What have we learnt from 2020?

To answer this question, we should take a look at a few adjectives that have been used to describe COVID-19’s effects on our personal and business lives. For example, unexpected, unprecedented, disruptive…

Prior to the pandemic we assumed that tomorrow would turn out much like yesterday. Many businesses had become accustomed to managing cash flow on the assumption that next month’s turnover could be more or less guaranteed based on expected market conditions. There were trends, up and down, but by and large positive, growth orientated economic activity was a given in western democracies.

COVID-19, in a matter of weeks, tore up this assumption.

It quickly became evident that the pandemic was creating new norms. A few business sectors have benefitted from the ensuing disruption, but many businesses have not. A sizeable chunk has gone out of business as lock-down regulation has required them to close (witness the effects on our leisure and entertainment industries).

Lesson 1 – always expect the unexpected.

The are a number of businesses in vulnerable sectors that have survived COVID disruption thus far. Many have had their cash flow enhanced by the multitude of government grants and soft loans on offer. Others were financially prepared; they had fat on the bones. Their Balance Sheets showed healthy reserves of cash or assets that could be quickly converted into cash. Very few businesses would have considered the disruption we have suffered in 2020 as anything more than fiction, a great disaster movie script. What we now know if that the unexpected needs to be factored into our business planning.

Lesson 2 – make sure you can ride out extended downturns.

For example, periods where your income is much reduced or if in business you are required to trade at a loss. It will be many years before this coronavirus outbreak passes into folklore. The fear of a repeat will linger for some time, like an itch that can’t be scratched. Should we, therefore, include the acquisition of reserves as one prudent strategy for 2021? If that is not possible could you “mothball” your business if required or convert your business assets to a different use?


Lesson 3 – planning is no longer a luxury we cannot afford.

In the past, pre-COVID, when the expectation was tomorrow would be much like today (or yesterday), many of us felt no need to plan what was going to happen tomorrow. This is no longer the case. The last year has provided the evidence that the unexpected can have a real impact.

We can help

During 2021, perhaps we can all benefit from business planning? We are still in the centre of the COVID storm and from next month we will be dealing with additional disruption as we finally leave the EU transition period behind.

If you would like to consider your business finances, how we are going to survive 2021, and then regroup and build a sustainable business modal for the remainder of the 2020’s, we can help you start the process now.

Please call so that we can discuss your options. There will be no one-size-fits-all remedy from the damage inflicted in 2020. What is clear is that a willingness to engage in the challenges presented, to factor in the unexpected, and plan for the future is an endeavour worthy of serious consideration.


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