Reflections on 2021 business

As we wind down this year, I can say unequivocally that I’ve learned more during this period than any other time of my life.

Financial results – I had the lowest gross income of my 40 year career, yet made big progress in paying off all consumer debt, improving my credit score (that was dinged following Superstorm Sandy fraud), and identifying sources of business expansion funding. The aberration didn’t even occur to me until the 4th quarter until a perfect storm of crashes in receivables.

Education – I took more CPE courses, read more books, took more certification courses, tuned in regularly to more podcasts, etc. than ever before.

Covid impact – I was apparently hit with more deaths, more client business closings, more trouble accessing government Covid relief, and more local poverty in my close circles than most people and that distorted my perceptions of the larger world. I see now how that distorted my ability to forecast economic trends. I was forced to recognize how much of my income was based on speculative forecasts that were grossly misguided.

Fee structure – I must enforce discipline in client financial management. I took on too many projects for free or at discounted prices. I trusted too many people who ultimately ripped me off after I incurred costs on their behalf. Two seven figure  client deals fizzled and I didn’t imagine that was possible. At the lower end, I must communicate and stick with limits on minimum sized engagements and take substantial advance payments.

Inflated valuations – We were forced to recognize the difference between net worth “on paper” and in real life took center stage. While many are touting current values, sales prices and appraised values for businesses, I understand that “realized value” is entirely different in a local economy that has been unable to access cash for economic recovery. I need to be on the lookout for deals that may weaken and collapse in the future.