The companies that come through a crisis usually have four things in common: they saw the signals earlier, brought in outside perspective earlier, acted on what they found, and still had room to manoeuvre financially when the decisions had to be made. It's rarely about luck, industry or size. It's usually about time and openness. The Danish Early Warning programme, which has helped over 10,000 SMEs in distress since 2007, shows that companies that reach out early often have a substantially higher chance of surviving, while those that reach out later often face a controlled wind-down or insolvency.
The four factors that often separate them
If you read insolvency cases and businesses that recovered — which most advisors end up doing — the same pattern shows up again and again. It isn't complicated. It's just hard to do in practice.
The four factors that often decide whether a business comes through a crisis:
- Time between signal and action. The most important factor. Companies that respond within a few months of the first clear signals have far more options than those that wait 12 to 18 months.
- Outside perspective. Owner-CEOs who have one or more outsiders to talk to — a board chair, a former CFO, an industry advisor, a turnaround volunteer — usually make faster and better decisions than those who deal with it alone.
- Liquidity when the decision has to be made. When lenders and suppliers still believe the company has options, you negotiate from a stronger position. When liquidity is down to a few weeks of operations, you take the deal you're offered.
- Willingness to change something noticeable. The companies that survive rarely settle for small adjustments. They cut costs, drop customers, retire products, and say difficult things out loud to the organisation. The small adjustments come later — the big things get done first.
Early action is often the most important factor
The Danish Early Warning programme is funded by the Danish Business Authority and staffed by around 112 volunteer advisors — usually experienced owner-CEOs, CFOs and lawyers who do it pro bono. In 2023 they helped 1,271 owners, up from 859 the year before. The programme has been running since 2007 and is regularly cited as a reference internationally.
The numbers from the programme are consistent: owner-CEOs who reach out early — typically when the first signs are there, but before creditors start applying pressure — have, by the programme's own estimate, around a 75 percent chance of surviving. Owner-CEOs who reach out late often end up in a controlled wind-down, where the task becomes shutting the business down with the least possible damage, rather than saving it. One in seven Danish bankruptcies of active businesses is handled with Early Warning support.
That doesn't mean reaching out late always leads to insolvency. It means reaching out late changes the task. Early on, the business can often still be saved. Late, it's often about limiting the damage.
Why outside perspective makes such a difference
Owner-CEOs often have few people they can talk to honestly. The family has to be shielded from worry. The employees have to be shielded from uncertainty. The lender shouldn't hear about it until it's fully thought through. The result is that the owner-CEO ends up having the hardest discussions alone.
That's where the outsider makes the difference. A former CFO or an experienced board chair often sees the problems earlier than the internal management does. They own no shares and draw no salary, and have no reason to agree. That's often why they matter.
It doesn't have to be formal. Many owner-CEOs have one person they call — an old colleague, a customer who has now retired, a lawyer from a previous case. It isn't a board. It is often more important than a board.
Example — two companies, same crisis
Two mid-sized manufacturers, both around 50 employees, both hit by the same energy and raw-material price shock in 2023 to 2024.
The first owner-CEO sees the problem in Q1, talks to his former board chair in Q2, contacts a turnaround advisor in Q3, and lets go of two of his five largest customers before Q4. He cuts 7 roles, raises prices with the three remaining customers, and renegotiates with the lender before margins fall to a critical level. He still has a company 18 months later. Not at the same size, but solvent and with a plan.
The second owner-CEO sees the same signs at the same time. He finds an explanation each time. He doesn't talk to anyone outside, because "we've seen worse". By Q4 the company has only a few weeks of liquidity left. He reaches out to a turnaround advisor, but the task has changed: three months of controlled wind-down, selling assets, and making sure payroll can be paid one last time. That doesn't necessarily mean the business was a bad one — it's a business that reacted 9 months too late.
The difference between the two wasn't strategy, industry or market. It was time and openness.
What the companies that don't survive often have in common
Three patterns recur in the cases where the company doesn't come back:
- They've used the same explanation across several quarters. "It'll correct after Christmas." "It'll correct after the summer." "We'll win them back." When the explanation stays the same but the date keeps moving, it isn't an explanation any more.
- They haven't worked through the worst-case scenario. The budget only exists in one version — the optimistic one. There is no plan for what the owner-CEO does if revenue drops another 15 percent.
- They have no outsider to talk to. Or they have a board that mostly confirms the strategy rather than challenging it. When the problem finally lands on the table, the board is often just as surprised as the owner-CEO.
5 things an owner-CEO can do now
- Write down your own track record. Which difficult decisions have you delayed in the last 12 months? How many are still unresolved? It says more about the situation right now than most reports do.
- Find one person who's allowed to challenge you. Not necessarily in a formal role. Just one person you can talk to honestly, and who doesn't need to be shielded from worry.
- Work through the worst-case scenario. If revenue falls 15 percent over 12 months, what do you do? If two of your five largest customers disappear, what do you do? Write it down before you're in it.
- Look at how many months of operations your liquidity really covers. How many months do you have if revenue stays flat? Under 4 months is when lenders and suppliers start negotiating harder. Under 2 months, you negotiate under pressure.
- Talk to a turnaround advisor early. The most expensive mistake owner-CEOs make is waiting because "it's not that bad yet". The first conversation costs nothing and can change the kind of decision you're facing six months from now.
The honest test
Three questions you can answer while sitting with your quarterly report:
- How many months of operations does your liquidity cover right now if revenue stays flat?
- When did you last sit with an outsider and talk honestly about the weak points in the business — without having to sell or defend anything?
- What's the difficult decision you've delayed for more than a quarter, and what's making it hard to take?
The most important thing isn't the answers. It's how long you take to answer them. Owner-CEOs who come through crises can answer all three within a few minutes. That's often where the outcomes start to separate.