The last few months have been a challenge for most people, but most certainly for business owners as they have had to deal with enforced closures, mandatory changes to how they operate and additional requirements to make the workplace safe. All of these have come at a cost, both in time and in hard cash, and many business owners will now be faced with making a decision about what they do next, which in times of upheaval and uncertainty can be difficult.
One of the main sources of stress centres on uncertainty and what we can or cannot control. The Covid-19 pandemic has been particularly difficult because it has been something which has been outside of our control. When the lockdown was instigated, business owners had no say in what was happening to their businesses, many just had to stop trading without any exit strategy. Admittedly, the Government’s financial support has been helpful for many business owners (deferral of VAT, the Coronavirus Job Retention Scheme (“CJRS”)) but there have been many directors who have been unable to benefit from that assistance, and yet more who will be concerned about how they manage their business going forward. The stress caused by the pandemic will be causing many directors to have sleepless nights.
Whilst you might be surrounded by a great team of people, for many business owners, they are the ones making the decisions about the direction of the business, reducing the staff numbers, especially in owner-managed businesses where the directors are the shareholders. It can be difficult to discuss those issues with employees and it can quickly become very overwhelming, especially if you subscribe to the “a trouble shared is a trouble doubled” theory and are not keen on sharing your business challenges with your friends or family.
There will often be conflicts between doing the right thing for the business and doing the right thing for the staff, especially when the business is distressed and you have a loyal workforce, some of whom may have been there from the outset. Where business owners are looking to exit the business (for whatever reason) making the decision to move on can be a difficult one and it can be hard to decide what really is the best thing for all involved, especially if you have nobody with whom you can bring into your confidence.
Regardless of whether your business is struggling for cash or not, some business owners may now be thinking about whether they want to exit the business and there is nothing wrong with that. There are different ways in which you can do this – you might want to hand the business down to the next generation or see whether someone else might want to get involved. On the other hand, it might be that you just need to share your challenges with someone independent, and agree a strategy with their assistance.
Many businesses have been forced to revisit their operations as a consequence of the pandemic, and if you currently feel like you have had enough, taking stock before you make a final decision is a key step. The best way to ensure that you do what is right for you and your business is to make sure that you are aware of all of the options (both formal and informal), including the benefits and risks of each, to give you peace of mind.
We have been assisting clients during the lockdown by talking through the options that are available to them. This has included businesses which are looking at downsizing, businesses which are looking at restructuring their operations and business owners who want to find an exit. Some of the options may include a formal insolvency process, but often the insolvency process is just a part of a wider restructure to return the business to profitability.
Sometimes the solutions might not seem obvious, but there will always be one, it just might not be what you are expecting.