Insolvency risk tips knowledge can help you to running a business in 2025 to an easier task. Costs are rising, markets are shifting, and uncertainty is the new normal. But here’s the truth: most businesses don’t fail because of the economy; they fail because of avoidable internal mistakes.
“There are no new ways to go broke, just old mistakes repeated in modern business wrappers.”
John Morgan, Director.
Speaking to over 60 franchise professionals and accountants at the Franchise Accountants Network Conference in Sydney, Morgan emphasized that business failure is a process, not a moment and shared practical insolvency risk tips to help business owners avoid becoming a statistic.
At BCR Advisory, we’ve seen it all. Here are the most practical insolvency risk tips you need to keep your business stable and sustainable in today’s environment.
Stop Confusing Growth with Success
Overtrading scaling too fast without funding it properly is one of the top reasons businesses go under. Many business owners jump into big projects or hire rapidly without a solid cash buffer. Rapid growth might look like success, but if your funding can’t keep up, you’re at risk. Businesses often overtrade by taking on too many projects, hiring too quickly, or investing heavily without adequate working capital.
Growth eats cash and without a clear plan to finance it, operations can become strained. Sustainable expansion should always be supported by strong cash flow forecasting and funding strategies. If you’re growing without checking your numbers, you may be scaling into insolvency.
Tip: Before you grow, check if your cash flow can support it, not just your revenue projections.
Get Better at Listening to Your Numbers
Numbers don’t lie, but many business owners ignore what they’re telling them. Lack of real-time visibility, outdated reports, and gut-feel decision making can mask serious trouble. Your business health lives in your financial data. Yet many owners still rely on gut feeling or outdated reports. Without timely and accurate visibility, you could be ignoring serious warning signs. Regularly reviewing your balance sheet, cash flow, and debt exposure puts you in control.
Tip: Use tools like Xero or MYOB and review financials monthly. Don’t leave it all to your bookkeeper, own your data.
Diversify Skills at the Top
A team of all lawyers or all engineers may think alike, but that doesn’t serve your business. You need diverse thinkers who challenge each other and bring a range of experience to the table. Too many businesses rely on leadership teams made up of people who think the same way. That often leads to blind spots. A team of only lawyers, engineers, or creatives can miss crucial commercial or strategic cues. Diversity in skill set and perspective strengthens decision-making
Tip: Build a well-rounded leadership team and give financial voices (like your CFO) the room to influence decisions.
Even in franchise systems, when the insolvency risk tips are applied. We often see these triggers:
Franchise businesses can be very successful, but they’re not immune to failure. We often see common patterns among struggling franchisees: poor research before buying, unrealistic revenue expectations, and a lack of commitment to the franchise system. Others become distracted by side ventures or neglect to invest in staff training. One of the most overlooked insolvency risk tips for franchisees is understanding that franchising isn’t a shortcut to success—it demands discipline, clarity, and long-term thinking. Follow the proven model, track performance closely, and stay focused on delivering value to your local market
- Poor due diligence before purchase
- Misaligned expectations
- Skipping training or ignoring systems
- Getting distracted by other businesses
Tip: Franchising works when you work the system. Know what you’re buying and stick with it.
Listen to advice. Don’t wait for disaster.
At BCR Advisory, we help Australian businesses take early, practical steps toward financial health, before a problem becomes a crisis. The sooner you get advice, the more choices you’ll have. Whether it’s restructuring, refinancing, or simply reassessing your approach, expert support can make the difference between recovery and collapse.
At BCR Advisory, we specialize in helping Australian businesses identify issues early and work through practical solutions to avoid insolvency.
Final Thought: Business Failure is a Process, Not an Event
Insolvency rarely hits overnight. There are always signs, missed payments, creditor pressure, cashflow dips.
Change is constant and businesses that fail to evolve eventually fall behind. Whether it’s shifting customer expectations, rising interest rates, or emerging technologies, business environments today are far more dynamic than in the past. The ability to pivot, test new ideas, and modernize operations can be the difference between thriving and closing down. That doesn’t mean chasing every trend, but it does mean reviewing your offer regularly and being open to reinvention. Complacency is the enemy of survival in today’s business climate.
Despite evolving tools and models, insolvency stems from old mistakes, just in modern packaging. Whether you’re running a franchise or building a startup, the same golden rule applies: