The 24 signals every owner should check this month
Businesses rarely fail overnight. The signs show up months earlier, in the numbers the owner already has: how long the account sits at its limit, how slowly customers pay, how much stock is sitting on the shelf, whether tax is paid on time. The signals are there. The question is whether anyone is reading them.
The owner, meanwhile, is often the last to admit it. Not from ignorance, but because every warning sign has an explanation. The overdraft is high because of a big order. The supplier is being difficult. The tax payment will be caught up next month. Each explanation is reasonable. Together, they describe a business running out of road.
This article gives you a simple way to read those signals honestly, and to act while the fix is still cheap and entirely in your hands.
Four lenses, twenty-four indicators
The first stage of The Dawgen RECOVER™ Framework, Recognise, tests twenty-four indicators through four lenses. You can do it yourself in an evening.
Liquidity: can you pay this month’s bills?
- The overdraft has been at or near its limit for more than 30 of the last 90 days.
- You have under eight weeks of committed costs in cash or available facilities.
- Payroll has been met using money meant for suppliers or tax.
- A cheque or transfer has been returned in the last 90 days.
- Your cash conversion cycle is over 120 days, or has risen by 30 days in a year.
- More than a quarter of your debtors are over 90 days.
Solvency: can the business carry its debt?
- Operating profit covers interest less than 1.5 times.
- Net debt is more than four times operating profit.
- Net assets are negative, or positive only because of a property revaluation.
- You have breached a covenant, or received a waiver or a reservation-of-rights letter.
Statutory: are you using the government as a lender?
- Any GCT, VAT, PAYE, NIS or pension deductions are in arrears.
- There is an unresolved tax assessment or demand notice.
- Annual returns or financial statements are more than six months late.
Operational and behavioural: is the business, and its owner, under strain?
- Gross margin has fallen three points or more in a year.
- A supplier has moved you to cash on delivery or deposits.
- You are running out of core lines regularly.
- One customer is more than 30% of sales.
- Your finance lead or a key manager has left in the last six months.
- Management accounts do not exist, or arrive more than 60 days late.
- Owner drawings exceed profit after tax.
- Nobody forecasts cash beyond the current month.
- Calls or letters from lenders, suppliers or the tax authority have gone unanswered.
- Your home is pledged against the company’s working capital.
- Loans to or from directors or related companies are growing, with no written terms.
Reading your score
Count your red flags honestly. Then place yourself on the RECOVER™ scale.
| Grade | What it means | What to do |
| 1 Watch (1–4 flags) | Profitable but strained | Fix working capital now, while it is cheap |
| 2 Strain (5–9 flags) | Pressure is visible to outsiders | Start a structured recovery now |
| 3 Distress (10+ flags, or any critical one) | Short of cash to meet obligations as they fall due | Take control of cash in fourteen days |
| 4 Crisis (under four weeks of cash) | Cash nearly exhausted; creditor action threatened | Act this week, with experienced support |
Three indicators count as critical on their own: under four weeks of cash, staff deductions held back for more than 90 days, and a demand already received. Any one of them puts you at Grade 3 or worse.
Why early matters so much
At Grade 1, every option belongs to you. You can collect faster, clear old stock, renegotiate supplier terms and fund the gap from inside the business. Nobody outside needs to know.
At Grade 2, the pressure is starting to show to suppliers and staff, but you still have time and choices. An owner who starts a structured recovery now, with weekly cash numbers and a clear plan, usually fixes the problem from inside the business.
At Grade 3, the recovery is still yours to lead, but it needs firm control of cash within fourteen days and a credible plan fast.
At Grade 4, time is the scarcest resource. The work is the same; there is simply less room to do it.
The difference between Grade 1 and Grade 4 is rarely the size of the problem. It is how long the owner waited before naming it.
The two questions owners should ask every month
Alongside the twenty-four indicators, every owner should ask two questions every month:
- Can the company pay its debts as they fall due?
- Do the realistic values of its assets exceed all its liabilities?
While the answer to both is yes, the business has room to recover privately. RECOVER™ is designed to keep it there. If the answer to both becomes no and no agreement can restore them, directors must get advice from attorneys on the options available under the Companies Act; Dawgen Global works with its panel of attorneys when that is necessary. The whole purpose of watching the indicators is never to reach that point.
Score yourself tonight
Request the RECOVER™ Early Warning checklist and score your business tonight. It takes less than an hour.
If you find five or more red flags, call us this week. A confidential RECOVER™ Diagnostic will grade your business, score it on the RECOVER™ Recovery Score, and give you a first 13-week cash flow and a clear first step, within two to three weeks and without anyone outside your business needing to know.
Talk to us in confidence. Dawgen Global serves clients across more than 15 Caribbean territories through one borderless delivery model.
[email protected] · https://www.dawgen.global/
Big Firm Capabilities. Caribbean Understanding.
Next in the series: “Find the Cash Already Hiding in Your Business.”
This article describes patterns observed in private company advisory work. Examples are illustrative composites, not Dawgen Global clients. It is general information, not advice for any specific business.
About Dawgen Global
Dawgen Global is an independent, integrated multidisciplinary professional services firm headquartered at 47 Trinidad Terrace, New Kingston, Jamaica, serving more than 15 territories across the Caribbean. Founded and led by Dr. Dawkins Brown, Executive Chairman, the firm is independent and not affiliated with any international network. It delivers a full suite of professional services under one roof: audit and assurance; tax advisory; IT and digital transformation; risk management; cybersecurity; actuarial and insurance regulatory advisory; HR advisory; mergers and acquisitions; corporate recovery; business advisory and strategy; accounting BPO and virtual CFO services; and legal process outsourcing.
The proposition is simple: big-firm capability without the big-firm price. Dawgen Global’s integrated approach is built for the specific complexities and opportunities of the Caribbean market, helping organizations make sharper, better-informed decisions that drive measurable progress.
To explore a partnership, reach out:
- Website: dawgen.global
- Email: [email protected]
- WhatsApp (Global): +1 555-795-9071
- Caribbean offices: +1 876-665-5926 | +1 876-929-3670 | +1 876-926-5210
