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28 November 2021

Opinion from Adrian Leopard & Co

News impacting business from Adrian Leopard & Company - Insolvency Practioners & Mediators

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Preparing to re-open – what are the pitfalls?
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Preparing to re-open – what are the pitfalls?

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Caution caution caution! Don’t rush in and overdo it

It is exciting – the road map suggests dates when in particular the hospitality industry can re-open – pubs, restaurants, hotels, even night clubs are all now in the running to get going again.

And what is the trade saying? Well, the point of re-opening will be a watershed, one where everything will start to go right again or one where the anticipated insolvency or closure will be precipitated into whatever it is going to be. There is no elixir of life here, merely the opportunity to get back on your feet if you can. For the majority this is going to be a difficult time, even if you are able to come through the pandemic with funds to enable to you to start trading again.

But is there anything you can do to protect yourself? The answer is an emphatic yes. Certain things like your fixed costs are going to be there regardless. Can you afford to make up the arrears? Have you talked it through with the parties who will be expecting you to pay them? Is your landlord going to accept repayment over a period of time?

The most important thing you have to prepare for is what no one prepared for last time it happened – the reintroduction of lockdown and compulsory closure. And yet this was the thing which was likely to have been the easiest problem to predict. Increasing new cases, increasing hospitalisation and deaths – these were the signals but unfortunately the over-enthusiasm to get cracking again forced people to overlook the possibility. As a result, businesses reinvested in stocks and when push came to shove, much of that reinvestment was lost. What a disaster.

It is easy to say well get your food stock in in frozen form or buy your beer in bottles. Yes it is a hedge to do that but it may just not be the type of foodservice you want to offer or for which you have become known. But if the worst were to come to the worst, the waste would be limited.

I am normally a glass half full person but the fact remains you have to have disaster recovery procedures to break the fall.

Already great enthusiasm is being shown for the “al fresco” look. Businesses which can operate outside are already preparing and gearing up for it even though there is still some time to wait. It is good news that they have some notice period to be able to prepare but if you are an ale house, what ale are you going to get in and when do you propose to order it? And if you are a brewery, as we know it takes several weeks to brew beer. How much do you brew?

Once more during this rollercoaster year do you need a crystal ball or perhaps you can fix an appointment with a medium who can give you advance weather forecasts?

Alas – probably not!

But there is another thought – the continuing talk of a vaccination certificate or passport is still going on. Perhaps businesses will make it clear that entry to their premises will be conditional on holding such a certificate.

But although you cannot predict the weather or whether the restrictions will definitely be lifted or not on the suggested dates, a shrewd business can plan and ensure that it adopts a prudent approach to how it will open and trade. As a business you will not want the pandemic to get any worse than it already is; you will want new cases and deaths to continue to drop which they must if we are to meet the terms of the road map.

You will also need to try and predict the attitude of your customers. The news pundits are telling us that everyone is dead keen to get back to the pub or go for a meal in a restaurant. Do you really believe that to be true? Will yours be a safe haven for people who have not been vaccinated? Will business return to or even exceed former levels and if so, when?

For my money a cautious approach has to be the prudent one. There are so many unknowns ahead and we cannot be sure that the people will follow the rules in the interim. If you decide to buy perishable materials in readiness for re-opening do not over-order – that is killer number one. Order items that in extremis you can freeze and at least consume yourself in due time. Best of all arrange sources of supply where you can order daily and get just what you want for the immediate future. If you sell beer, stock some bottled substitutes – better offer a bottle to drink that run out altogether! For your fruit and veg, get out to the local market.

And so it goes on; you do not really need us to remind you how to run your business but if in any doubt, think carefully about the way forward. Making money is going to be hard work in the short term – you very much need to ensure that you keep what you can make!

Adrian Leopard 25-02-21

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Company Data

Adrian Leopard & Company is the trading name of Alderney Offshore Ltd, a company registered in Alderney, Channel Islands number 1220.

Address P O Box 1027, Alderney GY9 3AS

Registered Office Seldomin, Longis Road, Alderney GY9 3YB.

Adrian Leopard & Co is represented in the UK by 3CL (UK) Ltd trading as Adrian Leopard Associates.

Telephone enquiries may be made on 08449-4-08449 or 01684-230360.

E Mail [email protected]

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