7 Signs Your Business Needs a Turnaround Advisor — Not More Advice
Advice and intervention are not the same thing
Advice and intervention
are not the same thing
There’s a point in the decline of a business where the problem stops
being a management challenge and becomes a survival challenge.
At that point, the usual tools — better reporting, tighter controls, a new strategy —
don’t move the needle fast enough. What’s needed is active intervention: someone
who takes over the financial management, makes the hard calls quickly,
and is experienced enough to know which levers actually work under pressure.
Recognising that you’ve crossed that line is harder than it sounds.
Business owners are optimists by nature. The same quality that
makes them good at building businesses can delay them from seeing
when the situation has changed. Here are seven signals that the
situation has changed.
1. You're paying the ATO last — not first
When a business is under cashflow pressure, the ATO is often the
first creditor to be deprioritised. The reasoning seems logical:
suppliers will stop delivering if you don’t pay them, so they get paid
first. The ATO sends letters and eventually someone will sort it out.
This is one of the most dangerous positions a business can find
itself in. PAYG withholding and superannuation guarantee
obligations sit in a special category of ATO debt that creates
personal director liability — meaning the company’s debts become
your debts. The longer this continues, the more difficult the personal
exposure becomes to unwind.
If the ATO is consistently receiving payment after your other creditors,
this is a serious warning sign.
2. Your cashflow is unpredictable week to week
All businesses experience cashflow variation. But there’s a
difference between managed variation — where you understand the
pattern and plan for it — and reactive variation, where you genuinely
don’t know each week whether you’ll be able to make payroll or pay
suppliers.
When cashflow becomes unpredictable at the operational level,
it’s often a symptom of a deeper structural problem: margins have
deteriorated to the point where there’s no buffer, working capital
is being consumed by losses, or the business has funded growth with
debt that’s now being serviced at the expense of operations.
The test: Can you, today, tell me what your bank balance will
be in 6 weeks? If the honest answer is no, that’s a problem
that needs addressing urgently — regardless of your current trading position.
3. You're having conversations with your bank you've never had before
Banks are early indicators. They see the financial position of thousands of
businesses and have sophisticated systems for identifying deterioration.
If your relationship manager has started asking questions they’ve never asked before,
requesting financial updates more frequently, or mentioning covenant compliance — listen carefully.
Banks take action quietly, quickly and with very little warning when
they decide a position is untenable. A business that has a proactive
advisor managing the bank relationship is in a significantly stronger
position than one that is reactive.
4. Key staff are leaving — and you know why
Employees often know more about the health of a business than
their employers realise. When experienced staff start leaving a
company that’s under financial pressure, it’s frequently because
they can sense the direction before it becomes visible in the numbers.
They’re protecting themselves.
The problem is circular: losing key people during a difficult period
makes recovery harder. If the turnover is unexplained, pay
attention to what the explanation actually is.
5. You've stopped taking a salary — or started taking less
This is one of the clearest signals in the financial data, and one that
business owners often don’t recognise as significant because it feels like a
sacrifice they’re making for the business. But when a business can’t support its owner’s
normal remuneration, it’s often an indicator that
the business is consuming capital rather than generating it.
Temporary reductions can be entirely appropriate during a downturn.
But if you’ve been taking a reduced or zero salary for more than two or three
months and there’s no clear path back to normal remuneration, the business
is in a different category of difficulty than it might appear.
6. Your accountant has started giving you shorter answers
This one is subtle but real. When an accountant or advisor starts
limiting their commentary, hedging their language, or declining to
give clear opinions on certain questions — it’s sometimes because they’re
aware of liability issues that arise from advising a company that may be
trading insolvent.
Under Australian law, directors of an insolvent company can be held
personally liable for debts incurred from the point of insolvency.
Advisors are aware of this and their behaviour changes accordingly.
If you’ve noticed a shift in how your advisor communicates with you, ask
the question directly.
7. You've been here before — and recovered — but this time feels different
Experienced business owners often have a strong intuition
about the difference between cyclical difficulty
and structural difficulty. If you’ve navigated downturns before, trust your
read of the situation. If this one feels different — if the problems seem more
fundamental, if the usual levers aren’t working, if you can’t see a clear path through
— that intuition is worth acting on.
Acting early is almost always better. The options available to
a business that engages a turnaround advisor at signal 2 or 3
are substantially different from the options available at signal 6 or 7.
The cost of delay is not just financial — it’s in the range of outcomes
that remain possible.
What turnaround support actually looks like
Turnaround management is not the same as insolvency
administration, though business owners often confuse the two.
Insolvency is what happens when a company can no longer pay
its debts and formal processes — voluntary administration, liquidation
— are initiated. Turnaround management is what happens before that,
to avoid it.
In practice, a turnaround engagement typically involves:
- Rapid assessment of the financial position — cashflow, debt,
creditor exposure, ATO position - Immediate stabilisation measures — prioritising payments,
managing creditor communications, stopping the cashflow bleed - Restructuring the business — reducing costs, renegotiating obligations,
potentially changing the operating model - Rebuilding — once stabilised, implementing the changes needed for
the business to trade sustainably going forward
This is hands-on work. It requires speed, experience
and the willingness to make decisions under uncertainty.
It’s fundamentally different from advisory work — and it requires
an advisor with the specific credentials and experience to navigate
the legal complexity of a distressed business environment.
Jag Olak’s ARITA certification reflects training and experience
specifically in Australian restructuring, insolvency and turnaround
work — the legal and practical framework that governs what can
and can’t be done in a distressed situation under Australian law.
If any of these seven signals apply to your business
The most useful thing you can do is have an honest
conversation with someone who can give you an objective read on where
you actually are. Not more advice on how to run the business better — a frank assessment of whether the situation calls for a different kind of engagement.
That conversation is free, confidential, and available without obligation.
JO
JO OLAK
Founder · AllevioHQ
Chartered Accountant, Executive MBA and ARITA-certified advisor with 20+ years working with Australian SMEs.
ATO Debt Management
Dealing with a situation like the ones described in this article? Jag can help.
Free assessment
Score your business across cashflow, profitability, systems and ATO exposure in under 5 minutes.
Turnaround Management — Allevi8HQ
can help.
Book a free 30-minute strategy call with Jag. No jargon, no
pressure — just an honest conversation about your situation.