Business Continuity

What can be done without contemplating on termination of business?

by Victor Cherubim

With lockdown slowly easing small businesses are looking back to what needs fixing, or to be re-examined. In this time of uncertainty, they want to have their bases covered financially as well as professionally. They have a lot of thinking to do about their professional goals. They are amid trying to see if there is not some way to approach things differently.

They face a time of monetary shifts. How to make up the money they have lost. They need additional information wondering what happens to their various contracts that they have entered, especially if the lockdown has affected them in such a way, where the contract can no longer be carried out.

Most legal contracts generally include a “Force Majeure” Clause. The clause allows a contract to be suspended or extensions of time provided to carry out the obligation each party has in line with the terms of the contract. This clause comes into play if either of the parties to the contract cannot fulfil it because of events which could not have been predicted when the contract was originally entered into and if the same events are beyond the control of the signatories.

In this instance they need proper legal advice and guidance whether their contracts are covered under this Force Majeure clause. Should the contract lack such a clause the worry for a small business or individual of default on a contract, that they are likely to be sued for breach of contract.

However, they may be eligible for defence called “Frustration of the Contract”. This may bring a contract to a premature end. Thus, small businesses need a strategy to overcome their problems and it is important to get legal and business advice prior to applying for bankruptcy proceedings.

What can be done without contemplating on termination of business?

Business continuity is a key phrase whenever a business large or small contemplates updating, testing their disaster recovery plan, generally referred to as Business Continuity Plan (BCP).

A Business Continuity Plan will have at its core Risk Management procedure. But no one saw it coming when COVID-19 struck, or rather not “in terms of the scale and spread of its spread” and especially a risk of a global pandemic.

This COVID-19 Risk is, according to many observers, going to be a permanent feature, whether we like it or not, say many analysts.

A Business Continuity and Risk Management has taken on a whole new priority now, especially with almost all businesses globally in lockdown, on an unprecedented scale never seen before.

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Business Risk Landscape

The world of work has changed. Measures have been initiated by governments around the world to safeguard continuity of work, by preparing emergency communication planning, identifying alternative sources of labour, assuring supply chain, preparing policies on payment for work from home and on furlough, considering possibilities of healthy working practices among others, during lockdown.

But small businesses have a much more difficult assignment, a much more difficult decision on return to business continuity after lockdown is eased. They must consider other possibilities. They include redundancies, re-finance, trading practices, changes to product, services, and basis of interaction with customers, as well as tough choices about staff levels to keep their business profitable.

This is no easy task. To do this they need expert advice not only on how to update contracts to changing working hours, make temporary staff layoff, plan a watertight redundancy process, if necessary. Redundancy is a complex process that requires legal input and takes time. Employees still have notice periods and can claim unlawful dismissal.

Scenario Mapping

Besides, it is not only business continuity that needs a re-think. Scenario mapping is really an important tool in the days ahead. Why not consider your worst case scenario, however tedious and painful it may be and work back? What are the protective measures that would need to be taken to avoid it? If the worst case becomes your reality, what is is your plan of action?

See also ways to tighten your belts, extra cost cutting, stager not only hours of work, but also large planned expenditure.

See the other opportunities opening, like a voluntary pay cut, say 20-30%, flexible and remote working.

But most of all “be kind, be thoughtful, be considerate and work with not against people.”