Once cash is stabilised and the forecast is credible, the work shifts from survival to repair. The turnaround plan is where the operational thesis becomes a sequence of decisions with dates, owners, and cash consequences.
Diagnosing the operating problem
The analytical work is to identify where value is actually being destroyed, which is rarely where management believes it is. Build profitability by customer, by product, and by location. In most distressed companies a meaningful share of revenue is unprofitable at the contribution margin level, and it is frequently revenue the organisation is proud of.
Separate fixed from variable cost properly, then compute the contribution margin of each business unit and each site. The output is usually a small number of actions with disproportionate impact: exit these twelve customers, close these four locations, discontinue this product family, reprice this segment.
The levers, ranked by speed
Working capital is almost always the fastest and largest source. Collections discipline on overdue receivables, inventory reduction on slow-moving SKUs, and payment term negotiation with suppliers can release cash within weeks and does not require structural change.
Discretionary spending — non-essential capex, travel, marketing, consulting, open headcount — stops immediately and buys time, though it borrows from the future and cannot substitute for structural action.
Structural cost — headcount reduction, facility closure, footprint consolidation — delivers larger and durable savings but requires cash up front for severance and closure costs and takes months to realise. Sequencing matters: a company without liquidity cannot afford the restructuring charges that would improve its economics, which is the trap that turns a fixable operational problem into a filing.
Pricing is the most under-used lever. Distressed companies frequently discover that a portion of their book has been priced below cost for years and that customers will absorb an increase rather than switch, particularly where switching costs are real.
Vendor management
Supplier relationships determine whether a turnaround has time to work. The mechanics: identify which suppliers are genuinely single-source and which have alternatives; establish which are essential to production continuity; and negotiate deliberately rather than simply stretching payables, which is what a company does when it has no plan.
A supplier who is told the truth and offered a structured arrangement — partial payment of arrears, cash on delivery going forward, a path to normal terms — will frequently accept, because its alternative is an unsecured claim in a bankruptcy. A supplier who is simply not paid and not contacted stops shipping, and in a business with any production dependency that is a terminal event.
The 100-day plan
The output of the diagnosis is a sequenced plan: a set of specific actions, each with a named owner, a completion date, and a quantified cash and EBITDA impact, tracked weekly against the same discipline as the cash forecast. The early items should be the ones that are fast, certain, and visible — not because they are the largest, but because delivering them builds the credibility required to attempt the larger ones.
The plan's real function is organisational. A distressed company is full of people who know something is wrong and do not know what to do about it. A plan with dates and owners converts anxiety into work, and that shift is frequently worth more than any single action within it.