The Warning Signs I See Before Owners Do

By the time someone calls me, they usually think the problem started a few weeks ago. It almost never did. It started somewhere between twelve and eighteen months earlier, and they've been quietly absorbing it ever since.

That's not a failing. The early signs don't look like a crisis. They look like a bad month.

What actually shows up first

The first thing to move is almost never the bank balance. It's the order you pay people in.

You start paying the suppliers who'll cut you off, and stretching the ones who won't. Super gets left for a quarter because nobody chases it immediately. The BAS gets lodged late, or doesn't get lodged, because lodging it makes the number real. Your own drawings stop before anyone else's wages do.

None of that shows up in a profit figure. All of it shows up in behaviour, and behaviour is what I look at first.

The second thing is time. Owners in trouble stop planning and start reacting. The week gets built around which call has to be handled today. Anything more than a fortnight out stops getting thought about, because thinking about it is unbearable.

The ones owners talk themselves out of

Every owner I've sat with had a reason for each individual sign. Taken one at a time, most of the reasons are fair.

A big debtor went slow. A job overran. A staff member left at the wrong moment. One quiet quarter. A supplier tightened terms. There was rain, or there was a delay, or the insurance took longer than it should have.

I know exactly how that reasoning works, because I did it myself in 1988 and I did a version of it again during COVID. Each explanation is true. The trap is that being true and being survivable aren't the same thing. Six true explanations stacked on top of each other is not six bad months — it's a pattern, and the pattern is the thing worth acting on.

The single most reliable sign, in my experience, is this: you've started keeping the full picture to yourself. Not from the tax office — from your accountant, your partner, your business partner. When an owner goes quiet with the people closest to the business, the numbers have usually been bad for a while.

The point where options start closing

Here's why any of this matters. Insolvency isn't a cliff you fall off. It's a corridor, and the doors close one at a time as you walk down it.

Early on, you've got real choices. Restructuring is on the table. A payment arrangement is realistic because you've still got something to arrange. Small Business Restructuring might fit. Selling on your own terms is possible. Your director position is defensible.

Further along, the doors have shut behind you. Once a director penalty notice has been issued and the clock's run, that liability is yours personally and no amount of good intent walks it back. Once a wind-up application is filed, you're on someone else's timetable. Once the unpaid super has sat long enough, it stops being a company debt in any practical sense.

Nothing about the business changed in that time. Only the number of doors still open.

If any of this sounds familiar

I'm not going to tell you the situation is fine, and I'm not going to tell you it's over — I don't know yet, and neither do you until someone looks at it properly.

What I will tell you is that the owners who come out of this best are almost never the ones with the strongest business. They're the ones who spoke up earliest, while they still had options to choose between.

I'm not a liquidator or a trustee. I work for the business owner. I'll look at where you actually are, tell you straight which doors are still open, and connect you with the right people to walk through them. If it's early, that's the best news you'll get all week. If it's late, you'll want to know today rather than in a month.

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