Change: how you can maximise new opportunities?

By Tim Field, Birkett Long
I am sure every business owner will be only too aware of the difficulties caused by high inflation, rising energy costs, increased interest rates and the forecasted slowdown in the economy.
Published in Suffolk Director Magazine Spring Summer 2023

Legal: Birkett Long LLP

So, now might be a wise time to consider what your key aims, and objectives should be for your business, whilst also maintaining an eye on where challenges and difficulties may arise.

I cannot give you an answer as to when borrowing may become easier, supply chains faster or recruitment simpler, but what I can do is give some guidance as to how having robust contracts with both flexibility and certainty, may provide your business with the most potential to maximise new opportunities whilst protecting itself when times are tough.

Managing supply chains

Managing a supply chain is often crucial to the success of a business; if a business is unable to receive the core components of its product, the production line will slowly grind to a halt, orders will remain unfulfilled, customers will become frustrated and ultimately look for alternate suppliers with potentially catastrophic effects on a business.

We have seen many examples of supply chains slowing, whether it be difficulties in obtaining raw materials from Russia and Ukraine as the war rumbles on and sanctions increase, or the time that it takes to get items through customs as border controls increase because of Brexit.  However, as businesses look for greater levels of efficiency, economies of scale and cost savings, it can often be appealing for a business to look to a single supplier for a core component so costs may be lowered and profits increased.

Any good supply chain, whether comprised of a single ‘just in time supplier’ or multiple different suppliers, must have robust contracts in place to ensure it is protected if the worst happens, and deliveries are not made on time, are short, or some other problem arises.

It can be helpful for supply contracts to include provisions providing for quarterly meetings between supplier and customer. This way it is possible to identify if there are likely to be any future problems in meeting demand. Clauses relating to forecasting can also be helpful to manage expectations and ensure that parties are clear as to what requirements the other may have for the next 3, 6 or 12 months.

In difficult times, communication and foresight will be important. Should the worst happen and there is a breach of contract, including specific provisions relating to liability and any limitations on such liability can be really helpful in ensuring parties understand the consequence of any default.

Are you fit for new technology and the digital world?

It seems like every day there is a new development in the digital and technological world, whether it is new forms of artificial intelligence, the Metaverse, blockchain technology or crypto assets.  New technology is often great for businesses, offering a new opportunity or more efficient way of working.

However, it is important to understand how such technology may impact upon your business and the way you work. Artificial intelligence may be great for managing, targeting, and developing customers, but what about the potential negatives of discrimination, exclusion and manipulation?

It is likely that any business wishing to deploy artificial intelligence within its business, particularly if it will interact with client personal data, will need to update their GDPR records and notify those customers. When was the last time that your business reviewed its GDPR processes and documents?

GDPR is something that should be regularly reviewed and updated as data processing functions change.

The Metaverse is gaining increasing media attention. On the face of it, the Metaverse may appear to be all computer games, video calls and social media, but there are real ways in which businesses are now exploring and using the Metaverse.

Whether it is seeking better client engagement, enhanced shopping experiences or new advertising opportunities, the Metaverse provides a range of innovative opportunities for businesses new and old.

Operating in the Metaverse will also no doubt lead to more opportunities for businesses to explore other technological advances. Whether it be the use of NFTs, crypto currencies or e-wallets, there are a wide range of changes that are on the horizon for how we will all do business.

All these changes bring with them their own unique legal issues, from intellectual property issues to new contractual arrangements it is important to ensure that your current terms and contracts are fit for the digital world.

Is your business thinking about Environment, Social and Governance (ESG)

Whilst ESG reporting is predominantly only a statutory requirement for large companies, more and more employees are keen to understand and know what impact their employer (or potential employer) is having on the environment and what steps they are taking to minimise any negative effects.

We are not necessarily advocating for all businesses to produce carbon impact statements or provide modern slavery statements: we do however believe that businesses do need to be aware of their footprint and be able to demonstrate to employees, supply chains and customers that they are taking appropriate steps to reduce any environmental bearing and are generally self-aware of their actions.

Small steps such as seeking to reduce single use plastics, introducing a recycling policy, promoting mental health first aiders, supporting local good causes or charities, and demonstrating good governance all help businesses display their ESG credentials.

With the environment and social responsibility, a key topic for millennials, how your business demonstrates it is a ‘good’ business will undoubtedly impact upon its future success.

Change: how you can maximise new opportunities? 1

Tim Field is Senior Associate at Birkett Long LLP which has a team of business experts who can assist with any legal issues with the running of your business. 

T: 01206 217366
E: tim.field@birkettlong.co.uk

Or visit www.birkettlong.co.uk

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