What should small businesses have learned from the COVID pandemic?
As we emerge…
It is with some guarded optimism that we seem to be emerging from the COVID-19 pandemic. The impact of the pandemic has been profound on so many levels. As many small businesses regroup, their owners should take a moment to consider how the crisis highlighted the importance of planning. Here are a few areas business owners may wish to focus on…
- Succession Planning. Now more than ever it is important to ensure that your governance documents such as bylaws, operating agreements, shareholder agreements and partnership agreements address contingencies for the death or extended incapacity of business owners.
- Force Majeure. In the law, “force majeure” (literally translated as “superior force”) is a contract provision that relieves a party from performing the contract when circumstances beyond the party’s control arise and make performance commercially impracticable or impossible. The pandemic has illustrated why business owners should give careful attention to negotiating force majeure provisions in significant contracts.
- Mergers & Acquisitions. It is hard to overstate the impact the pandemic had on the market for businesses, as well as transactional challenges such as access to capital, valuing businesses in light of operational disruptions, the limited ability to undertake in-person due diligence, and delays caused by reduced access to regulators and other key players in the M&A process. Transactions in the future will no doubt need to consider planning for similar such market disruptions.
Conclusion…
The COVID-19 pandemic has dramatically changed the way we do and think about business. Hopefully, the worst is behind us. However, important lessons have been learned and illustrate why careful, and sometimes creative, planning is so important for small businesses. Please feel free to contact me with regard to doing business in the post-pandemic world.
PLEASE NOTE: This blog is merely for the general interest of the reader. It is not legal advice or opinion and it does not create an attorney-client relationship. Please call me at 973-921-0600 if you’d like to have a free initial telephone consultation or learn more about me or my practice. Thank you.