Supporting business owners facing financial distress has not only been a career focus for Stephen Barnes FCA, principal consultant at Byronvale Advisors, but also his passion.

The Melbourne-based business turnaround and crisis management specialist has written two books (both of which are available through the CA Library), Run Your Business Better and Triage – The Art of Business Turnarounds. The latter, released in 2024, draws on Barnes’s 30 years of experience dealing with complex business problems.

Barnes says there’s not a lot of support for business owners.

“There’s a false perception that business owners are wealthy, but the reality is completely different,” he says.

A 2023 Xero study found that in New Zealand, 46% of business owners and 60% of sole traders aren’t paying themselves, in order to keep their business running. Similarly, a 2025 CommBank survey revealed that 27% of Australian SME owners drew on their personal savings or didn’t pay themselves a salary, or both, in the past year.

A more balanced view

Barnes says the way people talk about insolvency and struggling businesses is wrong.

“Failing business owners are demonised and seen as bad people because they haven’t paid their creditors,” he says. “The majority of them are not. Everyone’s got a story.”

Additionally, he says, solutions tend to focus on incorporated companies.

“Small enterprises can’t avail themselves of the legislative slate of remedies that incorporated companies can. In Australia, only 1% of incorporated companies per year are failing while for SMEs, it’s 23%. We need to be concentrating on them.

“In both New Zealand and Australia, legislation is skewed and protects creditors. I believe a more balanced approach can be taken, looking at how can we get a better outcome for everybody involved.”

If a business goes into liquidation or administration, the aim is to get the best outcome for the creditors, says Barnes, “but the staff of that business will lose their jobs, their suppliers might go under, or, if it’s a big business in a small town, there are serious ramifications on the whole community.”

Turnaround strategies

As described in Triage, Barnes likens his turnaround methodology to medical assessment and treatment in an emergency department.

“During the analysis phase I determine what’s caused the problem, establish how they got here,” he says. “Then, during the emergency phase, I determine what we need to do to keep the business alive. This might include calling creditors, debt restructure and evaluating products and services. Once the emergency phase is over and we have bought some time, we enter the crisis stabilisation phase, which is about how to operate as a normal, functional business.”

Barnes says many SME owners lack business acumen.

“For example, they’ll think, well, I’m a good electrician but my business isn’t going very well, so I’ll just do some more electrician work. But it’s because they haven’t spent time chasing up the debtors, doing compliance and tax work, their marketing.”

He advocates they spend a day each week working on their business, rather than in it.

“It will be the most valuable day in the week that they have,” Barnes explains, adding that as part of his business recovery work, he coaches clients so they have better skills and the right structure and support systems around them to thrive.

Early intervention

Barnes says the key to a successful business turnaround is to seek help early. He recommends tax practitioners keep an eye out for the first signs of business distress, such as clients falling behind in tax and compliance work, their quarterly returns, or not paying super on time.

“If this goes on for too long, the ATO or IR are going to come in with a big hammer and take some action. And when they do, it’s too late.”

He says tax practitioners should seek specialist help for these clients.

“If a specialist can help an accountant turn a client’s business around, then they will still have a client and still get the money that’s probably owed to them.”

Managing mental health

SME owners frequently face significant mental health challenges, including stress and feelings of isolation. A recent MYOB study showed 45% of New Zealand owners facing declining revenue experience this – and the statistics are similar in Australia.

An accredited mental health first aider, Barnes has a special interest in supporting struggling clients and he urges practitioners to be alert to mental health distress.

“If you see any signs of trouble, have a conversation with them, ask them if they need some help because being in business is a lonely business,” he says.

“Just having that conversation might be a weight off their shoulders, and you can refer them to specialist help.”

Find out more

Learn about insolvency and the support CA ANZ provides for members working in this field here.