This has been an unbelievable year. We’ve seen civil unrest, the shutdown of the world economy, a global pandemic, and even a loose tiger running around East Tennessee. As we head into 2021, I’d like to take a moment to reflect on the business lessons from 2020 and how they can be applied in the coming year.
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This has been a difficult year for so many of us. But it’s during times of struggle that we’re given a fresh perspective. Likewise, times of hardship and struggle can teach us some of life’s most valuable lessons. With that in mind, I believe that there were many lessons to be learned from everything that took place this year. For the sake of time, I’ve condensed them down to a list of eleven lessons that can be taken into the new year.
I once heard it said that we use people to collect things. That is such a backward philosophy in my opinion. If there’s one thing that 2020 has taught me, it’s that we all have struggles. We all love, laugh, cry, and matter. I just can’t get behind the notion that people are nothing more than a means to gain material wealth. Instead, I believe we are meant to love people and use things. This idea is one of the central tenets of my Christian faith. In fact, John 13:34 says, “A new command I give you: Love one another. As I have loved you, so you must love one another.”
Those of us in the small business world want to do business with the people that we know and trust. It’s people who are going to make the difference. The people who work in our companies, make up our clientele, and serve as our vendors are going to be the difference moving forward. So, people matter.
Ronald Reagan once said, “Trust but verify.” I’ve always loved that quote because trust is such a necessary thing in the context of our businesses. We have to earn the trust of our team members, customers, and vendors. We earn trust in the small matters so that we may build on that trust as we head into 2021.
I’ve always lived by the philosophy that my word is my bond. But, candidly, I don’t feel as though I’ve lived up to that over the past year. As a result, I’ve committed to my team and my clients that in 2021 I’m going to build trust.
One of the keys to the success of your business is you! I mean, let’s be honest consumers these days have hundreds of choices for where they spend their money. In the end, your customers choose to buy from you because of you. Now, it may be indirectly because of you, but your business is a reflection of your values and who you are. So, be authentic. Be unapologetically you.
I get on my Financially Simple podcast sometimes 3 or 4 times a week and don’t attempt to be anyone but me. I don’t think that people would really respond to the show as well as they do if I did it any other way. Sure, I get a few listeners who say that they wish I wouldn’t talk about my faith or my family as much as I do. But I can’t do that because my faith and my family are a part of who I am. Overall, more people seem to relate with that aspect of me than don’t.
Folks, I know that this year has hit some in ways that others have been spared from. Regardless of how 2020 has impacted you, your family, and your business, there are reasons to be thankful. Gilbert K. Chesterton once said, “I would maintain that thanks are the highest form of thought and that gratitude is happiness doubled by wonder.” Think about that, friends. Even in the hardest times, showing gratitude can increase your happiness.
I can tell you from my own experience that there are times when I just don’t feel like getting up and facing the daily grind. It’s normal. We all have days like that. However, when I start to think about all of the ways that I’ve been blessed, right down to the smallest detail, it’s impossible not to feel better about the day. I feel uplifted, positive, and energized by acknowledging how blessed I truly am. And I’m not even talking about the “big ticket” material blessings. I’m talking about being allowed to wake up and see my family again, the wonderful people that God has placed in my life, having food to eat, and a warm place to lay my head. So, operate from a place of gratitude and see how much better you feel.
If there’s one thing that 2020 has taught business owners, it’s that things can change in an instant. In my industry, having a disaster plan is a requirement of the law. However, there may be many of you who have never even heard of a disaster plan for your business. Essentially, the disaster plan is a document that outlines exactly how operations will carry forward in the event of any type of disaster that might disrupt the business’ daily operations.
For example, I was on a hunting trip in the Rockies not long ago. If I had gotten stranded and froze to death, the disaster plan would have ensured that our business would carry on without me. We never know when disasters of any kind will occur. So, it’s a good idea to devise a disaster plan for your business. It might just save your business when the next pandemic hits.
