Disruption is a great catalyst for reflecting and reviewing where you are and what the future might hold. This has never been more relevant than at this moment, with business turned inside out and backwards by the forced lockdown and a slow projected road to recovery.
Government intervention to cushion the impact of Covid-19 on business has been a lifeline for many. The Job Retention Scheme and business loans may not be perfect but the Treasury, rightly, prioritised urgency over perfection.
The support helped many businesses to ride out the initial shock and to survive. But that level of support can’t continue indefinitely. As the threat from the virus recedes, so will the market support. This is when many businesses will be at their most vulnerable. Government intervention to cushion the impact of Covid-19 on business has been a lifeline for many. The Job Retention Scheme and business loans may not be perfect but the Treasury, rightly, prioritised urgency over perfection.
The natural focus for many businesses is rightly on winning work and delivering healthy profits. Many probably paid less attention than they should to some of the more mundane, but nevertheless, very important aspects of the structure and protection of the business, should the worst happen.
The current Covid-19 may not be the worst that can happen, but it is certainly bad enough for many to think beyond the day to day operations. It is a time to take stock and put plans in place to ensure that the business can enter the restart phase, when we get there, better prepared for any further disruptions.
In reality, most disruption to businesses is not caused by a world-wide pandemic, but by things much closer to home, such as illness, accident or incapacity of owners or fellow partners. This is an area where familiarity often breeds complacency but it should not be dismissed as it is simple and very cost-effective to fix and save a whole host of potential problems that can threaten the business.
One simple fix is to organise a Business Lasting Power of Attorney, or LPA. Many people are familiar with LPA’s and indeed may have them in place on a personal level, as a means of protecting their interests and wishes if they are not in a position to make decisions for themselves. Exactly the same thought processes should be applied to your business as it is to your personal life. In the event you, or any personal of significance within the business, in unable to make decisions, who is running the business? Who is managing the bank accounts? Who is authorised to deal with legal and financial issues, or even pay the bills?
Everyday critical decisions cannot be made, bank accounts will be frozen, information cannot be accessed. An LPA can put a process in place of who can make decisions and act on behalf of the business on your behalf, to minimise disruption. This way you get to choose to who those people will be and they themselves are aware to make the planning, should the worst happen as seamless as possible.
The format and scope of the LPA will vary depending on the legal structure of the business and on how you want the business to be managed. The key is to sit down and decide what you want and then we can translate that into the relevant legal documentation and process.
It was often described as costing less than businesses spent on stamps, but I think in the digital age it is probably more relevant to say than you spend on your telephones and broadband! Either way it is a very small investment in not only protecting your interests and those of your dependents and colleagues in the future, if the need arises. It is classically one of those things you hope you never need – but hope is not a sound reason not to do it.