Assessing Your Business In 2020

We finally made it to the end of the year. For some people (like every realtor I know) 2020 was a fantastic year. But for the vast majority of us, it just sucked. The pandemic ravaged the economy, closing businesses and, in turn, causing massive unemployment. I may be wrong here, but most people without a job don't typically buy more stuff.

As we start a new year, I usually recommend that this is the time to assess your business and see what worked and what didn't work in the last 365 days. In this case, an autopsy may be more appropriate. 

But it's not all doom and gloom. Their were those who adapted to the "new normal" by readjusting the way they worked. Zoom and other virtual meeting platforms created a way for sales people to see their clients without having to physically meet with them. The "contactless" sales approach kept many a good sales person afloat. 

As the vaccines begin to get distributed and the pandemic slowly ebbs, I predict the economy will make a very slow recovery at first, much like an aircraft carrier making a U-turn. But there will be lasting effects for years to come.

One positive effect was that the client adapted to the changes as well. For example, I can clearly see that going virtual with my business won't be as difficult now because my customers have already been exposed to a year of working that way. Any resistance they may have offered up will be minimized. 

Another impact is that a large part of the population will continue to want some form of social distancing, masking and other ways of staying "safe" for the foreseeable future. After the stock market took a massive dump in 2008 many amateur investors took what money they had left and stayed on the sidelines for years, even though the market eventually made the losses up. Your clients, much like those investors, will remain cautious about how they do business, despite information that could convince them otherwise.

With all of this in mind, it still behooves one to assess their business and make intelligent decisions for the upcoming year. As usual, I am going to look through my data and sales reports to see what worked, as well as what didn't. However, when I go through these numbers this time around I'll have to consider, with an open mind, if or how the virus affected everything. And be aware that the pandemic will still be with us for at least the first quarter of the new year.

This can be more difficult than previous end-of-year assessments. Take my insurance practice as an example. My customer acquisition costs actually stayed about the same, but how I got those customers changed dramatically. 

I would normally figure out how much I spent in a month on gas (I travel quite a bit), meals, marketing and other expenditures related to attracting clients and divide that number (we'll call it Marketing Costs or MC) by the number of new clients. The factors that create my MC are now rearranged. My fuel costs are dramatically lower while my internet marketing costs are higher. 

Unfortunately, the number of new clients is lower as well. When it's all said and done, and even though I attained less clients, my acquisition costs are about the same. 

Going through this exercise may seem redundant but until you see the numbers it's hard to understand what is really going on in your business. If you keep your numbers at arm's length during the year you should be able to understand what the positives and negatives are, even in a year as unusual as 2020. 

I hope everyone has a great 2021 and if you have any suggestions that could help others please leave them in the comment section. And as always, please stay healthy!

Chris Castanes is a professional speaker who helps sales people succeed through workshops and humorous presentations. He's also the author of "You're Going To Be Great At This!", a humorous look at sales. For booking information, click here. He's also the president of Surf Financial Brokers selling life and disability insurance in several states.