The situation
In 2014, the company’s founders passed away unexpectedly. Their children were not active in the business and consequently new business leadership was brought into the company to continue to deliver the original business plan and vision of the founder. Over the next five years the company would continue to grow under its new business leadership. Turnover and profit continued to increase and the company earned a strong reputation in the industry. Due to the expertise of the new director, the business became particularly well known as a specialist provider in bespoke lighting products.
In the latter part of 2019, the sole director passed away, and once again the business had to appoint a new owner-manager who could help the business navigate this crisis to secure its future.
How we helped
Haines Watts has been involved with Reflektorlux since incorporation. Our original involvement centred on assisting the founder in setting up the business and managing its compliance needs. This included assistance with year-end accounts, corporation tax, VAT and personal taxation planning. After a short period, we were asked to get involved on a monthly basis to assist with directors with the production of monthly financial and management information.
From 2014 our team worked closely with incoming director as he found his way in his new role. Our role transitioned from accountants to a quasi-FD role. With the upheaval that the company was going through at this time, we undertook a number of advisory assignments for the business, including:
- Share restructure advice
- Regular management accounts
- Debtor control
- Cash flow forecast and projections
- Cost card / BEP / Margin analysis
- Personal tax and dealing with correspondence from HMRC enquiry
Despite the loss of the sole director in 2019 and the subsequent Coronavirus epidemic in 2019, the business successfully managed to continue to make a profit and retain all of its key customers, staff and suppliers.
As of 2020 we are currently assisting and advising the business in regards to a potential sale and the subsequent tax consequences for the shareholders, directors and the business.
Results
The involvement of Haines Watts from incorporation of the business to date, has enabled the company to establish solid foundations for the growth that would be to follow. From the outset, the founders were able to concentrate on building the necessary relationships with their customers, suppliers and staff as they had the comfort of knowing the company’s financial affairs were being dealt with and looked after by our team.
By working closely with the directors, we were able to put in place systems for obtaining reliable management information, which enabled the directors to make informed business decisions. Our involvement from the outset also meant we could provide continuity and help the business navigate its way through very difficult circumstances. The company has ultimately weathered crisis strongly and emerged with a higher turnover and as a more profitable operation.
The planning undertaken throughout the company’s nine-year history will ensure that as the business prepares for sale will leave both the director and the shareholders in a position whereby they will meet their personal wealth needs upon exit.
Contact the team in Hornchurch for more information.
