5 tips to avoid bankruptcy in business
As the recession deepens and the end of the furlough scheme
looms, Ann Summers becomes the latest retailer to threaten landlords with CVA unless
shop rents are renegotiated
looms, Ann Summers becomes the latest retailer to threaten landlords with CVA unless
shop rents are renegotiated
Some landlords are “burying their heads in the sand”, says
Ann Summers boss Jaqueline Gold.
Ann Summers boss Jaqueline Gold.
Ann Summers is a hugely successful lingerie and sex toy
chain, which has brought the industry from the backstreets into mainstream
retailing in the high street. They famously selling millions of pounds worth of
products through ‘party plan’ selling in customers houses.
chain, which has brought the industry from the backstreets into mainstream
retailing in the high street. They famously selling millions of pounds worth of
products through ‘party plan’ selling in customers houses.
Gold warned that unless landlords come to the table, they
would ask to restructure its rent costs through a Company Voluntary Arrangement
(CVA), which would wipe out much of its debt and liabilities such as lease
agreements.
would ask to restructure its rent costs through a Company Voluntary Arrangement
(CVA), which would wipe out much of its debt and liabilities such as lease
agreements.
A CVA is a legally enforceable rescue deal that enables limited
companies to close unprofitable parts of the business, such as low performing stores,
reduce their rent on others without going into bankruptcy or liquidation which
would wind up the business.
companies to close unprofitable parts of the business, such as low performing stores,
reduce their rent on others without going into bankruptcy or liquidation which
would wind up the business.
Jacqueline Gold said landlords needed to recognise things
had changed.
had changed.
"Ultimately no retailer can afford to run stores
unprofitably, and with business rates set to return next spring, the challenge
of property costs is going to become even more pressing than ever," she
said.
unprofitably, and with business rates set to return next spring, the challenge
of property costs is going to become even more pressing than ever," she
said.
Source: BBC
In my experience, commercial landlords can be ruthless
especially to smaller tenants with no clout. I have seen many small business
owners made bankrupt by landlords over unpaid rent on a binding lease agreement.
especially to smaller tenants with no clout. I have seen many small business
owners made bankrupt by landlords over unpaid rent on a binding lease agreement.
5 tips to avoid bankruptcy
1.
Avoid signing long leases especially in your own
name.
Avoid signing long leases especially in your own
name.
2.
Avoid signing personal guarantees.
Avoid signing personal guarantees.
3.
Limit your personal liabilities and debts.
Limit your personal liabilities and debts.
4.
Incorporate your business
Incorporate your business
5.
Take out liability insurance
Take out liability insurance
Individuals suffer most from debts and can lose everything
including their home.
including their home.
Jaqueline Gold or Richard Branson will not lose their home
of one of their companies fails because they are not sole traders or in a
partnership.
of one of their companies fails because they are not sole traders or in a
partnership.
The above information should not be treated as personal
financial advice, and you should always take advice from your own advisers,
accountants and lawyers who know your personal circumstances.
financial advice, and you should always take advice from your own advisers,
accountants and lawyers who know your personal circumstances.
·
Tax
increases plan to pay for furlough
Tax
increases plan to pay for furlough
·
Zero
interest credit card deals returning
Zero
interest credit card deals returning
·
Will
demand for HMO rooms rise or fall?
Will
demand for HMO rooms rise or fall?
·
EU
staff offered chance to go home to work
EU
staff offered chance to go home to work
·
Capita
to shut a third of offices permanently
Capita
to shut a third of offices permanently
·
Is
this the end of office work as we know it?
Is
this the end of office work as we know it?
·
Home
workers one step closer to outsourced
Home
workers one step closer to outsourced
·
What
will happen to all the city office blocks?
What
will happen to all the city office blocks?
·
Companies
still have long leases on big offices
Companies
still have long leases on big offices
·
Why
live in expensive town centres anymore?
Why
live in expensive town centres anymore?
·
Buy-to-let landlords ignore “NO DSS” tenant
ban
Buy-to-let landlords ignore “NO DSS” tenant
ban
·
Restaurants
extend ‘eat out to help out’ scheme
Restaurants
extend ‘eat out to help out’ scheme
·
Thousands
trapped in unsellable leasehold flats
Thousands
trapped in unsellable leasehold flats
·
2m homeowners apply for mortgage payment
holiday
2m homeowners apply for mortgage payment
holiday
·
Unemployment to double 7.5% and economy slump
9.5%
Unemployment to double 7.5% and economy slump
9.5%
·
Lenders not passing on rate cuts and mortgage
rates going up!
Lenders not passing on rate cuts and mortgage
rates going up!
·
UK property prices jumped by 3% since June
following stamp duty cut
UK property prices jumped by 3% since June
following stamp duty cut
·
You can create a second income during the
lockdown…and come out stronger
You can create a second income during the
lockdown…and come out stronger
Millions of people face a bleak future post-Coronavirus
lockdown, as businesses disappear and the job furlough scheme eventually comes
to an end. However, life doesn’t have to end because of lockdown! You can join
thousands of ordinary people who have increased their income and added
streams of new income during this period.
lockdown, as businesses disappear and the job furlough scheme eventually comes
to an end. However, life doesn’t have to end because of lockdown! You can join
thousands of ordinary people who have increased their income and added
streams of new income during this period.
Are you ready to adapt to the new economic model?
As lockdown restrictions around the world are being eased,
the economic model has subtly changed forever. How will you adapt to this new
way of working and running a business, what obstacles and opportunities lies
ahead? Will you be a participant or spectator in this revolution?
the economic model has subtly changed forever. How will you adapt to this new
way of working and running a business, what obstacles and opportunities lies
ahead? Will you be a participant or spectator in this revolution?
By Charles Kelly, Wealth Mentor, Property Investor, Author
of Yes, Money Can Buy You Happiness and creator of Money Tips Podcast.
of Yes, Money Can Buy You Happiness and creator of Money Tips Podcast.
There are more examples and practical
steps to getting rich and being happy in my book, Yes, money can buy happiness, I cover the 3
R’s of Money Management, the Money B.E.L.I.E.F System and much more. Check it
out on Amazon http://bit.ly/2MoneyBook.
If you’d like further information on wealthsteps to getting rich and being happy in my book, Yes, money can buy happiness, I cover the 3
R’s of Money Management, the Money B.E.L.I.E.F System and much more. Check it
out on Amazon http://bit.ly/2MoneyBook.
mentoring and coaching, how to survive the crisis and even quit the rat race,
email me at Charles@CharlesKelly.net
or send me a message through Facebook or my Money Tips Daily community. See
more articles at www.moneytipsdaily.com
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