As the exit strategy from Coronavirus is being unveiled and businesses look at what their “new” trading requires, getting up and running will present a number of challenges for many business owners. However, the business you ran before Coronavirus may not be the one to which you eventually give a trading renaissance to.
The steps required will vary greatly, according to your sector. Some will fall under ‘housekeeping’. Businesses in this category will likely need to assess their stock levels and ability to deliver their offering via their former channels. Calculations of how fast output can return to previously actual or anticipated levels may be required, along with order prioritisation. Machinery and premises checks, safety audits, a reallocation of work duties and a recall of equipment provided to those working from home are all likely actions.
Contractually, it may be vital to assess commitments to suppliers, determining whether these can realistically be fulfilled, or whether agreed terms can change. Some businesses may need to invoke a Force Majeure clause within contracts, if it references epidemics or civil emergencies as a basis on which to escape contractual obligations.
Cash flow management will be key. Decisions on which creditors to pay first may be vital. Interest on business loans accessed during the Coronavirus pandemic will need to be built into financial strategies and late payment by customers should be anticipated. Considering Trade Credit insurance could be advantageous, as it would enable you to be paid, regardless of customer practices.
Lessons learned from the pandemic should be reflected in your business going forward. Experts suggest that reliance on long lead-time global supply chains may not be wise, if suppliers closer to home can be sourced. Shortening supply chains may provide more stability, if the same products, made to the same quality, can be produced more locally. Micro supply chains can be more agile and flexible with contracts, scaling up or down, as required.
Cyber security measures and appropriate levels of cyber insurance could be a must, if your business has pivoted into online retail or adopted cloud-based technologies and video conferencing to facilitate remote working. Businesses are likely to have experienced change to differing degrees but, where change has occurred, it is vital to ensure that the right insurance covers are in place, as well as ascertaining whether new covers are required. Additionally, risk assessments should be reviewed as soon as the doors re-open for business. It is essential to check that no covers ran out during lockdown or were cancelled as a cost-saving measure and are now required once more.
What has shone through the UK during this pandemic has been a spirit of collaboration and this needs to form the basis of relationships with suppliers going forward. The same level of collaboration should be adopted between yourself and your insurance broker. Brokers may be in greater demand than ever, as businesses emerge from lockdown as changed entities and with potentially new and dynamic strategies for a changed business world.