In the ever-evolving landscape of entrepreneurship, small business owners navigate numerous challenges, from market fluctuations, operational hurdles and in this case ill health. Today we delve into the poignant story of one such small business owner, who’s journey encapsulates the complexities and decisions inherent when facing both business and health challenges.
In this blog post, we shine a light on the journey of a small business owner who found themselves at a crossroads, ultimately embarking on the path of a Company Voluntary Liquidation (CVL). Through this case study, we’ll explore the circumstances leading to this decision.
“Tech solutions has been trading for over 20 years, but due to ill health, John the owner of the business was unable to work for 6 months. Customers took advantage of Johns absence and stopped paying their invoices on time, this had a detrimental impact on Cash flow. Unpaid dets began to mount up and HMRC were threatening to send bailiffs to the office. It was a stressful time for John and his team. John spoke to his accountant who recommended he seek specialist advice.
We were happy to offer advice and explain the different options available to John. Whilst John’s situation was a common one, he had the additional worry about his health. He had a director’s loan that he was particularly worried about, and he saw no option other than to close the business and seek personal insolvency advice as well as business insolvency advice.
John was unsure how he could pay for the services of an Insolvency Practitioner as he did not believe the business assets to be worth anything. As part of our service, we had the assets independently valued and the sale of the assets covered the cost of the liquidation in full. Not only this, but because the company was liquidated, John and his staff were entitled to receive redundancy pay-outs that were paid by the government’s redundancy payment service. This unexpected lump sum repaid John’s directors loan in full, meaning he no longer faced personal insolvency. John even had enough left to over to invest in a new business. John is once again employing staff and contributing to the local economy.”
While the path of CVL may seem daunting, its essential to recognise it as a strategic tool for regaining control and charting a new course forward. By embracing change, learning from setback, and leveraging the support of experienced Insolvency Practitioners small business owners can emerge from adversity stronger and more resilient than ever.
