What can I do to secure the future of my business after lockdown?
Following the Government’s announcement of its exit from lockdown plan and the subsequent easing of restrictions, now is the time for businesses to focus on what their business will look like post Covid-10.
Corporate Commercial Partner, Tom Webb discusses some of the key areas that businesses could be looking at in order to prepare themselves for the ‘new’ business normal.
Terms & Conditions
If your business supplies goods and/or services, then over recent months you may have found that your standard terms and conditions have not met the challenges presented by Covid-19.
While we hope that a ‘second wave’ of the pandemic does not occur, preparing for one or any other future business interruption is necessary. So, if your existing terms and conditions do not currently contain a detailed ‘force majeure’ or material change clause then it would be wise to include one. It is also a good time to check your insurance policies and in particular the business interruption cover that has seen many companies not being able to claim on policies where they thought they had cover. Terms and conditioned should always be reviewed with insurance cover so that he terms can dovetail to protect the business.
While Covid-19 saw us all adopt the ‘we’re all in this together’ attitude, when it came to refunds and cancellations, this was difficult for businesses, who wanted to be understanding and supportive of their clients but at the same time mindful that they need to ensure they did not suffer losses as a result.
Whilst your standard refund and cancellation terms may give you the right to retain deposits and/or your customers the right to cancel, it is worth considering other options such as postponement or amendment that are likely to benefit both parties moving forward.
We have seen many businesses diversify and adapt their business model in order to maintain an income and not waste stock, following the restrictions imposed by the Government. Many of these changes such as moving operations online are likely to require an update to your terms and conditions to ensure you comply with distance selling and data protection regulations.
One benefit of lockdown is that it does present the perfect opportunity for business owners to “work on” as well as “working in” in their business, undertake some corporate housekeeping and take stock of your business and the way it will need to operate in a post Covid-19 economy.
If you are a sole trader or partnership, the lack of corporate structure could be a cause for concern due to the potential unlimited liability. Incorporation as a limited company is worth considering as may give you greater flexibility and protection in the future.
Restructuring and reorganisation of companies can be an efficient way to separate elements of a business and help to achieve future goals. Reviewing your current operation is not only useful to identify an underperforming area which could then be dealt with but also to establish a focus on a core offering in the future.
With careful planning and appropriate professional advice reorganisations including demergers or use of holding companies can be used successfully to split parts of a business in a manner that ensure there are no adverse tax implications.
Covid-19 has forced us all to look at how cost effective and profitable our businesses are and restructuring can be a good way to streamline and reduce costs. Other benefits include ring-fencing assets from what may be riskier elements of a business or consolidating debts to free up cash where is it most needed.
If you are thinking about making changes to your business and would benefit from some advice please contact our Corporate and Commercial team on 01225 750000 or email firstname.lastname@example.org we are here to help you get your business back on track.