Don’t wait for trouble: How business leaders can stabilize performance and preserve value

When business performance starts to slip, it’s easy to delay action. Leaders may hope things will turn around on their own, or hesitate to bring in outside perspectives. But waiting too long can narrow your options and erode the value you’ve worked hard to build.

The reality is that many businesses face periods of strain. Whether it’s declining profitability, cashflow pressure, or lender concerns, these challenges don’t always signal failure. In fact, they often present an opportunity, a chance to reassess, refocus, and rebuild.

The key is to act early. By recognizing the signs and engaging the right expertise, both internally and externally, leaders can stabilize operations, preserve enterprise value, and maintain confidence with lenders and stakeholders.

Signs of strain: What to watch for

Business challenges rarely appear all at once. They tend to build gradually and often quietly. Here are some common early indicators that performance may be slipping:

• Declining margins or inconsistent profitability
• Slower collections and rising payables
• Missed budget targets or forecast inaccuracies
• Requests from lenders for additional reporting or covenant waivers
• Operational bottlenecks or leadership turnover
• Difficulty meeting short-term obligations without borrowing

These signs don’t necessarily mean a business is in crisis, but they do suggest it’s time to take a closer look.

Five areas to focus on

If your business is showing signs of strain, here are five practical strategies to consider. These can help improve performance, protect value, and create space to explore longer-term solutions.

1. Performance monitoring

Start with visibility. Real-time tracking of financial and operational metrics gives you a clear understanding of what’s working and what’s not. It also builds transparency and accountability across your leadership team, which is critical when navigating uncertainty.

2. Profitability analysis

Not all parts of the business contribute equally to value. A focused profitability analysis helps identify which segments, products, or services are generating returns and which are draining resources. This insight allows for targeted changes that protect enterprise value and support better outcomes for stakeholders.

3. Budgeting and forecasting

Forward-looking financial models are essential. They help evaluate the viability of any turnaround plan and provide clarity to lenders and investors. But these models need to be grounded in operational realities, not just assumptions. Aligning forecasts with actual performance builds credibility and supports informed decision-making.

4. Workflow optimization and financial close

Administrative inefficiencies can compound performance issues. Streamlining workflows and accelerating your monthly financial close improves reporting accuracy and operational control. It also strengthens lender confidence, a critical factor when exploring financing or restructuring options.

5. Cashflow optimization

Liquidity is often the first pressure point. Tightening billing cycles, managing expenses, and improving short-term cashflow can buy time and flexibility. These steps help ensure the business can meet its obligations while longer-term strategies are being assessed.

A proactive mindset and a real-world example

These strategies aren’t just for businesses in crisis. They’re practical tools for any organization looking to improve performance and protect value. The earlier you act, the more options you’ll have, and the better positioned you’ll be to make strategic decisions.

Consider the case of a mid-sized commercial printing company that was facing imminent insolvency due to sustained cashflow issues and declining profitability. Their primary lender was preparing to initiate bankruptcy proceedings. But before that happened, the leadership team brought in external advisors to assess viability and explore alternatives.

Through a focused review of operations, the team uncovered a path to generate over $2 million in annual EBITDA. Immediate cashflow controls were implemented, and stakeholders agreed to delay formal insolvency proceedings. The restructuring plan preserved more than 100 jobs and positioned the company for long-term recovery — all because action was taken early.

If you’re seeing signs of strain, take a fresh look at your business. Engage your finance and operations teams, bring in external perspectives where needed, and start building a plan. You don’t need to wait for things to get critical before taking action.