If you’re unwell, you go to the doctor early—because the sooner a problem is diagnosed, the better the chances of recovery. Running a business is no different.
Too often, business owners ignore early signs of distress, hoping things will turn around on their own. But in our experience, sustainable business success is based on planning and action—not hope.
The Value of a Business Plan
A solid business plan helps you:
- Set clear and achievable goals
- Understand your cash flow, profit margins, and break-even points
- Regularly monitor performance and adjust your strategy when needed
Many plans are created purely to satisfy lenders—then left to gather dust. But a good plan is a living tool, revisited often and adapted to changing conditions.
What Every SME Plan Should Cover
For small to medium enterprises, we recommend focusing on:
- Cost structure – Are you accounting for all costs?
- Sales targets and pricing – Are your prices realistic and competitive?
- Cash flow forecasting – Do you know when cash is coming in and going out?
- Scenario planning – What if a key person leaves or trading conditions change?
Regularly reviewing these elements can reveal risks and opportunities early.
Real-World Examples
Example 1: Sales Growth with No Cash in the Bank
A business owner came to us worried that, despite strong sales growth, they were constantly low on cash. They feared a voluntary administration might be around the corner.
A closer look revealed a cash flow mismatch: they paid for imported parts upfront, well before any revenue came in. While profitable on paper, they were always cash poor.
We introduced trade debtor finance, which allowed them to unlock funds tied up in receivables. This shift provided the liquidity they needed to fulfil growing orders and pay suppliers on time—averting insolvency entirely. Had the issue been ignored, they likely would’ve defaulted on key obligations like tax, superannuation, or supplier payments, putting the business at serious risk.
Example 2: Investing in a Business That Couldn’t Break Even
Another business owner—charismatic and skilled at making sales—was considering investing $100,000 into their struggling retail operation. Before doing so, they asked us to assess whether the investment would make a difference.
After reviewing their financials, we uncovered a harsh reality: based on current pricing and overheads, sales would need to increase by 170% just to break even. The owner recognised that level of growth wasn’t realistic and made the difficult but informed decision to wind down via voluntary liquidation.
Had they planned earlier and monitored performance properly, they may have avoided not only this investment decision but also earlier losses.
The Takeaway
Even the best business owners can’t do it all. What sets successful operators apart is their willingness to plan, monitor, and seek advice early.
If your business isn’t performing the way you’d hoped—or if you’d simply like a health check—we’re here to help.
Reach out for a free, confidential chat with a trusted insolvency professional by calling +61 2 9251 5222.