Situl Raithatha, Partner – Springfields Advisory LLP
No CEO plans to fail. But failure rarely comes from one big mistake. It comes from a number of small ones, often ignored out of pride.
The truth is, every business that runs into trouble sends warning signs long before the crisis hits. They’re rarely hidden. Declining margins, tightening cash flow, creeping debt, restless teams. Yet again and again, leaders overlook them until options are few and decisions become desperate.
Why? It’s rarely ignorance. It’s emotion and more often than not, it’s pride.
Pride is a powerful driver in business leadership. It fuels ambition, builds resilience, and pushes organisations to excel. But it also clouds judgment. It makes leaders cling to optimism when realism is needed. It convinces us that “things will turn around” or that “this is just a blip.”
And so, the signs get ignored. Until they can’t be.
The Warning Signs Are Universal
Whether you’re a manufacturer in Manchester, a tech start-up in Toronto, or a logistics company in Texas, the red flags of financial distress are remarkably similar. Regulations may differ but the fundamentals don’t.
When the numbers, the people, or the energy of your organisation start shifting in the wrong direction, it’s time to pay attention, those changes are rarely random.
Here are the most common and most ignored warning signs that trouble is coming.
1. Cash flow feels tight, constantly
Profit doesn’t pay the bills, cash does. When your business starts relying on extended credit terms, late tax payments, or overdrafts just to get through the month, that’s not a temporary hiccup. It’s a sign your model or margins are under strain.
2. Revenue is up, but margins are down
Top-line growth feels good, but if you’re selling more and earning less per sale, that’s a flashing red light. Chasing revenue at the expense of profitability is a classic warning sign, especially in sectors where discounting becomes habitual.
3. Your biggest customer holds too much power
If one client accounts for a large share of your turnover, you’re not in control they are. Losing that contract could destabilise everything. Overreliance on a small customer base is a universal risk.
4. Decisions are slowing down
When senior leaders start delaying decisions “Let’s see how next quarter goes” that’s not prudence, it’s avoidance. In uncertain times, indecision is often more dangerous than a wrong decision.
5. Tension in the leadership team
Alignment at the top is a strong predictor of stability. When directors stop challenging each other or start avoiding difficult discussions, it’s usually because they sense problems but don’t want to confront them. That silence often says more than the numbers do.
6. Mounting creditor pressure
Late payments to suppliers or the tax authorities (HMRC, IRS, CRA) aren’t minor issues they’re distress signals. They suggest either a short-term cash squeeze or deeper weakness in the business.
7. You can feel the anxiety creeping in
If you’re waking up at 3am worrying about cash flow, funding, or morale, that’s your subconscious processing risk before your spreadsheets do. Listen to that instinct, it’s usually right.
“The warning signs of distress are universal. The only thing that differs is how long a CEO waits before acting.”
Why We Ignore The Signs
The reason CEOs overlook these red flags isn’t because they don’t understand them it’s because of what acknowledging them represents. To accept that the business might be in trouble feels like admitting personal failure. And for many high-performing leaders, that’s emotionally intolerable.
I once spoke with a CEO who had built a successful engineering business over 25 years. As margins began to slip, he told himself it was temporary, a “cycle.” By the time he reached out for help, the company was under severe pressure.
When we walked through the early numbers together, he shook his head and said quietly, “I knew. I just didn’t want to believe it.” That moment, that intersection between knowledge and denial is where pride does its damage.
But here’s the truth: facing financial stress doesn’t mean you’ve failed. Every economy, every market cycle, creates winners and losers and even the strongest businesses can find themselves on the wrong side of shifting conditions.
What determines survival isn’t pride or persistence. It’s awareness and action.
The Cost of Pride
Pride can cost more than money. It can cost your reputation, your relationships, and your legacy.
Too many leaders wait until the options have run out before seeking help by then, what could have been a manageable restructuring becomes an insolvency crisis.
Advisors see it every day: businesses that could have been saved if support had been sought just three months earlier.
It’s not the challenges that destroy businesses, it’s the delay in confronting them.
Ask yourself honestly: how much is your pride worth?
Is it worth the future of your company?
Is it worth the livelihoods of your people?
Turning Awareness Into Action
Recognising the red flags early is a strength, not a weakness. The most resilient leaders are those who surround themselves with trusted advisors, accountants, lawyers, business coaches, and turnaround specialists who tell them the truth, even when it’s uncomfortable.
When the warning signs appear:
• Face the facts early. Numbers rarely lie; emotion often does.
• Ask for independent perspective. External eyes see patterns you may have normalised.
• Prioritise cash visibility. Forecast weekly, not monthly.
• Communicate transparently. With staff, stakeholders, and lenders. Confidence grows from honesty.
Crisis management isn’t about heroics. It’s about clarity, humility, and moving quickly before problems harden. The sooner you act, the more control you keep.
The Bottom Line
No matter where you operate, London, Vancouver, or Chicago, the warning signs of distress look the same, and so does the reason they’re ignored.
Pride can be a leader’s greatest asset, but when it stops you from seeing the truth, it becomes your greatest liability.
So, what price would you put on pride?
Because in business, the answer to that question can decide whether you rebuild, or become a lesson for someone else.
Situl Raithatha, Managing Partner of Springfields Advisory LLP, a UK-based firm specialising in business turnaround and recovery. Springfields works with business owners and professional advisors across the UK, and beyond, helping businesses face challenges early and rebuild with confidence.