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Restructure

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Sometimes the answer is right in front of us – if it’s not working, change it. …

Sometimes the answer is right in front of us – if it’s not working, change it.

It’s an obvious statement. However, when business owners are facing difficult financial times, it can be difficult to take time out to find the right advice. Owners often leave it too late, and the consequence can be losing their business and livelihoods.

Allan will look at ways of identifying the failing parts within a business, and chat through solutions that are available.

Allan McLeod of mlm Solutions advises businesses and individuals facing financial difficulty. He has advised sole traders, partnerships, company directors, a billion dollar corporate, and generally advises business owners in the Scottish SME community.

Published in: Business, Economy & Finance
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    • 1. @TheBusJourney #SMEJourney The BusinessJourney Event No.5 7 May 2014
    • 2. @TheBusJourney #SMEJourney The Business Journey Partners
    • 3. @TheBusJourney #SMEJourney Allan McLeod
    • 4. mlm here to calm the waters mlm here to help calm the waters Restructure Solutions for businesses facing distress Allan McLeod mlm Solutions
    • 5. TITLE UK Debt “At the end of March 2014, Public sector net debt was £1,268.7 billion equivalent to 75.8% of GDP.” – Office for National Statistics July 2013
    • 6. TITLE The Scottish SME market FSB Scottish Members Survey Nov 2013 – • 47% of members borrow to ensure cashflow • 37% of those members borrowed less than £5,000 • Whilst 67% of those members borrowed more than £5,000 Scottish corporate failures remain static at around 1,400 insolvencies per year. Rise of the “Zombie” business. Definition - businesses which are burdened by heavy debts, generating just enough revenue to pay down interest but usually with no realistic hope of getting themselves into the black let alone making a profit. In summary, debt continues to be a significant challenge within our community.
    • 7. TITLE Reshape Reschedule Restructure Insolvency Tools Our approach “To provide a solutions based approach to financial distress, using the wide and varied tools within our armoury.” - mlm Solutions
    • 8. TITLE case study - Project Foil Profile Long est. Ayrshire family business started by Director’s father. T/o £200k. Strong customer profile. Issues Debt of £60k, £20k personal guarantee, no profit, director’s salary £400pm. Tight cost control. Solution Reshape the business. Focus on sales strategy. Intro to Business Coach to focus on sales. Outcome Business has now return to profitability and is reducing the debt burden. Director taking a salary. Long est business survives, employees continue, creditors will be paid in full and have continuity of future supply, trading & professional relationships continue.
    • 9. TITLE case study – Project First Profile Rural hotel operated by Partnership. Partnership consisted of 4 family members. T/o £600k. Issues The 2 local competitors had closed in recent times. Historical debt of £200k, including a demand from HMRC for £100k. Partners joint & severally liable, and all facing bankruptcy. £250k equity in hotel. Solution Reschedule the debt using Business DAS over 8 years. Outcome Creditors to be repaid 90% of debt, compared to nil if bankrupt. Equity in property protected. Hotel continues to trade profitably. All 4 partners protected from bankruptcy. Trading & professional relationships continue.
    • 10. TITLE case study – Steel Engineering Ltd Profile Manufacturer est. in 1922 specialising in large scale fabrication for the Marine & Energy sectors. T/o £10m, 100 employees. Blue chip customer base. Issues Board changes in 2012 led to change in strategic focus to renewables market. Substantial investment in equipment for renewables market, large cost overruns on key projects. This led to a rapid and severe downturn during 2013. Unsecured debt grew to £4.4m, which the Company was unable to service, creating severe creditor pressure.
    • 11. TITLE case study – Steel Engineering Ltd (cont’d) Solution Restructure the business - 1. Board level changes 2. Reduction of workforce 3. Re-focus on traditional markets 4. Reduce occupational costs 5. Return financed equipment 6. Compromise debt via CVA 7. Implementation of key KPIs Outcome Work pipeline was rebuilt and the business now at full capacity Workforce reduced to 60 employees Creditors agreed to CVA , which will return 65p in £ Compares to 2p from Administration or Liquidation Best outcome for Landlord Continuity of trading and professional relationships
    • 12. TITLEReshape Reschedule Restructure Insolvency Tools Our approach Key messages – • If it’s broke, fix it !!!! • There is a wide range of tools at our disposal. • Timing is critical, the sooner tackled, the better the result. • Use your network. It’s your greatest free resource.
    • 13. mlm here to calm the waters mlm here to help calm the waters www.mlmsolutions.co.uk Allan McLeod 07500 373715 amcleod@mlmsolutions.co.uk
    • 14. @TheBusJourney #SMEJourney Questions forAllan?
    • 15. @TheBusJourney #SMEJourney The Business Journey Partners

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