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Business Debt: Starting from Scratch


When businesses are faced with closure due to unpaid debts, it is easy to assume that they are doomed. Staff will lose their jobs, suppliers will lose business and clients will lose out on lucrative contracts. However, there are strategies and procedures that can be put in place to tackle extreme debt, even when it looks as though there is no realistic solution.

Certain debt management plans can be implemented in order to get a company back into the black without selling or closing a business. Professional financial advisors are experts in this field and will advise a company on which is the best option for them.

However, there will be certain circumstances where debt management plans cannot be enforced. Whether it’s because the debt is too extreme, a winding up petition has been issued or creditors simply will not agree to the terms of a plan, closure may be the only option; although this doesn’t have to mean the end of trading. Business speakers can really help with this process.  Certain processes can be undertaken by many businesses that are faced with insolvency which will see them continue trading and making a profit.

One process that can be taken is that of pre pack administration, also referred to as phoenixing. The directors of an insolvent business start a brand new company which subsequently buys the assets of the failing one. The money that would have been used to fuel the struggling business can then be used to set up the new one. All of the remaining debt that is tied up in the old one is then liquidated. This particular way of dealing with debt does not sit well with creditors, who do not have a say in the process and stand to lose out on the sale of the business if it was either delayed or reduced.

Step by Step Process

Step 1 – The new company will need to be registered for the process to begin. More often than not the directors are the same as those from the old, failed business.

Step 2 – A licensed insolvency practitioner (or similar figure) will need to be appointed to act as administrator by the directors who will then have the company’s assets valued.

Step 3 – The assets will then be sold to the new business through a sale and purchase agreement.

Step 4 – During a creditors meeting, the administrator will (usually) advise the sale of the old company and use the proceeds to be distributed amongst lenders.

As with any solution to debt, there are certain restrictions that may apply. If you are looking to guarantee company formation, you have several specific criteria that must be met before being accepted.  If directors have a history of unpaid taxes or VAT then this could lead to further problems, especially if company directors of the failing business wish to start a new one. HMRC has strict guidelines on how a director should approach a new business set up and will only allow for VAT registration if a lump sum is paid up front. This amount is often the total of unpaid VAT for the last 4-6 months from the old company.

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Small business online marketing strategies

small business online marketing Marketing for small business in the past was hard and was mostly done by word of mouth, however, with the emergence of the internet, safe haven has been provided for these businesses and now small business online marketing has taken a different turn. The internet can be described as a strong tool that boosts marketing strategies and in the current times, small businesses are increasing their annual returns through the use of the internet to gain traffic which in return betters the company brand name. When the company’s name is well known, there will be more sales. But how do you increase sales through online marketing? For small businesses, this is no longer a question but rather an answer; they have already established how they can do it. Small business online marketing can be done through various ways including corporate blogging, email marketing, search engine optimization, rss feeds, among other strategies.

Although search engine optimization has been qualified as one of the leading techniques to get your business up and running with limited or no payments on the same services, there are some few factors that you ought to consider before you even get to search engine optimization when planning on how to go about marketing for small business on the internet. The first thing that you need to do is to start a blog, blogging has not only been used by small businesses but also multi-billion companies to promote brands, to provide brand solutions in case of bad reviews by crafting better reviews about the brands as well as doing general marketing. The benefits of a blog is that it allows company and customers to interact through forums as readers go through well crafted content about your products or services where as at the same time answering to questions from readers who in this case are also concerned customers. Note that in blogs, the content you post should be high in traffic meaning that it should have many readers or people interested to write more about it. It should be on topical issue in the world markets. Bloggers tend to find content writers to write on different niches which will be able to attract readers. When you have content that will make your site act as the landing page, you are already building traffic to your site and building traffic to your site means that you are already building customer relationship.

If you build a better customer relationship, you will be able to have those customers spread the word through social networking sites like Twitter and Facebook. Note you will also need to build a fans page on those social networking sites to continue spreading the word on your products and services. What makes the small business online marketing interesting marketing platform for small business is that most of it is free, unless you have a website which is also recommended, you will find yourself paying an amount close to zero. When you start your blog, do not blog once and forget about blogging, in order to increase more traffic to your site, you will need to maintain consistency in blogging. This is because Google, which is the leading search engine tends to provide higher proficiency to blogs that are visited on routine basis and for your blog to be visited on routine basis, it must have content that is update almost on a daily basis. Once you start blogging, you are not only building traffic to your small business, but you will also start making extra cash depending on the number of people that visit your blog and click on new content.

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