About this time of year food companies of all sizes begin to put their business plan together for the following year. This year the planning environment is as unclear as I can ever remember it being. Pandemic, recession, political and international issues all contribute to a high level of uncertainty.
Most experts believe it will be late next year at the earliest where the economy and consumer behavior normalize to a significant degree. Our political situation will not be resolved by the upcoming election. Either way you will end up with about 1/3 of the population angry about the outcome with some potentially resorting to violence. While the country is sorting out these difficult issues the population still needs to eat. With that in mind I suggest the following be considered as elements of your plan for next year.
- FIRM THE FOUNDATION: This is a process to evaluate everything you are doing to make sure you are focused only on elements of the business that make sense in the long run. Looking at each SKU for both its profitability and complexity is very important in uncertain times. A zero-based budgeting exercise validating every dollar spent, not just rolling forward a previous year’s number, can also be very helpful.
- RE-EVALUATE YOUR SALES AND MARKETING STRATEGY: 2020 will have a fundamental effect on the food industry for the next number of years. Some opportunities open while others may close. Will food at home stay strong? What will the foodservice of the future look like? What new trends are emerging? Get out and talk to your customers, suppliers, equipment manufacturers etc. Emerging trends show up here before showing up in sales data often months down the road.
- DEVELOP MULTIPLE/FLEXIBLE PLANS AND BUDGET: Start this process by using the most conservative sales budget with the highest likelihood of achieving and build the base operating budget around it. Then develop sales and expense incremental add on budgets for various increased sales scenarios. This process will help you stay positive in the base budget and also better control what you can spend on growth.
- RETHINK YOUR SALES AND MARKETING EXECUTION: 2021 may not see the return of the trade show. How you compensate for that in your lead generation process is critical. Automated sales funnels using e-mail and social media is one tool that may help. Also, evaluate sales channels that you have not been in before – both traditional and non-traditional, for new opportunities. E-Commerce would be a good place to start.
These are just a few of the areas you may want to include in your planning process for 2021. The best approach is to start with a clean slate in all areas of the business and ask if this is something we need to do for next year and beyond. It is often said that in chaos there is great opportunity. If planned properly 2021 can be a year of opportunity for you too.