Best in Law: Six Business Lessons Learned from 2020
It Was a Year Like No Other, and BB&K Business Attorney Nancy Park Shared Some Takeaways
By Nancy Park
By now, we’ve all seen plenty of retrospectives summarizing 2020, and can agree it was an epic year like no other. The COVID-19 pandemic, natural disasters, social justice riots and political insurrection brought many lessons and new rules for businesses as they regroup and move forward.
All of these events and situations, which seemed unheard of or unreal just a year ago, have created a playbook for businesses to follow if they are to safely and successfully navigate whatever threat comes next.
As a real estate and business law attorney, I’ve advised many clients through some serious challenges in the past year. Below are the six new rules to help businesses navigate times of trouble and uncertainty:
Be Nimble and Flexible
Be ready to act and strike fast to obtain products to sell, to sell what you have or offer a new or now-needed service. Think about new and old products in new ways or in different presentations. A think-outside-the-box approach will help to work through constraints on supplies, sales, customer contact, co-worker interaction and anything else that arises.
Know Your Contracts
Have copies of every fully executed contract you have signed (not just drafts). Know who your advisers are and consult them as needed. Ask others for recommendations if you don’t have the right advisers, which include: an accountant, a lawyer who can advise on contracts and/employment issues, a banker and others.
Be wary of do-it-yourself solutions — they may cost less but nothing can replace the value of an expert who listens to you and your situation. Read all contracts carefully; don’t just assume you remember what you entered into.
Know Top and Bottom Lines
Where and who do your sales come from? How much are they? Who are your suppliers are? Where do their products originate? How much do you spend in the course of your business cycle?
There is no substitute for good record keeping and a business owner who reviews the check register and accounts payable to understand where money is being spent during the month, and where to adjust expenditures.
Safety First
Follow laws and suggested safety precautions for employees, customers and others with whom you deal. Masks, cleaning, personal protective equipment and physical distancing are all important, as is an awareness of the current federal and local regulations.
The California and U.S. Occupational, Safety and Health Administrations and cities, counties and the state have all passed various regulations and guidelines for employers, and in some cases these have significant cost implications for business owners.
Be sure to watch for announcements from the state and check city and county COVID-19 websites for updates on new laws and requirements.
In the event of acts of insurrection, riots and demonstrations, refrain from engaging with participants and take advantage of aid offered to help businesses address both civil unrest and the pandemic. Sign up for text or other alerts from police or other central information sources. Keep informed!
Communicate
Stay in touch with your lenders, vendors, customers, neighbors, landlords, stockholders or others who might want to know about your business and whether it is (still) operating and to what extent.
If you have a loan that might have issues with the repayment source, like sales, then your banker needs to know now, before there is a problem or a delayed payment. Similarly, your vendors need to know if there will be slowed payments and why, and you may be able to negotiate different terms if you can adjust the collections with the payments.
Landlords have a particular interest in their tenants’ success and are hindered now from taking any legal action by California laws, at least for evictions. Know that they will not hesitate to use their legal powers once they have them back.
Taking action now to communicate issues and reach a negotiated solution for any slowdown or abated/delayed payments will help avoid later headaches or intolerance due to lack of communication.
Be a good business citizen
Treat others with respect and fairness and with understanding of their difficulties. If you are able to make accommodations, then do so. You don’t have to compromise your own business, but sometimes a minor adjustment is easy and helps out another owner. Adjustments or accommodations for others will be appreciated and remembered by likeminded business owners.
From my perspective, there will never be another time (or it seems unlikely) when our perspectives will have changed so much in such a short period of time.
We’ve all seen shifts within ourselves on perspectives on life in general. We’re all using new language in connection to business, including terms like home schooling, force majeure, in-person meetings, shelter-in-place, work from home, physical distancing and face masks. (Thinking back, I always thought it strange when I saw someone wearing a face mask on the street or on a plane before last March).
There is a new appreciation for time at home, and even a pause that we have been able to take. A literal stop and smell the roses for which I will be always be grateful. We have recaptured time from travel and meetings. But we’ve lost so many interactions and time with those who don’t have that much time left in their lives, as well as those who lost their lives to COVID-19.
From a business and legal perspective, we can try to move on, monitor our business operations, act wisely and prudently, and continue to follow sound business principles to rise successfully on the other side as a thriving (or at least surviving) business having weathered the storm.
This article first appeared in The Press-Enterprise and other Southern California Newspaper Group publications online on Feb. 27, 2021. Republished with permission.
