This Glasgow based company launched in 2006 and offered a number of services, including Search Engine Optimisation (SEO), Pay Per Click (PPC), website design and hosting.
Initially there were only two directors working from home. Another director joined in 2007, bringing along a few long term clients from the advertising agency he used to work for.
During the first year of trading the reputation of the company began to grow. The company delivered for its initial clients and gained recommendations from them for further work. Over the next two years, the number of staff expanded and the company moved offices twice.
Problems arose when the company lost one of its sales team and at the same time had to change their trading terms, to comply with Google's changes. This resulted in the company losing rankings and traffic, which in turn put pressure on cashflow.
To make matters worse, Google deemed that they had broken the terms of their trading agreement and were fined. The directors then had to investigate the problem and try and get bank into top ranking with Google. It was strongly felt this was the best way to generate new leads. Through the company’s SEO skills and services, attempts were made to interpret the search engine provider’s intent and look for opportunities to benefit both the company and its clients (the company had to understand what impact these changes would have on the company's clients). The SEO team's time was taken up purely on working out this issue - the company needed a clear direction for the future for itself, and of course, the company’s clients. This work was successfully completed.
While this research into strategies and internal processes took place, the directors admit they took their eyes off the ball in terms of sales and generating new business.
Over the last couple of years, the directors have been trying to address the outstanding debt, however at the start of 2015 the company lost its biggest client. This resulted in the loss of revenue .
KSA were appointed to assist with a company voluntary arrangement (CVA) as the company was viable but needed help with cashflow and growing debt. HMRC were owed c£1.8 million, other creditors c£4k. Directors had given personal guarantees to the bank, however these weren't called in as the bank was in credit.
New processes were introduced to try and negate the bad debt that the company previously experienced and improve credit control. The work which the company had to address with regards the Google penalty has been completed with the best possible results achieved.
The CVA was approved by creditors (including HMRC) with a dividend of 89p in £1 over 5 years ,
Categories: CVA, What is a CVA or Company voluntary arrangement?