Isango8 - providing project management and accounting support for SMEs in the South and South West

Business recovery through liquidation

It may seem counter intuitive, but one of the best ways to ensure recovery of a distressed business is to go through a quick liquidation process.

Whilst winding up a limited company means the end of the legal entity that is the company this is no reason to think that the actual business of the firm needs to stop. In fact it is a more common occurrence than people think for a business to close but for the trading style, brand and assets of the firm to continue.

If we imagine a very healthy company that has been saddled with historical debts but has a profitable trading business, it makes sense that the ‘good’ business is separated from the ‘bad’ allowing the new company to flourish and provide jobs in the future. Eliminating a firm simply due to some bad decisions that may have been taken years before or by people no longer with the firm seems irrational.

This makes sense when viewed from the point of view of the employees of course as they are able to continue in their jobs but with the knowledge that they have the security of a healthy and flourishing business behind them.

It is often the case that a business may be essentially profitable at an operational level but may be saddled with very high interest payments on legacy debt, may be tied in to a very large contract that has ceased to be profitable or to a lease on premises that are costly and no longer meet its needs. In these cases the day to day profitability will be eroded by the legacy issues and the firm may find itself facing Administration.

By taking quick action the directors could ensure that the legal entity that is the company is wound up in a structured and professional way by a licenced insolvency practitioner, and a new ‘phoenix’ company (newco) is formed which buys the assets and the good business from the old.

The old company retains those aspects of the bad business and is liquidated with any remaining cash and of course the proceeds of the sale to the ‘newco’. Using this structured and managed way to close a limited company ensures that maximum value is retained for the creditors.

Again it may seem that this presents a rather unattractive proposition for creditors however the alternative is even less palatable. Let’s imagine the same company carrying on as long as it can. Before long the interest or lease payments take their toll and the firms’ bills start to take longer and longer to pay. Eventually the directors lose the battle and the company is faced with insolvency but any reasonable chance of saving the trading company is lost along with any remaining value for the now larger list of creditors. The employees also suffer as the firm then closes down with loss of jobs as a result.

A managed liquidation of a company is also better for the directors. Opting for a quick liquidation is cheaper than waiting until it is forced upon them by bankruptcy. The chances of accusations of wrongful trading through insolvency are reduced and the directors can then be free to get on with managing the newco secure in the knowledge that they have done their legal duty .

Restructuring a limited company in this way ensures that the brand and trading styles of a business can be retained. It means that the firm is still able to serve its customers and given that it should now be a profitable and cash positive company may well mean that it is able to expand and grow. All of which means that a restructured firm that was to all intents and purposes failing now becomes a valuable asset to society providing jobs and of course taxation income for the economy.

Liquidation isn’t right for every company and there are other ways the firms can restructure. There are also clearly costs and legal implications so we’d always advocate that specialist advice is taken from a licenced Insolvency Practitioner before making any decisions. However liquidation in the right circumstances can prove to be good for the directors, employees, creditors and customers of an insolvent company.

 

Isango8 - providing project management and accounting support for SMEs in the South and South West

What buying behaviour is and why you need to know

We all want people to buy what we are selling right?

But I’m a firm believer that we can’t make people buy they have to choose  to buy.

If we understand how people choose to buy then we can put in place all the information they need to make a positive choice. Buying behaviour is all about the steps people go through when they are making that choice.

Think about the last thing you bought. How did you decide who to use or what product to buy?

Oddly, although we’re all different, research has shown that humans make buying decisions in the same way. We may take longer or shorter time, gather more or less information but we still go through the process.

There are 5 steps in this process and the great news for businesses is that understanding these steps allows them to make it easier for the consumer to choose their product or service.

These are the steps that people go through when they are thinking about buying something;

  1. Recognition – people realise there’s a need either on their own or they get prompted.
  2. Search – when they realise there’s a need our prospective buyer will do an information search. They’ll probably do an internal search ( memories of good/bad experiences, recommendations that friends have made, ads they’ve seen) or they’ll do an external search by checking Google or asking around. They’ll look at all the features of something they want to buy and maybe subconsciously will rank them in order of importance.
  3. Matching – they’ll make up a short list of possible buys and then match them against the ranking that they made up in the previous stage.
  4. Choice – They’ll form a short list and then make a choice based on the results of their matching process
  5. Purchase – they actually go through the process of buying

However there’s something important that businesses need to know. A buyer can choose to either re-start or leave the process at any time. So if your prospect gets all the way through to stage 5 and your purchase process isn’t smooth and intuitive then they can easily drop out and go and find another supplier. Similarly if no product gets through the matching process they may go back and do another more detailed information search.

Stage

What buyers do

What you need to do

Examples

Recognition

Realise there’s a problem – decide whether to do anything about it

Prompt people to realise there’s a problem or create a need

Insurance, car cam belts, gas boiler servicing

Search

Look for information on solutions both internally (memories) and externally, develop assessment criteria

Make sure you are around and that they can find information, make sure that you are memorable so that you are stored internally

Google, tourist information,key fobs, Meerkats, loyalty schemes

Matching

Assess features and benefits of each against their criteria developed in stage 2

Ensure your benefits are clear and that you compare favourably. Factfind. Give incentives or bespoke

Mobile websites, comparison sites, comparison charts

Choice

Decides which (whether) the product sufficiently matches the criteria

Spell out how your product meets the need, answer request for further information, bespoke your service

Statement of benefits, Car websites

Purchase

Goes through with the purchase then evaluates their experience and stores it in memory for next time

Make sure it’s easy to buy

Repeat orders, shopping lists

The process is longer or shorter depending upon how important the purchase is. The more important a decision, the more consequences or the more expensive then the more information the buyer will seek. Would you look to do a structural survey on a shed? Probably not. The consequences of getting it wrong won’t be as disastrous as choosing which house to buy and it doesn’t cost as much money so consumers won’t look for as much information and won’t view as many alternatives.

