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Traditional accounting tends to focus on the past, collecting information about what’s happened in order to pay last year’s tax bill. But we prefer to look at what’s going on now for our clients and focus on the future. That’s why we’ve been doing a lot of thinking about what 2021 will bring. The CBI predicts an economic revival this year, though no full recovery until 2022. We see 2021 as a year of two parts, the first continuing to be dominated by pandemic restrictions, followed by a rapid opening up of the economic throttle as the effects of the vaccination programme are felt.
We’re certainly not going to try to predict interest rate trends or what events might occur in 2021, but here are some observations on how the business environment may develop.
More demanding customers
We all got a bit complacent pre-Covid, thinking that things would always carry on as they were, that customers would keep coming so long as we continued to do what we were doing. 2020 made everyone realise not to take anything for granted. Experts are predicting (or hoping) for a surge in consumer demand and a boom once Covid restrictions are relaxed (“bounce back”). However, we think that the customer experience is going to be more important than ever when people start spending again; consumers will shop smarter, maybe more local and expect more for their money, whether from adding value to your offer or improving the experience of doing business with you. Is your business ready to respond to these new demands? Taking a leaf out of our own book, we constantly look at how to add-value to the business services we provide. We are always looking to improve and are never happy with our progress as we can always do more.
Digital transformation
This was a pre-pandemic trend which the effects of lockdown have accelerated. Greater efficiency and productivity through digital technology will be key to survival. Internal operations will be automated; Apps and more interactive websites will reach out to customers with a better user experience; even more data will be made available to make better business decisions. Machine learning will play a growing role, but in the meantime, a more joined up approach to collating and presenting real-time data will help decision-makers, and their business advisors to respond correctly to opportunities and threats. Although its rollout is delayed for small businesses until 2022, Making Tax Digital will encourage this process as HMRC requires us all to switch to more joined-up, digitised bookkeeping and more regular filing. And as businesses rely more on their tech and data, more investment in cybersecurity and business recovery will be increasingly crucial to reassure customer trust.
New ways of working
Working from home… or working from anywhere? Working from home has brought benefits to both employees and employers in terms of saving time and money and we can see this trend continuing, though perhaps in a more hybrid way – we still enjoy the social interaction of the office, but do we need to travel in every day? We predict a more flexible approach to work patterns and the need to invest in faster, more secure connectivity. Now that tech has made meetings easier and quicker to arrange, we can expect a lot more of them. This might seem like an unwelcome and retrograde step at first, and for the traditional style of meeting this may be true. But gathering key stakeholders for ten minutes at short notice to work through a problem, or to approve a proposal, could save days of emails being passed up and down the approval chain. We just need to ensure that our new ways or working remain SMART.
This could also lead to an interesting trend. If employees benefit from the more flexible ways of working, but their employer’s don’t share their optimism, this could lead to a big churn in the workforce (especially with many remaining in roles because of the recent climate), or people may seek different roles or even start up their own businesses.
New business models
We believe that 2021 will see many businesses of all sizes rethink what they offer and how they deliver. This could be the age in which newer, smaller and more agile businesses thrive and take over the landscape left behind by the dinosaurs. Businesses that reacted quickly to lockdown and re-pivoted their business model thrived (business pivot), even in the hardest hit sectors such as hospitality and events. The pandemic has also made consumers more aware of their local businesses and suspicious of globalisation, which could be good news for the High Street/local businesses. Businesses are also thinking about their supply chain vulnerability to wider events beyond their control, from global lockdowns (we may see new Covid outbreaks for years to come) to the possible repercussions of Brexit. People also appear to be ready to try out new ideas; sideshows could replace your primary income as people shift from employment to self-employment with entrepreneurship soaring.
IR35
Unfortunately, we have to mention this one. Whilst the delay to 6th April 2021 helped some, many had already been hit as medium and large businesses changed their recruitment in anticipation of the changes. However, this will have a big impact in 2021; it could change the way contractors work (umbrella-companies, offshoring etc).
Brexit
OK so we couldn’t discuss 2020 without mentioning B*****. Whatever side of the divide you reside, it will bring uncertainty as well as opportunity.
Don’t mention the virus!
Now that light can be seen at the end of the tunnel, at Black and White Accounting we’re committed to looking forward and that makes us instinctively optimistic. Some big names in business have taken a hit, and familiar names have even disappeared, but those businesses that make it through this difficult time will be fitter and ready to grab new opportunities this year and the next. There are many opportunities in the current market. Are you in a good place to benefit?
Personally, this will be the last time we blog about Covid-19 (we hope); our focus, along with our clients’, is now on the future.
Do you have a business idea, or are you already setup and looking for some support? If so, please get in touch with us today by contacting Black and White Chartered Certified Accountants, filling in the “Got a Question” form on the right, or calling us on 0800 140 464.
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