This year, individual taxpayers, including sole proprietors and single-owner LLCs who normally have to file their tax returns by April 15, will have until May 17, 2021, to file their 2020 taxes. With tax season nearly behind us, it’s time to strategically approach your business plan for this year. The rigors of tax season provide you with valuable data about your business, perfect for improving the financial health of your company.
To stay ahead of the game, try the following steps to create or update your 2021 strategic business plan.
Learn from the past with historical data
Create a map of questions that reflect the history of your business:
- When did you launch the business?
- Which stage of its life cycle is it currently in?
- When did you reach key financial goals?
- What is the current ROI of the business and how has it changed over time?
- How has the data about products or services delivered changed over time?
- Are there any critical events that shaped your business, whether it was dealing with a crisis or making a major decision that altered the course of your business?
Study the current environment
The past year has been incredibly disruptive for a majority of businesses. A survey conducted between March and April 2020 discovered that 43% of businesses were closed due to the pandemic.
Your strategic business plan in 2021 must assess how the environment has changed over the past year and how it may affect your business. Try starting with an assessment of your customer profile. If you notice a shift in priorities, consider how it may affect shopping behaviors and expectations.
To find this information, you can use recent market research, your sales numbers, interviews, or surveys. Also, check into new industry trends and policies.
Identify opportunities and priorities with a SWOT analysis
A SWOT analysis is a framework you can use to evaluate your current situation and plan for the future. There are four elements of a SWOT analysis:
- Determine your business’s Strengths. They are what differentiates you from the competition. Examples of strengths include a loyal customer base, a solid online presence, and a unique product.
- Identify the areas where you have fewer resources than your competitors. A Weakness can be relying on outdated tech or offering slow shipping speed.
- Look for external Opportunities that could support growth, like unmet demand in a new niche.
- Consider how competitors could impact your organization, but you should also look at other Threats like new regulations or another lockdown.
Set financial goals for your strategic business plan in 2021
The documents you gathered to file taxes are a solid foundation for updating your financial snapshot, deciding where to allocate capital, and setting realistic goals. You should start by updating your balance sheet, income statement, and profit margin for the year.
You need a mix of short- and long-term goals with realistic time frames to develop a financially sound business. Here are a few examples of goals you can set:
- Reduce debt levels by x%
- Adjusting cash flow levels by x%
- Increase your profit margin by x%
- Buy x new properties
- Secure $x more in funding
The Maryland Women’s Business Center offers online references, business counseling services, workshops, and seminars for women entrepreneurs. Take advantage of our resources to keep yourself ahead of the game for the rest of 2021!