Strategic Planning and
Budgeting Considerations for 2021
2020 Issue 4 | GearedUp
34
As we move out of 2020 and into 2021 , we cannot operate under the assumption that everything will go back to “ normal ” as soon as the clock strikes midnight Dec . 31 . Yes , we all might be ready for 2020 to be wrapped up , but fitness clubs still have to be prepared to adapt to the pandemic carrying into the new year , particularly when it comes to strategic planning and budgeting or forecasting .
Looking Forward Into 2021
Unfortunately , the only thing that seems certain about 2021 is more uncertainty … which is not something that is comforting when associated with budgeting or strategic planning .
“ I think the thing we ' ve discussed the most is how adaptable we will have to be in regard to our budget ,” said David Murray , chief financial officer of Impact Fitness . “ With the industry still in a bit of choppy water with closures and capacity restrictions for the short and medium term , it could affect the inputs on any or all our revenue , expense , capex and cash budgets . Our plan is to decide on a downside
( red ), neutral ( yellow ) and upside ( green ) budget for our clubs , with the assumption that they all remain open . If our clubs close again , we will get back to triage mode , and reforecast those scenarios as necessary .”
Of course , since 2020 has looked different from any other year , there needs to be a shift in the approach to budgeting and strategic planning for 2021 . Scott by Kate Betts
Sanders , managing partner with PF Houston , said , “ Typically , we budget and plan strategically for an entire year and then recast our budget in July with a latest thinking forecast ( LTF ). This year , we created an annual forecast and strategic plan but plan to recast and review each quarter due to the uncertainty of COVID .” He points to flexibility as being the most important thing for franchisees to consider when budgeting for the new year , explaining that there is no empirical or historical data that could be used to budget with any true accuracy .