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THE DEBT ADVISOR BUSINESS CELEBRATES 15 YEARS

Published on:September 26, 2014Author:The Debt Advisor

15-Year -Anniversary

 

I recall fairly vividly the excitement of pulling together everything necessary to set up a business as an insolvency practice in 1999. Having spent 17 fantastic years at Deloitte latterly as an insolvency manager, I was ready for the next chapter.

This was one of the most exciting times of my life.  I worked into the early hours of the morning costing every item of equipment, studying statistics on the marketplace and preparing cash flows, profit forecasts and balance sheets.  I had a lot of support from Hurst Accountants who were contemplating setting up an insolvency arm. They had insisted that I pull together a five year business plan on a standalone basis.

The presentation to a senior team at Hurst gave me the confidence to consider going it alone. Not quite alone, I had the support of a colleague at Deloitte, Bala Rawal who was an IVA specialist and was going to be the other half of Budsworth Rawal & Co.

We took the business plan to the bank who thankfully had a similar client and knew the potential.  We were offered a £100,000 small firm loan plus an overdraft facility of £40,000 but had to give the bank charges on our properties.

We found serviced accommodation in Old Trafford, got the finance in place and handed in our notice. Budsworth Rawal & Co started to trade on 18 August 1999 with just two partners and one member of staff.

We had the fantastic support from Steve Lewis our bank manager at RBS,  my accountant, Julie Lucas who I met during my Deloitte days and who was a total rock, and also from my former husband who gave me endless encouragement.

Business flourished but the partnership struggled and Bala left after eight months.  The partnership was dissolved and Budsworth & Co emerged.  At the same time I also set up The Debt Advisor and The Business Debt Advisor as trading divisions and gradually recovered from the split.

The business built up a great team over the next six years. It was difficult as we could not afford to take on experienced staff. However, the strategy of investing in young people with lots of potential has served the business extremely well over the years. Many of the team who have worked with me and have since moved on, have had very successful careers and look back fondly on their time at The Debt Advisor and The Business Debt Advisor.

I have always been passionate about managing peoples’ expectations – especially when dealing with clients who are suffering with anxiety and stress and totally unmanageable debts.   The process needed to be focussed on treating the customer fairly – making sure we paid real attention to being true debt advisors.  The insolvency profession also had a pretty poor reputation for overcharging and failing to progress cases adequately. But thankfully getting the team to believe in the mission and vision worked.

Also, I have never been scared of rolling up my sleeves and getting involved with our industry – it’s paid significant dividends. This has meant getting involved in pulling together groups of fellow IP’s to tackle the issues that the industry is facing. Volunteering to help on government working parties to look at making the IVA “Fit for Purpose” and more accessible to the millions of over-indebted individuals but also less draconian and more certain.  This took place during 2005 and the outcome was a recommendation for secondary legislation to approve a Simplified IVA or SIVA.

You have to be brave when you are in business as a sole proprietor – you are personally liable and it really is your ‘bottom’ on the line.  The success of the business very much depended on pulling in the work – I spent hours with IT people developing my websites, making sure I got similar domain names registered and trade marking the brand.  Latterly, I was spending up to £20,000 per month on my Google pay per click campaign, I had set up 0800 numbers and developed a team of sales advisors who could properly advise clients on all their options.

One of the wisest investments I ever made was back in early 2002 when I was recruiting a PR agency to help improve the profile of The Debt Advisor brands.  This was a big cost for me at £1,500 per month but it was undoubtedly my best investment.  Over the next 18 months we researched the debt industry and issued endless press releases on debt-related issues – gambling, divorce, tough love, budgeting, and insolvency statistics – you name it – if it was relevant Bev Budsworth from The Debt Advisor had a view on it!

We built up a solid reputation with journalists for being a useful voice in the industry.

I  realised that I needed to research the psychological effects associated with debt so in 2006, I joined up with a psychologist. Sue (the psychologist) spent many hours talking me through ‘E plus R equals O’ theory, the use of hypnotherapy to get clients to visualise where they want to get to, addictive patterns, etc.

We decided to launch a service for clients who were suffering with the wider effects of debt – two free advice sessions with our resident psychologist.  We also launched our joint profiles to journalists and were writing regular articles for magazines including Out North West, a gay magazine, and My Money a free monthly magazine available in Tescos and Sainsbury’s.  I was even asked to appear on national consumer affairs shows such as Working Lunch and regularly comment on regional and national BBC radio shows.

For some time I had realised that to survive in this fast growing industry meant scaling up.  I had paid off my small firm loan and only occasionally needed my overdraft facility.  I had a number of approaches from larger firms to sell but a very good friend and corporate finance guru, Amin Amiri of A2E Venture Catalysts, persuaded me to hang in until I found the perfect match.

