Coronavirus consequences…right now, the majority of people are concerned with the physical consequences of the coronavirus, as well they should be. What people aren’t considering perhaps as much as they should be, however, are the economic consequences of the virus.
Coronavirus Consequences For the Economy and Your Business
“Wash your hands”, it’s the advice we’re hearing wherever we turn when it comes to the coronavirus. It’s incredulous advice – shouldn’t you have been washing your hands anyway? – that seems to downplay the severity of the coronavirus and it also feels a lot like asking people to focus on a tree rather than the forest.
Yes, we should all take responsibility for keeping ourselves safe and virus-free and part of that is being aware of the necessary safety precautions, but we should also all be doing our part to see the big picture as well.
What is that big picture?
While we’re all washing our hands and stampeding drugstores for paper masks, very few of us are considering the longterm impact that this global health crisis will have on our economy.
The Longterm Impact of Coronavirus
Whether you are a small business owner, a medium business owner, a large business owner, or a consumer, the truth is that the effects of the coronavirus are going to impact your life long after the immediate threat of illness has passed.
Production and Manufacturing Delays
With Chinese production at a halt, how are businesses going to source the products and materials needed for manufacturing? When production begins again, there is going to be a period of “catch up” where Chinese plants are catching up on delayed order fulfillment. This period is going to require overwork to eventually make up for the deficit which is going to increase manufacturing costs which is an increase that will pass on to businesses and consumers.
In the meantime, there is a shortage of products that depend on Chinese manufacturing which means that prices of these goods are going to skyrocket. This means that as a business owner, your business is going to have to raise prices which is going to impact your sales. As a consumer, you are going to have to reconsider purchases because you will be getting less for your money.
But this isn’t all…
As a business owner, you have contractual obligations both to those you hire and to those you work for. As the coronavirus impacts the economy these contractual obligations may be at risk. Take for example the following situations…
- You manufacture a product that relies on Chinese plants for production. You have a major client who has ordered 10 million of your product and you have contractually agreed to provide that product by a specified date. Since the Coronavirus has delayed production, you are no longer going to be able to meet your contractual obligation. Now, if you’re lucky, your client is going to understand – although they will still face the economical consequences of the delay. If you’re not so lucky, your client is going to pursue you for breach of contract.
- You are getting married in a month. You have a particularly huge family and have had to order supplies from a Chinese manufacturer. The manufacturer has agreed to provide these supplies by a specified date. Now you are on the other side of the coin. Your wedding is now going to need to be postponed or you are going to have to find an alternate source for supplies which may cost you more money because you now need faster production time. You are the victim of a contractual breach.
Employee Wellness Vs Employee Rights
As a business owner, your business relies on employees to function. It is your job to provide for your employees’ wellness while being mindful of their rights and of the health of your business. This is a very delicate balancing act. In the best interest of your employees and your business, you may decide to have employees telecommute. This change in how your business works is going to result in added expenses that you have not budgeted for, but expenses that your employees expect to be covered.
You could continue to require employees to come to work as normal, but should your employees get exposed to the virus while at work, does this mean that you are facing liability?
You could close your doors until the market regains its footing…but then you are responsible for putting a whole workforce out of business. This means that you face potential fallout here too.
So What Can You Do to Temper Coronavirus Consequences For Your Business?
The first thing that you need to do as a business owner is to retain an experienced and reputable attorney. Your attorney will be able to help you to navigate any tricky situations that arise as a result of coronavirus complications.
The second thing that you need to do is to look into business interruption insurance. This is a type of insurance that will cover the loss of income for your business that results from a disaster like an epidemic or natural disaster. This will not prevent the fallout that will undoubtedly result from the coronavirus outbreak, but it will help you to keep your business…in business.
Coronavirus Consequences Got Your Business in Trouble?
If you are facing legal consequences of the coronavirus or would like to prepare your business for every eventuality that may be caused by coronavirus fallout, it’s time to consult an attorney. If you live in or around St. Petes, Florida, Weidner Law may be able to help you. To find out how we can help, just give us a call today at 727-954-8752!