We are living through incredibly challenging times.
“Demand is going to be uncertain, and in some industries (travel, hospitality, etc) the reduction in demand is already looking dramatic. The key to surviving a period of lower sales is to manage your business's cash reserves as if your business life depended on it (and it probably does). Prepare a proper, thorough cash flow forecast, which is shared and owned by the key budget holders in the business. – keep this alive, use it every day, convene your own cash focused COBRA meeting (via video link obviously!).” Riding & Surviving the Rollercoaster Steve Jebson, BusinessDoctors.co.uk
It is clear that businesses of all shapes and sizes, their employees, owners and managers are already or will likely in the very near future come under considerable stress as they plan for the consequences of Government intervention, the onset of the viral spread and the collateral effects on suppliers, clients, customers, financial partners and lenders.
This means that we are going to have to think and act in ways that we have not had to so far.
Many of us will not have faced the realistic prospect of drastically reduced cash flow or the possibility of restricted credit lines or even breaching business borrowing covenants.
While each business is unique and faces its own challenges, the thought processes and actions plans are likely going to have to follow similar patterns.
Take a deep breath and start the analysis. Here are just a few of tips and guidance we have culled from the many useful articles and blogs that we are featuring today on our new Coronavirus Information Hub.
"Does your business have a continuity plan?
Now is the time for organisations to review business continuity plans and emergency activation plans. This will help mitigate the impact coronavirus will have on critical business functions, products and services.
The good news is that it is not too late to create (and implement) a plan. Knowing what must be considered and ensuring there is sufficient cash flow to keep the business afloat in an environment where demand may be dropping off, compounded by staffing problems, could be the difference between a business surviving or failing." The Prince's Responsible Business Network
"What are my duties as an employer?
Employers have a duty under health and safety legislation to take steps to ensure the health, safety and welfare of all their employees, so far as reasonably practicable, including those who are particularly at risk for any reason. Employees also have a duty to take reasonable care of their own health and safety and that of people they work with." FSB
"Business Interruption Insurance
In the context of coronavirus, a trigger for contingent business interruption could be what’s known as ‘notifiable disease coverage’. This is what many companies around the world, with suppliers or subsidiaries in China, are focusing on right now, according to Damian Glynn (pictured), head of financial risks at Sedgwick. But he added that many notifiable disease claims will be “difficult to quantify,” and referred back to the SARS epidemic in 2003 to illustrate his point." Insurance Business UK
"What about variations of contract- redundancies?
Businesses affected by a downturn in work may also consider putting in place other temporary measures to avoid the need for redundancies, such as introducing a temporary reduction in pay, working hours, or removing/reducing certain contractual benefits. Employers will need to consult with staff to obtain their agreement to these measures in the absence of any relevant contractual flexibility clauses or short-time working clauses." FSB
"Applying for Business Interruption Loans
The government has announced a new temporary Coronavirus Business Interruption Loan scheme, as part of a package of measures to help small business.
British Business Bank will deliver the loan scheme, which it says “will be in place in a matter of weeks” to support SMEs to access bank lending and overdrafts. Interest rates will be similar to current bank lending.
The government will provide lenders with a guarantee of 80 per cent of each loan – subject to a per-lender cap on the number of bad loans it can claim for." Smallbusiness.co.uk
We hope that our Coronavirus Information Hub will prove helpful and of be some comfort and also knowing that we will strive to continue to do our research to bring further useful guidance for your benefit.
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By the publications team at: Contracts-Direct.com
Publisher: Atkins-Shield Ltd: Company No. 11638521
Note: This publication does not necessarily deal with every important topic nor cover every aspect of the topics with which it deals. It is not designed to provide legal or other advice. The information contained in this document is intended to be for informational purposes and general interest only.
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