When someone tells me their business is struggling, I rarely start with sales.
That surprises some owners. The natural reaction to a struggling business is usually, “We need more revenue.”
Sometimes they do.
But I’ve seen businesses where increasing sales would actually make the problem worse.
Over the years, I’ve worked with businesses as an owner, investor, advisor, and sometimes as the person brought in when things were already going sideways. While every situation is different, I tend to start with the same areas.
1. Where Is the Cash Actually Going?
The income statement may tell me whether a company is profitable. The bank account tells me whether it can survive.
I want to understand how cash moves through the business.
How much comes in each month? How much has to go out? When does it go out? What debt is being serviced? Are customers paying on time? Are owners pulling money out of the company? Are there expenses that made sense two years ago but no longer make sense today?
I’m especially interested in expenses that have become invisible to management.
A $200 monthly subscription doesn’t seem significant. Neither does a $500 service contract. But businesses accumulate expenses. Twenty seemingly insignificant expenses can add up quickly.
Before talking about growth, I want to know the company’s true operating cost.
2. Is the Business Actually Making Money on What It Sells?
Revenue can hide a lot of problems.
A company doing $3 million a year isn’t necessarily healthier than one doing $1 million.
I want to know what happens to every additional dollar of revenue.
What does it cost to deliver the product or service? What is the gross margin? Which customers are profitable? Which products are profitable? Are certain customers consuming substantially more resources than they’re paying for?
I’ve seen businesses chase revenue from customers they'd be financially better off without.
That’s why “we need more sales” isn’t a strategy until we know what kind of sales the company needs.
3. What Does the Owner Really Do?
This is one of the most revealing questions I ask.
If the owner disappeared for 30 days, what would stop?
In many owner-operated businesses, the answer is: almost everything.
The owner sells. The owner approves purchases. The owner handles important customers. The owner resolves employee problems. The owner makes pricing decisions. The owner knows where everything is.
That isn’t necessarily a bad business.
But it is a business with a serious constraint.
You can’t meaningfully scale a company when every important decision has to pass through one person.
I start by looking for things you can document, delegate, automate, or eliminate.
The objective isn’t to remove the owner from the company. It is to make sure the company doesn’t depend on the owner for every function.
4. Is There Really a Sales Problem?
If revenue is declining, I want to know why.
There is a major difference between not having enough leads and not converting the leads you already have.
So I work backward.
How many prospects enter the pipeline? Where do they come from? How many receive a proposal? How many buy? How long does that process take? Why do prospects say no? What happens to prospects who aren’t ready today?
Sometimes the company needs marketing.
Sometimes it needs better salespeople.
Sometimes it needs better follow-up.
And sometimes the problem is the offer itself.
Spending more money on advertising before answering those questions can simply bring in more people who don’t buy.
5. Who Is Accountable for What?
As companies grow, job descriptions often become blurry.
Everyone is busy, but nobody is clearly responsible for the outcome.
I want to know who owns sales, marketing, operations, finance, customer service, and other critical business functions.
Then I want to know how performance is measured.
“We’re working on it” isn’t a measurable result.
Businesses need a small number of numbers that tell management whether things are getting better or worse.
You don’t need 50 KPIs.
You need the right ones.
6. What Can We Fix in the Next 30 Days?
I don’t start with a five-year strategic plan when a company is struggling to make payroll.
There may be a long-term strategy eventually, but first we need stability.
I look for changes that can produce measurable results quickly.
That could mean cutting unnecessary expenses, renegotiating obligations, changing pricing, collecting overdue receivables, improving sales follow-up, concentrating marketing on the best-performing channel, eliminating an unprofitable service, or restructuring someone’s responsibilities.
A few relatively small changes can sometimes dramatically change a business's trajectory.
7. Only Then Do I Look at Capital
This matters because I spend a lot of time around investors and companies seeking capital.
Money does not fix a broken business model.
It can hide one.
If a company is losing $50,000 every month because its economics don’t work, raising $500,000 may simply give it another ten months to lose money.
Before I recommend debt or equity, I want to understand exactly what the money will accomplish.
There is a big difference between capital that funds growth and capital that funds losses.
Sometimes a company genuinely needs capital.
Sometimes it needs restructuring.
And sometimes it needs both.
Knowing the difference matters.
The Question I’m Really Trying to Answer
When I look at a struggling business, I’m ultimately trying to answer one question:
Is there a good business trapped inside a bad operating structure?
Quite often, there is.
The company may have good customers, a good reputation, capable employees, and a product people actually want. The problem may be pricing, overhead, cash management, sales processes, accountability, or simply that the business grew without the infrastructure needed to support that growth.
Those problems can often be fixed.
But the order matters.
Before adding more marketing, more employees, more debt, or more investor capital, I want to understand what is actually happening inside the business.
Because growth doesn’t automatically solve problems.
Sometimes it just makes them bigger.