I suppose, in modern Britain we all go through a similar process when we are making a purchase: Some research on the internet followed by a couple of phone calls to work out who we trust and how much they will cost, a period of reflection and a decision.
And when the object of our attention is a sofa or a lap top, this usually works very well. We have bought the required product or similar before, have a pretty good idea of what we expect from it, what a bad experience would look like and how we might complain etc.
But what about buying a product or service you either don’t really understand or is plagued with uncertainty. How do we amend the path well followed?
For some that we speak too the answer is simple. Ignore the uncertainties and complications, just state what you want which is usually a Creditors Voluntary Liquidation (“CVL) and spend your energies negotiating on the price. I receive this approach quite regularly and it is rare that I end up accepting the instruction.
The Reason? Well, putting it brutally, a liquidation is not a Sofa. The initial advice I give is wholly dependent on the facts of a particular case and it must never be assumed that I will agree that the Company upon which the advice is being sought is capable of using the CVL process. In addition,
A modern day classic is the various conversations I am having regarding Bounce Back Loans in their various forms and the requirement or not to repay them. The conversation is usually angling towards my offering a Bronze level service £2,000 CVL.
There is usually silence on the other end of the phone when I point out that, for a smaller company the Bounce Back Loan would usually be mirrored by an overdrawn Directors Loan Account.
Other responses are:
And my response?
“Well they will earn more form you if they find the Loan account the day after the Liquidation starts rather than before. What you actually need is a discussion on repayment terms, i.e. what you can afford to repay and over what period. Indeed, it might even be the case that the best outcome for you is keeping the Company going and ensuring it has sufficient cash to meet the repayments over the next few years.”
Some of these guys are now my clients and we are working with them on these terms. I think it works well for both parties.
Please do not be seduced by sales techniques in what is a very complicated space. For you, it is so important to make decisions based on the reality rather than what you might wish it to be. And you should certainly question quite why two experienced individuals in the same field are providing such different responses? Which one is actually looking after your interests? The one who promises you the earth or the one that points out the problems you need to address?
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