At a time when it’s anything but “business as usual”. We wanted to offer some helpful advice…
Our experts at Else have developed some top tips to help keep SMEs going until the market re-stabilises and we can all move forward stronger than ever post COVID-19.
1. Remember your core values
Businesses are built on relationships, keep them at heart and in minds at all times. Don’t burn your bridges. Eventually – things will return to normal and you will need your network around you.
2. Cash Flow / Debt Recovery
There are some basic steps that can be taken by business leaders facing cash flow issues which may be enough to stabilise the business and mitigate short term risk. We can help with:
- Renegotiating payment terms for goods and/or services. You may be able to negotiate a repayment plan or extend the payment due date which may buy your business a bit of time.
- Else collect overdue payments for many clients on a regular basis but can also recover previously written off debt that you may have thought was irrecoverable. We have a proven track record of recovering debts of any size and if you need help in this area we could give your business a welcome boost to cash flow in a relatively short space of time.
- Top Tip – If your business is considered financially secure – you may wish to support your suppliers by paying outstanding invoices either ahead of schedule or on time. This small but necessary act may make the difference between your network surviving or going bust.
3. Commercial & Contract Law
Check your contractual obligations in compliance with UK law. Business leaders need to be up to speed with their legal rights and obligations under business-critical contracts including:
• Force Majeure – Many contracts will contain a ‘force majeure’ clause which identifies how parties’ obligations are affected by an ‘out of the ordinary event’ that impacts on their ability to perform. Be aware! Under UK law ‘force majeure’ does not have a defined legal meaning and the drafting of force majeure provisions varies from contract to contract.
• Doctrine of Frustration – If a contract doesn’t include a force majeure clause or, for whatever reason, there was never a formal written contract in place, there may be relief from obligations under a contract which has become impossible to perform, this would come in the form of a ‘doctrine of frustration’.
• Insurance – Do you have interruption insurance?
• Variation of Terms – The ability to vary ‘price’ or alter ‘delivery times’ may enable a business to continue to operate whilst not falling into ‘breach of contract’ territory. Rights to vary the terms of a contract may include:
• Dealing with an increase in costs
• ‘Change Control’ clauses
• Managing changes within applicable law.
• Termination rights – Worst-case scenario, you need to understand what your termination rights are.
• Limitations/exclusions of liability – Check whether liability under a contract is subject to any financial cap and check if certain types of loss are excluded.
Adam Gilbert, Else Solicitors commercial law specialist has seen a significant spike in instructions to review and advise on contractual agreements. If you require assistance with contracts please contact him via the main office number 01283 526 229 or via email firstname.lastname@example.org.
Many of Adam’s clients opt to take his expert knowledge and utlitise it within their business on a retainer basis. You can learn more about our Solicitor On Site service and it’s benefits here.
As workforces are being encouraged to work from home and observe social distancing, this will inevitably put pressure on personnel.
COMMUNICATION is key!
Business leaders may wish to think about the following ideas to support employees at this difficult time.
- Explore flexible ways of working, for example changing start and finish times to allow parents or carers flexibility to look after those who rely on them whilst still working their usual number of hours. Look to negotiate working hours to accommodate their change in circumstances whilst still meeting the needs of the business.
- Check in with your teams, hold regular remote team meetings – set them clear objectives so they feel motivated and focused on the priorities of the business. Don’t forget to give your colleagues and team members a call individually too – see how they are doing.
Else have an office wide WhatsApp group – we post everything from IT talk, light-hearted chatter to serious questions such as “What time are we having lunch?”…
- Embrace a new virtual world… use video or conference calling technology to speak to your clients and colleagues.
Keeping your team feeling connected and part of a team will be important during the isolation period. You can use virtual tech as part of your innovative communication strategy. We’ve heard about teams having lunch together, doing virtual group exercise classes like yoga (Yoga with Adriene is available for free on YouTube and is a particularly good resource) or playing games on apps like ‘Houseparty’. For the less tech savvy people in your teams – maybe send them a card in the post (assuming the postal service is operating as normal) “Royal Mail remains open for business” as of 26.03.20.
You may also want to seek government advice, refer to ACAS guidance and before taking any action – seek professional legal advice with regard to business contingency planning on the following points.
- ACAS and gov.co.uk have some really good information about the ‘Coronavirus Job Retention Scheme‘.
- If employers need short term cash flow support, they may be eligible for a ‘Coronavirus Business Interruption Loan‘.
- Employers have the right to tell employees and workers when to take holiday if necessary. For example, if a business needs to shut for a week, everyone can be told to use their holiday entitlement during that period. This will mean that WHEN things return to normal – your workforce won’t be all on holiday at the time when your business needs them the most.
- Amendments to staff employment contracts. An employer may need to close down the business for a short period of time or ask staff to reduce their contracted hours, if this is the case – communicate with your staff as early as possible and throughout the closure.
5. Property – Landlords & Tenants
The Coronavirus Act 2020 Chapter 7 has confirmed with Royal Assent that;
Commercial tenants who are unable to pay rent due to the impact of COVID-19 have protection from forfeiture of their leases until at least 30 June 2020. The provision will only delay the right to forfeiture – it will not affect a landlord’s right to claim forfeiture or recover rent after the three-month period ends; and
For Residential Landlords & Tenants,
- New social or private rented accommodation evictions are suspended during the period of national emergency.
- No new possession proceedings through applications to the court are to be commenced during the crisis.
- Landlords will also be protected as 3 month mortgage payment holiday is extended to Buy to Let mortgages.
If you need any advice relating to commercial property forfeiture or guidance for residential Landlords & Tenants please contact Andy Rudkin on 01283 526239 or email him directly on email@example.com.
How Else can help
These are very strange times indeed – but we will get through them and when all this has blown over, we need our businesses to have weathered the storm. We can then rebuild them to be stronger and more resilient than ever.
If we can help you and your business during this time please call us directly on 01283 526 200. Please refer to the Meet The Team page on our website to access individual contact details and don’t forget – we can also offer appointments through video conferencing technology. We can and will continue to offer you the pragmatic and professional advice you have come to expect and trust from the team at Else.
Legally speaking – we’re on your side.