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Is my business essential? Should I have stopped trading? By Paul McGlone

This is not as tough a question as it may first appear, but there is some understandable confusion which we need to eliminate.

Your business should try and adjust to carry on:

If you can operate safely.

Your business remains viable.

A consistent point that appears to cause confusion circles around the words ‘essential’ and ‘necessary’.

The Prime Minister’s speech on 23rd March 2020 told everyone in the UK that they “must stay at home”, except for four limited reasons.

The fourth reason was travelling to and from work.

The government has NOT instructed the UK to stop working!

That same point continued to clarify that this is “only where this is absolutely necessary and can not be done from home”. Unfortunately the use of the words ‘absolutely necessary’ have then been repeated out of context and incorrectly interpreted by some as ‘people can only work if absolutely necessary’ or if delivering ‘essential services’.

Following the speech, many staff and employers decided their business would not be viewed as delivering essential services to key workers, and decided they needed to close or suspend trading. Decisions made on misinformation are incorrect, will cost the economy in the long term, hurt staff and businesses, and in the short term have already led to avoidable redundancies and cutbacks.

If a role can not be completed from home then it is absolutely necessary to travel to work!

If your business type was specifically identified in the speech or subsequent notices because for example, it sells what is viewed to be non-essential goods, operates a library, a place of worship, a gym… then you do not need to close your business as a whole if you can restructure to comply with the new instructions.

The principle point of the changes imposed on us is to limit the spread of the disease, and unfortunately venues such as shops and organisations where people come into close contact increase the spread of the disease. Before suspending trading there is a moral obligation, and in many cases, contractual responsibilities on business leaders requiring them to try and find a way to operate in a new way that will not spread the disease.

For most shops, this means closing their doors to the public but continuing (or starting) to operate online, in fact potentially growing that part of the business at a time where the public need online suppliers more than ever before. For places of worship or gyms that may mean that they operate via social media or video.

We need to comply with the instructions and guidance issued by the government, and you ALSO need to consider if and how to keep going.

Business leaders that do not put in the effort required to adapt are letting down their staff, and their customers, and the country as they move from contributing to the economy to becoming a burden on it.

So work travel and even your industry are not reasons to give in, so why should you stop trading?

Safety is the most important reason to stop some or all of your business. To operate your business you need to protect the well-being of your staff and everyone they come into contact with.

In this case, this duty of care means you need to establish if staff can travel to and from work, and can complete their work maintaining, for example, a safe distance from all other people. If you can not make changes to protect staff then you first need to discuss redeploying these workers to other safe functions in the business, or as a last resort, they may not be able to work.

In most working environments it is also appropriate to take reasonable steps to ensure that working areas and items your staff touch are free from the virus before and after contact. There is a risk someone may be infected by the virus sitting on a surface of items passed from one person to another (in or out of your business).

Reasonable steps may include enforcing hand washing, modifying processes for maintaining distance and good hygiene, cleaning items before and after contact, providing appropriate PPE. For some businesses several simple changes can be made, for others this is impossible and stopping work in parts of the business may be the only solution.

When considering safety you need also review all current systems, as changes may impact otherwise normally safe areas. Ensure staff do not feel duty-bound to do anything they are not competent to do, or that other safety measures are reliant on. You may be faced with a reduced workforce and new risks from anxious or distracted staff. All your normal safety needs to be re-considered.

As distancing and good hygiene are so central to containing the virus, and many businesses are already failing to enforce controls such as the 2-metre guidance, the government may step in and stop other types of work.

Government stopping more types of work will cause further damage to the economy, so business leaders should be managing and enforcing safety as a matter of urgently. There is help available for all safety considerations if you choose to use it.

The take away all business leaders need to have is that you need to keep everyone safe so that the things you allow to happen in your business do not spread the virus. Review safety, ask for external help if required, and immediately make changes to carry on safely.

Many functions of your business may be able to continue, especially if they are roles that can be completed at home, many staff can be redeployed to other roles or interim safe work. If you can not make the required changes you need to consider what happens to the specific staff affected and how that impacts on the viability of your ongoing business.

The second reason given above to stop trading is business viability.

Business leaders have a duty to try and find ways to safely and legally keep your business trading, making adjustments where possible to continue to provide products or solutions now wanted/needed by your clients. However, you also need to ensure the company remains financially viable with any changes you apply.

If the current products or services can not be provided because there are problems with your supply chain or customers have stopped all activity, you need to establish if your team and business can adapt to address one of the areas that need additional product or services.

Business leaders need to ensure the fundamental of sales revenue minus total operating costs still results in a viable business…even if this business is very different from the one you planned at the start of the year!

Increased operating costs from activity such as applying additional safety measures, managing around staff absences, increased material costs, mobilisation of new products or services, reduced efficiency, all may be significant.

A fundamental check may demonstrate that a previously profitable company will now operate at a loss with these temporary measures in place, so the business leader will need to establish if they have access to adequate cash to survive this loss-making period, and forecast how the company recovers. It may also reveal that with some changes, such as providing alternative products or services, the period of loss can be reduced or eliminated.

The government recognise that keeping businesses going is essential, and has released a series of measures to support businesses and their staff. All business leaders need to familiarise themselves with these as some measures may apply and could provide the cash and support required to keep the company trading, protecting jobs and the economy.

There is, without doubt, some complicated and perhaps overwhelming changes needed for every business, but we have a duty to make this work. Help is available to review every part of your business and to help you navigate the days weeks and months ahead.

Paul McGlone
Paul@GroveShaw.co.uk

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