Oftentimes, we get business clients who, when we look at their structure, we find one income stream that is subsidizing other income streams. That can’t happen, folks. When we have situations as we’ve had in 2020, you have to have profitability from every income stream. Anything less can be disastrous for you and your business. So, the sixth business lesson from 2020 is that we must have profitability from every income stream.
This has been a subject that I’ve argued for such a long time. It’s common sense that we all need to have a personal emergency fund. So, why isn’t it common sense to have one for your business? 2020 has put an exclamation point on the fact that we need to have cash reserves that can sustain our business operations in the event of an emergency like COVID-19. Friends, cash flow is all well and good but it requires that you are still receiving an infusion of cash on a regular basis. What happens when the government shuts down the economy and nobody is spending their money in your business for days, weeks, or months?
This is why cash reserves are more important to your business than cash flow. Like your personal emergency fund, your business’ cash reserves can sustain your business until things open back up. If you don’t have an emergency fund in your personal finances, get one. If you don’t have cash reserves that can keep your business afloat during hard times, make one!
I’ve spoken on this topic many many times. Scalability can allow you to increase or decrease your business at a moment’s notice, based on the demand. Additionally, it can help to improve the value of your business. However, I can’t think of a better argument for making your business scalable than the events of 2020. Company’s that were scalable managed to weather the shutdown a little easier than those that weren’t. When everything came to a sudden halt, they were able to decelerate their production and daily operations by backing off of their staffing levels.
In some cases, they were even able to do so without letting anyone go. Through creative scheduling, there were some businesses that kept everyone working. If your business isn’t scalable, assess your operations and put a plan in place to make it a scalable and replicable business.
There are many of us who just don’t like technology. It’s typically because we just don’t understand how to make it do what we need it to do. I’ll be the first to admit that I’m doing good just to log in to my email. That’s why I employ people who are tech-savvy. I am able to reap the benefits of technology in business without being the one that has to push all of the buttons and pull the levers.
However, many businesses wouldn’t have made it through this year if not for the opportunities that e-commerce and other technologies afforded them. As we move forward, more and more consumers are going to be taking advantage of online services. As a result, business owners need to be ready to embrace technology or risk being left behind.
I’ve said it a thousand times before, and I’ll say it a thousand times more, I will bet on the entrepreneur in America every time. The reason is that we have that attitude and determination that we don’t care how many times we fail as long as it leads to that one time we don’t. I mean, where would we be in this nation (or even in the world) if Thomas Edison just gave up the first time his light bulb didn’t work? I’ll tell you where… in the dark.
Fortunately, Edison believed that “the value of an idea lies in the using of it.” Like Edison, Steven Johnson believed in the power of innovation. He once said, “If you look at history, innovation doesn’t come just from giving people incentives; it comes from creating environments where their ideas can connect.“ We’ve had an environment forced upon us in 2020. As a result, the business owners that were innovators came away with record highs in their businesses.
One of the most popular catchphrases of 2020 was “the new normal.” I absolutely do not agree with this statement. There was nothing normal about this year and I don’t believe that it will remain this way forever. I’m reminded of something that my mother always said to me when I was growing up. Anytime I ran into some type of hardship, she would say, “this too shall pass.” And you know what? It always did.
Eventually, things will revert back to the mean. That’s just the way things go. Sometimes we see periods of great excess. Other times, we experience incredible lows. In both situations, things always revert back to the mean which lies somewhere in between.
Friends, this has been an incredibly challenging year. Some of us have lost so much. On the other hand, there are many others who have had the best year of their lives. In each of these cases, there are lessons to be learned that can help us to improve in 2021. Likewise, one thing remains true for all of us, life is hard. It’s complicated and difficult but full of sweet moments, and life is good. 2020 was difficult and frustrating. But if we apply the business lessons from 2020, we can at least make 2021 financially simple.
Have you and your business struggled through the challenges of 2020? Do you need help getting things back on track? Schedule a meeting with us. The team at Financially Simple has developed plans and solutions to help each of our business clients turn their businesses around, even in the midst of this year’s challenges.