20 Navigating Suppressed Markets: Legal Options – Natasha Cluckie – Legal Advisor – With the current economic conditions and suppressed markets, more and more businesses are running into trading difficulties and are wanting to explore their options going forward. Political, economic, and regulatory factors play a major role in determining the best option for your business moving forward. The consequences of supressed markets and trading difficulties go without saying and can include reduced profitability, increased running costs and reduced productivity. Set out below are some options to consider in navigating supressed markets and difficult trading times. The severity of the circumstances facing a business will determine the extent of the measures that need to be taken. Some of the measures set out below are more drastic than others and careful consideration must be given before implementing such measures. Conduct a business risk assessment In determining which measure to implement, you need to understand the strengths and weaknesses of your business and the risks facing your business. Conducting a business risk assessment and planning your strategy around those risks will help minimise and/or mitigate against those risks identified. This will identify potential weak spots in your business and allow you to make the necessary adjustments. Commercial considerations Assess your ability to meet your contractual obligations and demands from your customers, suppliers, contractors etc. Reduced revenue streams from suppressed markets may mean you require reduced services from your contractors and/or less labour from your workforce and how you deal with the downturn is important for your future relationships with those customers, employees, suppliers, and contractors, when circumstances improve. A short-term solution may seem attractive, but the long-term damage that may result could be worse for your business. Review your contracts and current arrangements for any penalties or red flags before making any decisions. A declaration of force majeure may assist you in the interim and until you are able to determine the full extent of the impact of the supressed markets and your ability to satisfy the contractual obligations as a result. We would recommend seeking legal advice before implementing force majeure as the consequences may be serious for your business. “Go Lean – Just Enough Employees, Equipment, and Space” Labour options With labour-intensive operations, labour costs form a significant portion of the operating costs
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