How can SMEs prepare for 2021?
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How can SMEs prepare for 2021?

As we begin a new year and leave behind one the most challenging years for SMEs across the UK, now is the time to begin thinking about what 2021 might look like for your business. More than ever, it’s important to look ahead, focusing on what you know and can control as well as taking the learnings from 2020 with you.

We’ve all had to adapt this year, and it’s been fantastic to see the resilience and agility of the UK’s small businesses. However, while the rollout of a coronavirus vaccine brings a sense of hope for the future, the impacts of the pandemic are still likely to continue for some time.

Although things remain uncertain, there are positive steps you can take to not only survive, but to thrive in 2021.

Focus on what you do know

It’s still unclear exactly what 2021 has in store, and as we begin another national lockdown, it remains an incredibly uncertain time for everyone. If we’ve learnt anything from 2020 it’s that situations can change overnight. However, planning ahead for the things we currently do know is still an important part of any business strategy, although you need to be mindful that the landscape could change at any time and you should be prepared to flex and adapt with it.

Here, we’ve made a note of a few key dates you need to have in mind for your planning:

  • January 31st – Deadline for submitting online 2019-20 self-assessment returns
  • February 14th – Valentine’s day
  • March 1st – VAT Construction reverse charge starts
  • March 3rd – Spring budget announcement expected
  • March 31st – Current deadline for applying for any of the Coronavirus loans (Bounce back loan, Coronavirus Business Interruption Loan, Coronavirus Large Business Interruption and Future Fund Loans)
  • March 31st Last day of reduced 5% VAT rate for tourism and hospitality
  • March 31st – Payment of deferred VAT or beginning of VAT payment scheme
  • April 4th Easter Sunday
  • April 5th – End of 2020-2021 tax year
  • April 30th – Coronavirus Job Retention Scheme (CJRS) ends

What learnings should small businesses take from 2020?

As we head into the new year, it’s important not to forget the lessons that the challenges of 2020 have taught us and to look at how we can apply these learnings throughout 2021 – these will likely be the building blocks for success this year.

And whilst it’s fair to say every sector has faced its own unique sets of challenges, there are some lessons that everyone can take into their 2021 planning…

  1. Be ready to adapt – One thing we know is that for the foreseeable future, things will remain incredibly uncertain for businesses. 2020 taught us that businesses who are able to pivot their services quickly are more likely to grow throughout this pandemic. Changes you made in 2020 are likely to be just as important for 2021.
  2. Focus on your online presence – Even when shops began to reopen following the first national lockdown, consumers were still choosing to shop online with many preferring the ease and safety that online services provided. With more people turning to online and the competition greater than ever, ensuring your business maintains a strong online presence will be key moving forward.
  3. Your employees are your most important asset – This year, we’ve all had to adapt to a new way of working, with many people now working from home whilst juggling childcare challenges, poor wi-fi or office setups and health worries. The knock-on effect of this could have been huge for a business’s productivity, but those that introduced more flexibility and prioritised their employee’s wellbeing have seen huge benefits.

The trends you need to consider in 2021

2020 was a year that shifted our entire lives, from the way we work to the way we shop and communicate – we’ve all had to adapt and many of these trends are most likely here to stay.

The world isn’t going to go back to how it was before the pandemic, and so the key to driving your business forward will be to take advantage of the new way of life and consider the trends that are likely to impact your business.

  1. Growing digital markets

This year has accelerated our shift to digital, with non-essential retailers, offices, gyms and even schools forced to close, the entire country had to move online. The impact on SMEs was huge, and many had to pivot their business to online models, especially within the retail sector, in order to survive the UK’s lockdown period.

Whilst it’s expected that we’ll return to some sense of normality later in 2021, the digital trend appears to be here to stay. Consumer confidence will have a big part to play too and that could take some time to return with many not wanting to venture far from their own home, therefore it’s vital your business can take advantage of the new age of digital consumers.

  1. Employee wellbeing

Coronavirus has hugely affected people’s wellbeing and mental health, and as an employer, it is important to recognise the link between wellbeing and productivity. A recent report published by the CIPD stated that more than half of businesses said wellbeing activities had resulted in better employee morale and engagement and a healthier and more inclusive culture, while around three in ten reported it had lowered sickness absence, enhanced their employer brand and reduced work-related stress.

With working from home likely to continue well into 2021, supporting your employees’ wellbeing is made even more challenging, but putting wellbeing at the forefront of your 2021 plans will play a key role in your business’s success.

  1. Importance of strong cash flow

As we look towards 2021, we have a much better sense of the potential risks and possible outcomes that will impact businesses in the coming months. One such risk is to your businesses’ cash flow, which is often impacted by things that are out of your control.

Having a good cash flow management system in place is a great way to mitigate this risk and planning for the potential challenges your business may face will help you to maintain a strong cash flow and give you the opportunity to make investments to help growth. In fact, we’ve got a handy guide to help you manage your cash flow.

  1. Positive customer experience

With more people choosing to do business online, the competition has never been greater and we’re likely to continue seeing a surge in new start-up businesses in 2021. Customer experience is much more than simply having good customer service, it should incorporate everything from website usability to store accessibility, delivery and cost.

If you invest in creating a great experience for your customers, you’re not only likely to see an increase in business, but you’ll also stand out against competitors and retain more loyal customers.

  1. Sustainability

With Boris Johnson recently outlining a ten-point plan for the UK‘s green industrial revolution, it’s clear that in 2021 sustainability will be high on people’s agenda. Additionally, the coronavirus pandemic has shifted consumer behaviour more rapidly than ever before, with people increasingly looking for brands that align with their values.

Ensuring your business is sustainable and follows ethical business practices is not only the right thing to do but will also help you to stand out ahead of your competition and will give consumers the experience they are really looking for.

To find out more about how a Capify business loan could help your business thrive in 2021, get in touch today or find more information here.