get angry at those who lead us, we can shout at the television, or we can plough our own furrow and do what works for us, our businesses and those close to us. We must all do our bit to keep the virus at bay and I do imagine the impact of it will hang heavy over 2021 and make it a very bumpy year.
But even in this crazy world, this world that has put untold pressure on nearly all of us, there are opportunities. You can rail against what you can’t control, or you can take this time to re-set. I know which I am going to do.
No individual investment advice is given, nor intended to be given in this article and liability will be accepted in respect of any action you may take as a result of reading this article. If you are unsure you are urged to take independent investment advice.
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