Its all changed, but good business practice still applies

This is an incredibly difficult time for everyone, both personally and professionally. 

I’ve rewritten this blog once or twice as I don’t want to understate or show any lack of empathy with the difficulties some businesses face at the moment.

For business owners, our woes don’t compare with key workers and those on the front line in the NHS, but there are huge challenges nonetheless.

For some businesses, especially those in retail, hospitality and leisure, turnover has dropped almost instantaneously to zero. For other businesses there has been a sharp decline and the future is uncertain. It’s as if all the day to day challenges we all face as business owners have been crammed into the space of a few weeks and magnified several times over.

It’s tough and we are all trying to navigate our way through.

The Government financial support measures will help many businesses through this period. As business advisors we have spent much of the last few weeks advising our clients on what support measures apply to them and how they can make a claim. For some its a lifeline, for others they have slipped through the net, at least for now and are doing what they can to get by.

Despite all the difficulties I want to argue that the basic rules of doing business should still apply. 

That is, it is incumbent on all of us to negotiate in good faith and only agree to receive products and services we can afford to pay for. If we’ve had a sudden financial shock and meeting agreed payment terms is not possible in the short term, we should speak to our suppliers and try to agree a mutually acceptable way forward.

Something which I believe is not particularly helpful or constructive is saying to suppliers, ‘Things are tough, I’m not going to be able to pay you for a while.’ Another way of putting this is, ‘I’ve prioritised things and paying you is not a priority.’

There have been well-publicised instances of some larger firms doing this and leaving their suppliers high and dry. In my own network I am aware that this has happened a number of times.

In some cases, as well as stopping payment, the customer was still expecting to continue to receive services until their situation improved.

Of course I get it that things are tough. Of course I understand that businesses want to hold onto their cash. Survival is their main objective.

But shifting their problems onto their suppliers isn’t helpful in the longer run. 

A sensible compromise is agreeing a reduction in the ongoing scope of services delivered to what is affordable and perhaps agreeing extended payment terms for old debt.

So everything is different but good business practice still applies.

As the Government has said, this will end at some point and more normal trading conditions will resume. 

Following good business practice during this period will ensure we have a better chance of emerging in good shape and with positive business relationships when the time comes.

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