Many Western Australian small businesses have confronted previously uncharted challenges in 2020 and the lessons learnt during the pandemic should become an ingrained part of business planning. As we come to the end of a tough year businesses need to tap into their resilience and move forward in 2021.
Across the spectrum there have been some companies that have struggled but if they are still trading they should take heart from that and think about what has helped keep them afloat or even allowed them to grow.
When the pandemic resulted in lockdowns, other restrictions and revenue decline forced companies to take a good look at their businesses including their expenses, processes and supply chains.
That should be a permanent and regular part of business planning, a combination of constant vigilance and acting quickly to control spending and eliminate wastage.
In terms of expenses, in light of recent experience, a key consideration should be insurance – making sure the coverage provides the most suitable protection for a business.
A glimmer of positivity over recent months had also been the capacity for companies to identify new income streams such as distilleries making hand sanitiser. As always be prepared to do a bit of lateral thinking.
Reducing debt would also be an important priority for business operators in 2021. The payment holidays implemented by banks as part of the relief measures have been ending so businesses are now back to servicing loans. While it may be a case of steady as it goes initially, reducing a reliance on debt should be a priority to help strengthen companies against any future unexpected challenges.
High interest-bearing debt and non-tax-deductible debt should be prioritised and, if it can be afforded, slightly increase the amount and frequency of repayments to decrease the life of the loan and overall interest paid.
There are likely still challenges ahead, but a disciplined approach to business planning has to be a must do for 2021.