Business Turnaround Guide: Warning Signs to Recovery
This guide is for CEOs and founders whose company is slipping, or who worry it might. Most turnarounds fail on timing, not strategy. The guide shows how to spot decline early, protect cash and choose a path while you still have options.
What's in the guide
- The turnaround curve: hidden decline, visible decline, crisis, stabilize and recover
- An early-warning dashboard with healthy, watch and act-now thresholds for runway, covenant headroom, DSO, vendor payments, gross margin, revenue vs. plan, customer concentration and key people
- A 10-question distress scorecard with scores for watch, act now and crisis
- The 13-week cash flow forecast, run weekly on actual receipts and payments
- Cash levers ranked by speed and impact, from a collections push and vendor payment plans to sale-leasebacks and asset sales
- The first 100 days: stabilize, diagnose, plan and execute
- Who needs to hear what: lenders, board, vendors, customers and employees, and how often
- The restructuring ladder from operational fix to new money, amend and extend, out-of-court workout, distressed sale, Chapter 11 and Chapter 7
- Rerating the multiple: an illustrative recovery from $2.5M to $5.0M EBITDA and 4× to 8×, taking value from $10M to $40M
Questions this guide answers
What are the early warning signs a business is in trouble?
The guide tracks cash runway, covenant headroom, DSO, late vendor payments, falling gross margin, revenue below plan, one customer over 25% of revenue and key people leaving. Runway under 13 weeks is an act-now signal. Two reds or three ambers means it is time to act.
What is a 13-week cash flow forecast?
A week-by-week forecast of receipts, payments and ending cash against a minimum cash level, updated with actuals and variance every week. The guide says to steer by it weekly, not monthly.
What should happen in the first 100 days of a turnaround?
Days 0 to 30 stabilize: a 13-week cash flow, one approver for cash and a call to lenders first. Days 30 to 60 diagnose profit by product and customer and assess the team. Days 60 to 90 set the plan with lender and board sign-off, then execute with weekly milestones.
What are the options before bankruptcy?
From least to most drastic: operational fix, new money or refinance, amend and extend or forbearance, an out-of-court workout, then a distressed sale. Chapter 11 and Chapter 7 come last. Every month of delay moves you further down the ladder.
How Strativ helps
Strativ works with distressed and early-stage companies on cash forecasting, operational restructuring and investor readiness. Mark Sue brings his experience as a Managing Director at RBC Capital Markets to lender and investor conversations, and Strativ also looks for non-dilutive funding such as grants and R&D tax credits that can add runway. Restructuring and insolvency decisions need qualified legal counsel.
The full guide includes the dashboard thresholds, the distress scorecard and the 13-week cash flow template. Request the full guide, or book a call to talk it through with Mark.
