Stage 1 of the Covid-19 lockdown is over and people are being encouraged to return to work where possible. Businesses need to prepare to re-open within safety guidelines in some sectors although other sectors, such as hospitality and leisure, will have to wait a bit longer.
Business owners will have to review all of the safety guidelines and consider the measures that need to be put in place before they re-open. But will re-opening be a viable option for everyone? Various grants and government support schemes have kept most businesses going so far. The Job Retention Scheme is being extended, which will help those businesses that still cannot open. However, those businesses that do open may no longer be able to claim for employees that return to work – even though the safety measures could severely limit the level of turnover.
There will be numerous factors to consider for businesses trading under the “new normal” conditions.
For office based business, some employees may have been working from home and may now actually prefer working from home. A two-year study by Stanford University, where a Chinese company had 250 employees working from home and a control group of 250 employees working as normal from their offices, showed that home workers increased productivity by almost 20%. Additionally, employee attrition decreased by 50 percent among the home workers, they took shorter breaks, had fewer sick days, and took less time off.
The business premises may be too large If workers continue to work from home or may be unaffordable if safety measures reduce income. Many business owners will be looking to their landlords for help.
Ultimately, some business owners will have to consider whether they can open at all. In my next article, I will look at the important numbers in a business that will determine its ability to continue. For sole traders and partnerships, it is important to take prompt action to protect homes that could be at risk if the business fails.
During the Covid-19 crisis, the government has suspended the “fraudulent trading” rules that might have otherwise made directors personally liable for additional losses caused by continuing to trade. Despite this protection, all businesses may need to be restructured and limited companies wound up so that the business can continue in a new structure.