You furloughed staff and the rest are working from home. You hastily implemented tech to allow your business to continue. You applied for all the grants and loans available to you during the lockdown. You negotiated a rent reduction or rent holiday. You deferred tax payments. You survived. Lockdown will soon lift. What then? This is the next challenge for your business and you should start planning now what your next steps will be.
Not all insurance policies cover disruption caused by the lockdown. If your business disruption policy doesn’t specifically cover pandemics/infectious disease, you might still be able claim under more general provisions of your policy, for example relating to the loss of suppliers or key personnel. Most policies require you to notify of a claim within a set period of time. You should check what your policy says and bring a claim quickly. And check what insurance you need going forward.
Business was fine a couple of months ago and the furlough payments helped during lockdown. As these payments reduce or fall away, demand may take longer to recover and you might have to make redundancies. British Airways, for example, furloughed 23,000 staff and now anticipates making 12,000 redundancies. Even, if you’re not doing it at this scale, it is important to handle this correctly. Don’t forget you must consult with employee reps if you’re proposing to make at least 20 redundancies within 90 days.
If you hastily signed up new tech to allow your business to continue during the lockdown, you should now evaluate what you’ve done. Check the terms of service to see what nasties are in there. Also, review what effect the new IT services have on your existing infrastructure. Do these new services integrate with your existing infrastructure? Have you locked down how they can be used? Have these services introduced security issues because they’re not encrypted? Or can any user can access the service simply by knowing the online ID? Assess how your staff are actually using it. Are they unwittingly sharing confidential information? When was the last time they changed their passwords? Are you using two-factor authentication? Now is the time for proper IT governance.
Health & safety measures
We await details of what health and safety measures businesses will have to put in place after lockdown. It’s likely to include the following. Are you ready for this? How will this extra expense impact your business?
- additional hygiene procedures, including sanitising equipment and maybe face masks
- social distancing of 2m to continue between workers and customers
- physical screens and the use of protective equipment
- minimise number of workers using equipment, including reduced hot-desking
- stagger shift times
- maximise home-working
WFH is the new norm?
Even the CEOs who most resisted working from home had to admit defeat during the lockdown. The government looks set to encourage working from home for the longer term. Besides, you’ve implemented much of the IT already. Do you want to pay for those expensive offices when you can have many of your staff working remotely? Barclays anticipates a more de-centralised approach to staff working. This might include local branches becoming satellite offices for more employees. “I think the notion of putting 7,000 people in a building may be a thing of the past” said Jes Staley, chief executive. You may have to implement new policies and procedures to ensure working from home works.
Exiting your contracts
You might be stuck with supplier contracts you no longer need because demand has dried up. Or customer contracts you can no longer fulfil. Does “force majeure” or “frustration” still apply to your contracts? Can you vary them using the change control procedure? Can you exit them for convenience? Can you end them for the other party’s failure to pay / deliver? Don’t forget, both parties can agree to terminate early. Also, if most of your staff are working from home, you might not need your swanky office. Or if your customers have stopped calling at your shop, you might want to offload the premises. Check your lease.
Business goes bust
Of course, if all else fails and you have more debt than you can pay, you may have no choice but to stop trading. But, you might be able to do a pre-pack administration. Under a pre-pack the administrator immediately sells the business or the assets (or both) under a pre-arranged sale. Pre-packs can help the business survive by reducing debt but preserving customer and supplier contracts and jobs. Of course, you’ll need the secured creditors to be onboard but it might be a way forward.
If you need advice, contact me firstname.lastname@example.org or +44 (0) 20 7611 2338.