Case Studies

Case Study: Sole Trader

Mr. S. owned and ran a garage and repair shop, which he started 28 years ago. He had one major debt with a supplier and was having difficulty paying. The supplier, a big, national concern with their own legal/collection department was threatening to issue a Statutory Demand. Mr. S. called us in (Jan 2009) and within 2 weeks we had arranged a re-mortgage on his house and negotiated an “informal arrangement” with the supplier. The debt was settled at a figure, 30% less than the original demand.
Mr. S’s new mortgage was at a much lower interest rate, so his monthly repayments were less than before, even taking into consideration the extra money added to pay the debt. With the 30% saved, Mr. S purchased some new capital equipment to improve his general service levels and paid our fee.
From start to finish, it took a month to complete.

Case Study: Limited Company

Mr. C. ran his own Ltd Building Company. Through 2005-2007 he grew the turnover substantially. In April 2008 new business slowed and over the next two months dried up completely. A large construction company client, owing Mr.C a substantial sum, was put into liquidation by its bank. Mr. C. called us in (Sept 2008) as he was unable to meet his current debts, trade, bank and HMRC, due to a major cash flow problem. Mr. C’s case was a classic example of “over trading” with the inevitable, deteriorating cash flow, due to it’s under capitalised state and poor market conditions giving rise to overdue and bad debts.
Firstly we contacting all the creditors and got 28 days to investigate matters fully and prepare a “Statement of Affairs” both of the company and personally for Mr. C.—this to fully assess the situation and to see whether the company could potentially trade out of it’s problems, meeting it’s debts, with the help of either Informal or Formal arrangements. In liquidation the creditors would have received nothing.
One trade creditor, with more than 25% of the total debt and with Personal Guarantees from Mr.C, refused to participate in any solution, even though all the others, including the bank and HMRC were prepared to support a planned Company Voluntary Arrangement (Creditors holding 75% of the total owed must agree and vote to support a CVA)
The market deteriorated even more and it proved impossible to raise additional finance, especially as Mr. C and his business both had poor credit ratings and his house was in negative equity. The only solution was to put the company into liquidation and Mr. C. declared himself bankrupt.
Mr.C was discharged from bankruptcy after 9 months. He is now debt free, both personally and business and is employed earning good money. The family home was not lost in the bankruptcy.

Case Study: Sole Trader

Mr. G was a Sole Trader running his own business, who ran into financial difficulties due to a serious down turn in turnover (2008-9) He owed one supplier £10.000.00, could not pay it and faced a threatened bankruptcy petition. We stopped the legal action and settled the debt by negotiating an “Informal Arrangement” achieving both a reduced amount and staged payments over 12 months. His credit rating was not adversely affected.

Case Study: Limited Company

Mr and Mrs. W. had run their distribution business successfully for 30 years and had a great reputation locally for honesty and quality. Due to ill health they decided in 2006, to retire to France hoping they could keep the business (Ltd) running (as retirement income) under the management of one of their long-term employees. They sold their house and went out to France to find a new home, staying in contact with their Manager, by phone and email. They travelled back to the UK every 3 months to check how the company was doing and to check the accounts which were handle by an external firm of Accountants.
Initially all went well, but on one trip home in late 2008, they discovered that business had slumped,( due to the recession and bad management) and over £100.000 was owed to suppliers.
They stopped trading and asked us to handle the closure, settling all the creditors and collecting money due. Both Mr and Mrs W were insistent that all the creditors should be paid, even though the company was Ltd (their reputation and integrity were more important) and made £100.000.00 available, out of the proceeds of their house sale.
Leaving their business in the hands of other still cost Mr and Mrs W £65.000.00.net after collections
They now live happily in France and both are fit and well, relaxed, tanned and speak French fluently.

Case Study: Limited Company

AA Ltd is a company producing very high quality architectural stonemasonry , whose business had reached a plateau so the Directors were  looking for ways to grow .
One of our consultants was engaged to advise and help move the business on to the next stage. Three major areas were identified and targeted.

1- Lack of operational and financial controls.

A comprehensive order tracking system was installed, along with a system to record time spent and materials used on each job. The final costs were then automatically compared with the original quotation once the job was completed.  At the same time, low cost, but modern and efficient “lean” production techniques were introduced.
Invoices, historically, had been sent out on a haphazard, as and when basis, usually around a month after the work had been completed, causing unnecessary cash-flow problems. With the new system all invoices were sent out immediately on completion and deposits were introduced and taken with orders. On large jobs, interim payments were also requested.
References/credit checks were also introduced for all “Trade” customers and an automated payment terminal installed to take payment from “Retail” customers upon collection.
Cash-flow improved, paper work reduced, efficiency improved.

2 - The Company was over-dependent upon too few customers

In order to address the lack of clients, a website was built as a  priority, including a photographic portfolio of past and current work. This brought in more enquiries.
A comprehensive and inexpensive marketing campaign was also set up, target clients identified and contacted by phone or mail-shots.

3 - Having acquired the customer and established a relationship with them, the Company was not taking full advantage of that relationship with large budget clients.

A company’s sales ledger can sometimes be its greatest asset. Obviously having satisfied clients provide a unique opportunity for repeat business.
Fitting teams were also introduced and added yet another income stream.

Testimonial: Malcolm, Torquay, Devon

Many thanks for your calm, good humoured help sorting out my business problems. I wish I had met you years ago, as your guidance, knowledge and experience would have made me more efficient and potentially saved me many, many thosands of pounds.

Testimonial: Roger, Plymouth, Devon

Phoenix & Co were on the ball immediately, managing the plans we had discussed and approved.six months later a personal disaster and a business failure were history and my new company was trading successfully.my family is once again re-united and happy, especially enjoying the new security.a second chance I never thought possible.thank you so much.

Testimonial: Tony, Exeter, Devon

Within 2 weeks Phoenix & Co had negotiated the contract and agreed settlement. Both parties were happy with the solution.very professional thank you.

Testimonial: Rose, Taunton, Somerset

The moment Phoenix & Co became involved a great weight was lifted from my shoulders. They knew what to do and always had time to explain, in detail, what was happening.I began to believe a solution was possible, to the quite horrendous debts we faced, both personally and professionally. Now looking back I can hardly believe the process has ended and my husband and I can once again see light at the end of the tunnel.