Setting Your 2021 Business Budget During Times of Uncertainty

September 14, 2020

Little did anyone know as they sat down to craft 2020 budgets last fall that those plans would be destroyed by the end of the first quarter of this year. A global pandemic, plus forced work-from-home measures, and unpredictable safety protocol costs have forced most companies to move money from one budget to another quickly.

Our new financial reality consists of more questions than answers, top among them being, “How do we plan for next year’s budget?” While 2020 was particularly chaotic, even in predictable times, most budgeting processes are frustrating. Here are some tips to get your head around the task at hand.

Consider the Short-Term First
What are your immediate needs for the beginning of next year:
 – Change in office location?
 – New staff hires?
 – Increased healthcare costs?

Monthly cash flow projections will help you determine if temporary loans are necessary to bridge funding gaps. Business loans may take 30 days or more to approve and fund, so it’s best to determine now if money deficits are heading your way. 

Then Focus on the Long-Term
Next, analyze spending plans coming later in 2021. By including department heads and company stakeholders in the process, you can get a detailed look at what growth is most important to your team and customers. Rank priorities and examine the trade-offs of delaying action on certain items. For example, deferring critical maintenance projects may result in higher costs later in the year. Or, choosing to deplete rainy day funds early in the year could leave nothing for months you typically see revenue shortfalls.

Pick A Big Goal for Next Year
Just because the world is constantly changing doesn’t mean that the plans for your business are in flux as well. Maybe you’re trying to save up a down payment for a new commercial building, expanding your online retail services, or expanding your staff to relieve over-worked departments. Outside of the predictable 2021 spending, set a major goal for your company that you can work towards during the year.

Reach Out for Assistance
On average, the effects of a recession year linger for ten to fifteen months, so be proactive in getting ahead of revenue shortfalls. Avoid drastic changes in the short-term, identify potential cash flow deficits over the coming months, and develop a long-term financial plan with your biggest goals in mind. 

Whatever your situation, you’re not alone. Reach out to our experienced commercial loan officers to help you create a solution that’s right for your business. 

If you’re ready, print our commercial business loan application and then set up an appointment to meet with a team member by visiting any Texas Gulf Bank location or contacting us.


*All Loans Subject to Credit Approval.