Slow business cycles provide a unique opportunity for companies to evaluate important and often overlooked aspects of their operation. In short, this “down” time offers business owners and executives a chance to get their affairs in order.
Employment policies, such as vacation and leave policies, whether or not contained in a company employee handbook, should be reviewed and updated periodically. Employment termination policies should be looked at carefully if staff reductions are planned. Obtaining releases from terminated employees, in exchange for severance packages, may help to avoid litigation. Non-compete and non-disclosure provisions should be in place to deter departing employees from taking valuable company property when they leave.
Customer and supplier contracts, work orders, invoice forms, and other documents used in the ordinary course of business should also be looked at and, if necessary, updated and improved. If these documents have not been reviewed by an attorney, now would be the time to do so. If you are experiencing increased difficulty in getting paid from customers, you need to look at ways to improve collection.
Another area of operation which is overlooked during busy times is internal security, especially for your computer, office equipment, files, records and the like. One way to protect your important data and records is to restrict employee access. You may have concerns about employees’ personal use of the internet and the company computer during business hours. Of course, it is essential that good back-up systems are in place. Devices to prevent the theft and/or destruction of valuable information should be installed.
Corporate books, which usually contain original incorporation documents, stock certificates and the like, should be looked at and updated. Often, companies move but fail to change their incorporation documents to reflect this. If the business is owned by more than one individual, a shareholder, partnership or operating agreement should be in place to protect the owners’ interests upon the death, disability or retirement of a shareholder or partner. Minutes of shareholder and board of directors meetings should be kept. At a minimum, major corporate actions should be recorded in writing.
Slow business cycles can provide a unique opportunity to review and modify some important aspects of your business. The changes made will likely prove valuable in avoiding litigation, theft and collection problems.