This came in March 2006 when I was approached by Compass Finance Group Plc.  They had a consumer loans division and wanted to set-up a debt advisory division.  They shared the same philosophy as I did.  They too wanted to offer a holistic approach to debt recognising that everybody’s circumstances are different and therefore we needed to offer a tailored solution.

I also liked their professional approach with much emphasis on client care and compliance.  Amin helped me negotiate a deal which gave me the opportunity to stay at the helm and oversee the growth of the business.  The due diligence followed and was relatively painless but hard work.  I do believe that my business ethics and emphasis on professionalism and compliance secured this deal. The PR has also given me the ability to truly punch above my weight and the excellent coverage that we received also significantly contributed to the successful sale of my business for £2m in June 2006 to Compass Finance.

In August 2006 we relocated to Compass’ offices in Bury.  At acquisition we had a team of 14 and turnover just short of £1M. Within 12 months we grew to a team of 43 and turnover for our division of £2.3M.  Compass Finance Group Plc was renamed as The Debt Advisor Group Plc.

However, disaster struck in July 2007. PWC were brought into the plc to carry a review for the lenders. The plc had started to suffer a decline in income and the lenders and shareholders were concerned.

I guess you don’t know how to celebrate success unless you have suffered the pain of corporate failure.  PWC attempted to find a buyer for the group as a whole but was unsuccessful and subsequently the Group was placed into administration whilst they sought a buyer for the insolvency subsidiary.

Fortunately, I was introduced by our accountants at the time, Douglass Green, to Ian McKinnon, a semi-retired successful entrepreneur who helped me buy the business back. The business relocated back to Old Trafford and myself and the management team set about rebuilding the business.

The experience of living through a pre-packaged administration sale has given me tremendous humility and understanding for directors who we advise on company insolvency.

The past seven years have seen many changes to our world of debt solutions and insolvency. The Debt Advisor team have contributed to developing a protocol for both IVAs and for debt management plans and most recently we have been preparing for full FCA authorisation. We had always believed we were exceptionally compliant but the FCA requirements in terms of providing the necessary evidence that we “treat customers fairly” has meant that we have had to build this from the bottom up.

The Debt Advisor’s management team has also seen some changes over the years.

Molly Monks joined in November 2013 and is responsible for managing the division and providing solutions to self-employed businesses and companies which include both informal and formal rescue solutions such as trader IVAs (Individual Voluntary Arrangements), Company Voluntary Arrangements (CVAs), administrations, bankruptcies and liquidations.

More recently, Alexandra Zabunyan has been appointed as debt management manager, responsible for advising clients who are best suited for the new Protocol Compliant Debt Management Plan (P-DMP) and also overseeing Financial Conduct Authority (FCA) compliance and internal procedures.

Alexandra previously spent five years with the Fairpoint Group where she was deputy team leader of the debt management team and where she developed her compliance skills.

Eileen Law-Pan has worked with me at The Debt Advisor since 2006 when she started as an insolvency administrator. Since then, she has steadily risen through the ranks and has recently been appointed as personal insolvency manager to head up the formal insolvency side of the business and manage our IVA process.

Both Alexandra and Eileen have a wealth of experience and an exceptional set of skills that will enhance the business and further increase the experience for all of our customers. They join our existing management team which includes Lucy Rynkiewicz-Jones who heads up our advisory team, Clare Etherington, business development and marketing and Dawn Rhodes, cashiering and credit control. Dawn and Lucy between them have almost 20 years of service at The Debt Advisor.

Chris Haughton, our external FD has helped keep the business and finances on track for nearly 14 of the 15 years. I am eternally grateful for Chris’s support. Whilst maintaining a close eye on the businesses finances, he is also our “man Friday” liaising with IT and contractors to ensure our systems function efficiently.  He is also a great friend to all the team.

Our team also needs a very special mention.  The success of the IVA and debt management plans that we supervise are down to their caring and determined approach. Our team have won or been shortlisted for numerous national Debt Advisor and Debt Counsellor industry awards over the years.  Many joined us with no prior experience and our commitment to training and development including the DRF Cert DR, CPPI and CPI as well as the JIE. The investment has been very worthwhile.

I have no doubt that the FCA authorisation and regulation will not be the last hurdle faced by our businesses in this industry. We have had to adapt and change over the years to reflect changes. The secret is grabbing the challenges with both hands and having a dynamic enough business and team to be able to adjust.

I am not sure I will be around for the next 15 years but I hope the business will be and will grow from strength to strength.