As an aide i’ve included some questions below, see if it gives you any inspiration for marketing your business or product

Stage

Questions

Recognition

  • At what point do your customers realise their need?

  • Is location important (A kebab shop outside a pub)?

  • Is timing important (Buying a cycle helmet with a new bike)?

  • Can you induce need (Telling customers that they need to get their boiler serviced)?

Search

  • How would a customer find out about you?

  • Are you memorable?

  • Would they recommend you?

  • Are there any places that people always look for your service?

  • Are there any times that they look for information?

Matching

  • How do you show your customer that you match their criteria?

  • What methods are available to help the ‘ticking off’ process

  • Is the customer able to bespoke your service?

Choice

  • Are you able to spur a customer into choice?

  • How do you avoid your customer going round again?

Purchase

  • Do you make it easy to buy?

  • Are there any blockers to buying?

  • If there are can you remove them or make them easier?

  • Is it easy to repeat buy?

These are the steps for a personal purchase and we’ll usually make them in isolation but often the business buying decision can be the same or similar. It may have more formal steps, it may be longer but it’ll still contain the same basic methods although it may well include more people in the decision making process.

If you tailor your service or product to the way that people buy you should have happier customers. Happy customers will come back (because of their information search) and you’ll have a busy business. Everyone’s a winner!

 

Isango8 - providing project management and accounting support for SMEs in the South and South West

Windows 8 – my favourite workarounds

Right let’s be honest Windows 8 isn’t the best. (I’m trying to be diplomatic)

When it first appeared I absolutely hated it. This was a fine example of a company taking it’s user’s thoughts on board and launching them straight into the bin. I’ve started to get used to it and some of the features I love (but only some). I find it difficult to understand why a company will take probably the best known user interface and stamp on it with a big fat muddy boot (rant over).

To be fair W8 works fine when you have a touch screen but if you are a desk based person then it’s rubbish.

On the plus side there are a series of workarounds that can make your life less traumatic.

First off if you’ve got Windows 8 then download the update Windows 8.1. This is a sign that Microsoft knows it’s made a boo boo. For those of you that hate the fact that MS got rid of the Start button then you’ll find it returns when you download it. You can find out more about W8.1 here http://windows.microsoft.com/en-gb/windows-8/meet

Tip 1 – remember the scroll wheel. When you are on the ‘Charms’ ( I know, I know) screen then the scroll wheel is really useful for moving from one end of the icons to the other

Isango8 - providing project management and accounting support for SMEs in the South and South West

This is the hideously named ‘Charms’ screen

Tip 2 – reorganise your charms. Move the ones you want the most to be front and centre of your home screen. Simply click your mouse on them, hold and drag the icon to where you want it to be.

Tip 3 – to find the program you want then just start typing on the charms screen and W8 will bring up a list that matches like this (click on the image to see a bigger version)

Isango8 - providing project management and accounting support for SMEs in the South and South West

Search from the start menu

Tip 4 – Learn some handy shortcut keys. Here’s some of the ones I use most:

  • What to shut down? Pressing the windows key and ‘I’ at the same time brings up the stupid settings thingmy (press Esc to make it go away
  • Opened a program you didn’t want? Press the Alt key and F4 to shut it down. ( this closes the program so save your work if you need to keep something)
  • Want to move between programs? Hold down the Alt key then press tab, each time you press tab you’ll move to another open program, let it go and the one you chose will magically appear
  • Zoom in or zoom out. Hold down Ctrl and turn the mouse wheel
  • Want your desktop? Press the windows key and ‘D’ at the same time. If you’re already on the desktop then it’ll show you the start/charms screen.
  • Visit this place for more keyboard shortcuts http://windows.microsoft.com/en-gb/windows-8/keyboard-shortcuts

Tip 5 – right click on the start button – you did download W8.1 right? Well when you do you’ll get a funky new device from MS called a start button (what a great idea).  Right click on it and you’ll get a list of the most commonly used features like signing off and shutting down. Smashing.

windows button

ooh look! What a great idea from Microsoft

Tip 6 – and this is the best one. Use it. Seriously Microsoft is trying to force its way into the mobile/tablet arena and they won’t drop W8 so we’re stuck with it for a while. The best bet is to start using it, exploring the functions and getting to know the cheeky little fella. Just be comforted by the fact that everyone else hates it too.

windows

The Windows key – bet you wondered what it was right?

tab

The tab and Alt keys – now you know why they are there!

 

This post isn’t designed to make you a W8 wizard. All I want to do is take some of the pain away. There’s some great communities on the web that will be able to tell you much more than I.

To get you started there’s another really useful article on customising the whole Windows 8 experience here http://www.networkworld.com/community/blog/how-customize-windows-81-start-screen-and-keyboard-shortcut-tricks

Good luck!