Seven patterns recur across insolvency cases in Danish SMEs. They are rarely hard to see. It is usually the same few patterns across industries, sizes, and business types. The hard part isn't observing them — it is letting them all count at the same time. Most owner-CEOs see two or three in isolation and find an explanation for each. It is only when they sit side by side that the pattern becomes obvious.
Pattern 1 — Declining liquidity for several quarters in a row
The most important pattern. Not a fluctuation — a trend. When liquidity measured in months of operations is falling quarter after quarter, it's rarely temporary any more — no matter what the explanation was in Q1.
In most insolvency reports, the declining liquidity trend is visible 6 to 12 months before creditors start tightening. The owner-CEO sees the number but compares it to the same quarter last year instead of looking at the trend. Last year was also hard, so it doesn't feel urgent.
Pattern 2 — Concentration on a few large customers
When the top three customers make up more than half of revenue, and that share has been rising over the last two years, the business becomes dependent on a small number of customers in a way the strategy often underestimates. The negotiation is no longer balanced.
In insolvency cases you typically see that concentration has been rising for 18 to 24 months before the first serious loss of a large customer. The loss itself is rarely the killing blow. It's the dependency that built up in the months before.
Pattern 3 — The relationship with the lender changes
The relationship manager suddenly starts asking about quarterly numbers, wants more frequent reporting, mentions loan terms more often than before. The tone isn't directly alarming — just different.
Lenders often see the patterns in their own numbers before the owner-CEO sees them in his. By the time the relationship with the lender changes, there's already an internal note. It rarely comes from the relationship manager alone. It usually means the business is already under discussion internally.
Pattern 4 — The same explanation across multiple quarters
"It'll correct after the summer." "It'll correct after Christmas." "It'll correct when the big order lands." When the explanation stays the same but the date keeps moving, it isn't an explanation any more — it's a way of postponing the problem.
In insolvency cases you often find three or four quarters in a row where the same explanation has been used for the same number missing budget. The explanation isn't necessarily wrong in isolation. The market really does often pick up after the summer. It just doesn't pick up enough.
Pattern 5 — Lost key people
Experienced employees resigning before they have another job lined up. The CFO who is "taking a break". A salesperson who has been there for 12 years and suddenly wants to try something different. Each one has a plausible explanation. The pattern is that they often see the problems earlier than management does.
When two or three key people leave the business within six months, it's rarely a coincidence. They've often already seen what signals 1 and 2 were showing, before it became obvious.
Pattern 6 — Postponed investment in the core product
It isn't the marketing budget that gets cut first — it's often development, maintenance and the quality of the core product. If competitors are moving forward while your product stands still, holding on to customers gradually gets harder — and you may not see it until a year later.
In insolvency cases you often see that investment in the actual product or service was deferred 12 to 24 months before customers started dropping off. It's the most expensive pattern, because it's hard to reverse — even if liquidity recovers, the product is behind.
Pattern 7 — A board or leadership that mostly confirms
The hardest pattern to see in the numbers, but often the one that binds all the others together. If the board mainly confirms the strategy, if leadership meetings are short and information-based, and if the difficult questions are no longer being asked — the other six patterns can continue developing for longer without resistance.
In insolvency cases you typically find that the board was caught by surprise at a point when operational employees had seen it coming for a while. It's rarely the board's fault in the traditional sense. It's the information flow that slowed down or stopped before it reached the table.
Example — how the patterns typically overlap
A typical mid-sized trading company, around 70 employees. Liquidity has been falling for 9 months (pattern 1). Two of the three largest customers, who now account for 58 percent of revenue, have started pushing for lower prices (pattern 2). The relationship manager has asked for monthly reporting since Q3 (pattern 3). At every leadership meeting for the last four quarters, the owner-CEO has explained that "things will normalise after the summer" (pattern 4). The head of sales resigned in February and the head of procurement in July (pattern 5). A planned IT upgrade to the core product has been postponed twice (pattern 6). According to the chair, the board had "no concerns" at the most recent meeting (pattern 7).
Seven patterns. Each one can be explained. Together, it's 9 to 12 months before insolvency, if no one acts.
It isn't the worst example you could find. It's a normal one. That's often why the list only makes sense when you look at the development over time.
What most owner-CEOs miss
Not the individual pattern. The overlap. Most insolvencies aren't sudden — they're delayed responses to 12 to 24 months of signals that were explained one by one.
That also means many insolvencies could have become a controlled restructuring or a planned wind-down, if the owner-CEO had reacted earlier to the patterns. It isn't the ability to set strategy that matters at that point. It's the ability to go back and place the signals next to each other.
The honest test
Three questions while you're sitting with the list:
- How many of the seven patterns can you see in your own business right now?
- For each pattern you have — how long has it been there?
- Has someone outside the business looked at the list with you, or have you only gone through it on your own?
If you have three or more patterns, and no one outside has seen the list, you aren't sitting with an abstraction. You're probably standing in the middle of a pattern other owner-CEOs recognised too late before you.