What to Fix If You’re Trying to Turn Around a Company

When people search for how to turn around a company, they are usually thinking about survival. Cash flow, cutting costs, maybe fixing operations. But if that business is anywhere near a sale, refinance, or outside investment, the question shifts in a meaningful way. It becomes less about survival and more about scrutiny.

Would this business actually hold up if someone took a hard look at it?

Because most deals do not fall apart because there is no interest. They fall apart during diligence, when buyers, lenders, or investors start asking deeper questions and expect clear answers. What shows up in that process is rarely surprising. It is usually a set of issues that have been present inside the business for some time, just not fully addressed.

If you are trying to stabilize a company or prepare it for a transaction, these are the areas that matter most.

Do the numbers fully hold together?

This is almost always the first problem to surface. At a high level, the business may look fine. Revenue is growing, margins seem reasonable. But when someone starts digging into the details, things stop lining up. Adjustments are unclear. Reporting is inconsistent. There is no clean bridge between what is being presented and what actually happened.

Once that happens, confidence drops quickly.

Turning a company around starts with making the financials reliable. Not just improving performance, but making sure the numbers can be explained, defended, and trusted. That means consistent monthly reporting, clear assumptions, and alignment between financials and operations.

If the numbers are not credible, the rest of the conversation does not go very far.

What drives performance?

Many businesses operate without a clear understanding of what actually moves the business forward. They can report revenue and expenses, but when asked what drives growth, margin, or customer behavior, the answers are not well defined. During diligence, this becomes a problem. Buyers and lenders are trying to understand not just what happened, but why it happened and whether it will continue.

Without that clarity, everything feels uncertain.

A real turnaround involves identifying a small number of core drivers and being able to explain them simply. What affects revenue, what affects margin, and what affects retention. It does not need to be overly complex, but it does need to be clear.

Is the business consistent in how it operates?

If not, it show up as unpredictability. Projects get delivered, but not always the same way. Costs fluctuate without a clear reason. The team spends more time reacting than following a defined process. From the inside, this can feel manageable. From the outside, it looks unstable.

Buyers and lenders are not looking for perfection, but they are looking for consistency. They want to know that the business can produce similar results without constant intervention. Stabilizing operations is a core part of turning around a company. That often means documenting processes and workflows, tightening execution, and reducing reliance on ad hoc decision making.

Is revenue too concentrated?

It is very common to see a business where a large percentage of revenue comes from a small number of customers. Sometimes that concentration developed naturally over time. Sometimes it was intentional. Either way, it introduces risk.

During diligence, that risk becomes a focal point. What happens if one of those customers leaves? How secure are those relationships? Are there contracts in place? You may not be able to fully diversify revenue before a transaction, but you do need to understand the exposure and communicate it clearly. Strengthening agreements, improving retention, and demonstrating stability all help reduce perceived risk.

Ignoring concentration is what creates problems.

Does the business rely too heavily on the owner?

In many founder-led companies, the owner is central to everything. Key decisions, customer relationships, and internal operations all run through them.

Internally, this can feel efficient. Externally, it creates concern.

A buyer or lender is trying to understand whether the business can function without that level of dependence. If it cannot, the risk increases significantly. Part of turning around a company is creating enough structure so that the business can operate independently. That may involve building a second layer of leadership, delegating responsibility, and clarifying how decisions are made.

The goal is not to remove the founder, but to reduce the dependency.

Does the business have a clear market position?

Sometimes the underlying business is solid, but the way it is presented is unclear. There is no strong articulation of who the company serves, why customers choose it, or how it competes in the market. Messaging may be inconsistent or overly broad.

During diligence, this becomes an issue because buyers are trying to understand what they are actually acquiring. Without a clear position, it is difficult to justify growth assumptions or valuation. Improving this does not require reinventing the business. It requires clarifying what is already working and expressing it in a way that is easy to understand.

A strong, coherent narrative supports both valuation and confidence.

Does the story match the data?

This is where many deals quietly lose momentum. The business may be presented with a strong growth story or future opportunity. But when the data is reviewed, it does not fully support that narrative. In most cases, this is not intentional. It comes from optimism or assumptions that have not been tested.

During diligence, that gap becomes visible. Once it does, trust starts to erode.

Fixing this requires aligning the story with what is actually happening in the business. That means removing unsupported claims and focusing on what can be demonstrated. Consistency between narrative and data builds credibility, and credibility is what allows deals to move forward.

What does this really means for a turnaround?

None of these issues are unusual. They show up in many businesses, especially those that have grown quickly or are led by founders.

Diligence does not create these problems. It reveals them.

That is why turning around a company, in the context of a transaction or financing, is not just about improving performance. It is about making the business understandable, stable, and transferable. Those are the qualities that buyers, lenders, and investors are actually evaluating.

A more useful question to ask...

If you are working on a business that may eventually be sold, refinanced, or partnered, a better question is not simply how to improve it.

Would this business stand up to a detailed review today?

If the answer is not yet, that is not a failure. It is simply an indication of where to focus. The businesses that achieve strong outcomes are not the ones without issues. They are the ones that identify and resolve the issues that matter before someone else uncovers them.

360 Veritas can help.