Two highly profitable companies – burdened by debt and high levels of tax
The founder of every new company dreams of success and a healthy rate of growth — but growth can be a double-edged sword. XML Limited learned that lesson the hard way. The company started off on a shoestring but didn’t stay small for long. The business flourished, and XML Limited quickly became substantial enough to split into two separate companies. Unfortunately, XML became a victim of its own success when this rapid expansion created a set of unforeseen problems.
XML relied on bank loans to support the growth of the companies. As the businesses grew larger, so did the amount of the loans. This increasing debt burden, intended to finance growth, ultimately had the opposite effect, stifling the ability of the companies to expand. Meanwhile, XML’s tax payments constantly increased, which also acted as a drag against growth.
The first thing that XML management thought to do was to consult their own accountant, but the accountant was unable to solve the problems. The managers knew they needed help from a new source and tried calling in several tax advisers, but the tax savings the advisers promised were small, and the fees they wanted to charge were high.
Then XML’s chief executive was introduced to Ray Best, the managing director of Pareto Lawrence, who proposed a different kind of solution. The relationship clicked. Pareto advisors worked closely with XML. After analysing XML’s business in-depth, we came up with a set up of plans to address their specific needs.
In addition to addressing the problems XML was already aware of, we also suggested new business strategies they had never even thought of before. For example, we showed them how they could turn their pension into a planning tool that would benefit both the growth of the company and the owners’ personal wealth creation.
After careful consideration, XML decided to give our plans a try. The results, they told us, surpassed their expectations. Not only was XML able to save a substantial amount on its taxes and reduce its debt significantly, but after working with Pareto for 3.5 years, XML’s business valuation tripled. “Pareto are on the ball and I would recommend them to any business owner interested in growing his business”, XML’s chief executive said.
If you also have a successful company that is dealing with roadblocks, why not contact us for a free, no-obligation meeting on 01189 347 920 to see if we can work with you to clear the path for new, explosive growth.
“In 3.5 years planning our business valuation has tripled.The planning by Pareto allowed us to make tax savings and clear our business overdraft. Pareto are on the ball and I would recommend them to any business owner interested in growing his business.”