Business rescue and stabilisation
When a business is in active distress, the first priority is the same regardless of what caused it: stop the slide. Everything else comes after.
Distress looks similar from inside no matter the root cause. Cash is tight. Creditors are pressing. Decisions are being deferred because there's no capacity to act on them. The leadership team is managing reactively, one incoming problem at a time. The business is losing altitude and everyone can sense it, even if nobody is saying it directly.
The intervention at this stage is not strategic planning. It's triage. Getting a clear picture of cash. Understanding which creditors are most likely to force the issue and communicating with them before they do. Identifying what the business can genuinely deliver in the near term and cutting commitments it can't. Making sure the people who are critical to operations know where things stand and why they should stay.
This work sits alongside the existing leadership — not replacing it, but providing the independent perspective and the specific experience of distress situations that most management teams don't have and don't need to have.
Diagnosing the real problem
Before a recovery plan is worth anything, the diagnosis has to be honest. The question that matters most early in a distressed situation is whether the problem is structural or operational. A business with a sound model but a cash-flow timing problem needs a different response to a business whose revenue is declining because the market has moved or the cost structure is wrong.
These two situations look identical from inside. Both produce the same symptoms. But treating a structural problem as a cash-flow problem — which is what most founders do, because it's the more comfortable diagnosis — just delays the reckoning while the options narrow.
The diagnostic work involves separating what the leadership team believes is happening from what the data shows. The explanation the team reaches for first is usually not the root cause — it's the most recent visible symptom. The real problem tends to be two or three layers down. An outside perspective is useful here not because the advisor knows more about the business, but because they're not invested in any particular explanation being true.
Formal business rescue under Chapter 6
In South Africa, the formal legal mechanism for a distressed company is Chapter 6 of the Companies Act 71 of 2008. Business rescue proceedings allow a financially distressed company to restructure under the supervision of a business rescue practitioner, with a moratorium on legal proceedings while the rescue plan is developed and implemented.
Formal rescue proceedings are not the right response to every distressed situation. They carry real costs — practitioner fees, legal and accounting support, and the reputational implications of a public filing — and they are only appropriate where there is a genuine reasonable prospect of rescuing the company or achieving a better outcome for creditors than immediate liquidation would produce.
Many situations that look like they require formal rescue are better handled through direct engagement with creditors, operational restructuring, and additional capital — without the formal legal process. The work here includes helping the leadership team understand what their realistic options are, which path is appropriate to their situation, and what each path will require.
If formal rescue proceedings are appropriate, the role here is to support the board and the founder through that process — preparing the board resolution, selecting and working with a business rescue practitioner, and ensuring the leadership team retains meaningful involvement in shaping the outcome. This is not a business rescue practice. It is the support that sits alongside the founder to make sure they don't navigate it alone.