How to Resume Your Startup After Lockdown 4.0
Once the lockdown is lifted and normalcy returns, many startups will have to examine how they will work. They should pay serious consideration to rent an office in a coworking space because such an office is virtually immune to the impact of a pandemic induced lockdown.
The current lockdown is not the last; there will be others in the future. Startups have to take this fact into account- in the future, their business may be adversely affected by lockdowns.
Importantly, COVID-19- in addition to costing precious lives is creating behavioral changes that will have a lasting effect. Social distancing measures will likely be followed for months.
Companies with offices in coworking spaces will rapidly reach the same level of efficiency they had before the COVID-19 pandemic.
The same will be difficult to say about businesses working from traditional offices due to challenges of conventional Real Estate leasing terms.
Every coworking space is mindful of the threat posed by airborne viruses. It has taken steps to ensure the safety of those working inside is not compromised because Co-Working spaces are home to many start-Ups and SMEs.
These companies are connected globally and are more vigilant. The same cannot be said of traditional offices; they have no measures in place to combat the spread of pathogens.
Visitors will expect that their and everyone else’s hands be sanitized before entering a building. Coworking spaces are likely to keep such measures in place for a long time. Regular offices don’t have the resources or knowhow to do the same.
A distinct advantage of leasing offices in coworking spaces is that such facilities have zero downtime. For instance, when the lockdowns are lifted, it will take several days for traditional businesses to get up to speed.
Startups operating from traditional offices will take some time to reach the same level of efficiency they had before the lockdown. They may need to re-install infrastructure and procure supplies.
On the other hand, startups with offices in coworking spaces will hit the ground running once the lockdown ends because coworking spaces don’t have an off-day. Even during the current lockdown, many are being managed by minimal staff.
How to resume after Lockdown 4.0
To understand what can and can not be done at the time of lockdown and curfew, Entrepreneur India spoke to lawyers and experts who shed light on what should be done next:
Lawyer, Sonam Chandwani, Managing Partner at KS Legal takes us through the essentials that every company needs to focus on, at the moment.
Protect & Protocol-
Protect your employees and follow government orders.
Liquidity & Plan-
Companies should ensure adequate liquidity to weather the corona-storm. Vital questions to ask your team are – whether we can withstand some more poor quarters if the economy sinks? Do we have contingency plans? Alongside answering these questions, companies should focus on timely payment of statutory taxes and dues along with employee salaries and thereafter model their cash flow, P&L, balance sheet and identify triggers that might significantly impair liquidity.
Pay Your Taxes –
“March-ending” is just around the corner. This implies timely payment of taxes and meticulous tax planning for the coming months to avoid penalties.
Force Majeure Clause-
Companies are worried about the consequences of the non-fulfillment of their contractual obligations. A provision that protects companies from such defaults is the – force majeure clause – which defines events that excuse the non-performance of a party. A contract may either explicitly list all qualifying events, or generally define a force majeure event as “an event beyond the parties’ control”, leaving room for interpretation. Thus, companies must look for examples of relevant language such as “disease,” “epidemic,” “pandemic,” “quarantine,” or “acts of government,” which may be interpreted to include the COVID-19 outbreak and excuse its non-performance.
Review The Contract-
Read the fine print of all your contracts, revisit and renegotiate the terms of engagement keeping in mind unforeseen events and its impact on provisions of – engagement, termination, defaults, to name a few. Parties should also carefully review their subcontracts to determine their rights, obligations, and potential for recovery.
This global crisis will change a lot; however, it is simply about staying safe and making the best of the resources.