SEO Consultancy (Insolvency Case Study)
The company was led by two directors with expertise in Search Engine Optimisation (SEO), with services to provide advertorial content across a network of regional and national publishers.
SEO relates to improving the quality and visibility of a website so that it gains a higher ranking on search engines and there is an increase in the number of visitors and thereby customers. SEO impacts on varying types of search, whether for images, local stories, videos, academic work, news and industry specific information – the company focused primarily on Google for its work.
It was not felt necessary to have office premises and instead, one of the director’s homes was used for trading, which reduced business costs. Meanwhile, because the two directors were skilled in their work, the firm soon earned a reputation for providing great service with work coming through recommendation.
As business grew, a sales executive was taken on to further expand the business and it was decided to move to offices in Ruislip, Middlesex. Over time, further recruits were made and there was healthy turnover and enviable customer base.
But, the business then hit a wall when Google changed its algorithm with the result of preventing the use of advertorial content as a means to boost SEO.
To compound matters, Google also began to penalise websites that failed to comply with new SEO regulations. Because of this, many of the publications’ websites that were serviced by the consultancy now ad a zero ranking. In a short time, the company’s turnover dropped by 95%, which quickly led to trading difficulties.
In an emergency measure to improve cashflow, the business made all staff redundant and the business moved back to the director’s home address. A director also introduced private funds to ensure the firm could remain viable.
However, client confidence was damaged and work almost dried up, resulting in no revenue – the business was forced to cease trading.
As it was not possible to pay outstanding bills and invoices for suppliers, Company Debt was asked to provide guidance and we saw no other option than to recommend a creditors’ voluntary liquidation.