THE “OH CRAP” CHECKLIST: THE EMERGENCY CHECKLIST FOR A BUSINESS IN TROUBLE

Harrison didn’t wake up one day and decide to blow up the business.

It started the way it always starts.

A few wins. Some momentum. A little confidence. Then more deals. More moving parts. More decisions made fast, because things were “working.”

Until they weren’t.

In my podcast this week, Harrison tells the story of building a real estate business deal by deal. Money was coming in. Money was going out. The team was busy. Projects were moving. Money was hitting the bank account.

Now, if you looked under the surface, the financial picture was blurry. But why worry about it? Things were going well so it didn’t matter! Except that the economic conditions changed. And when the tide turned (interest rates, refinancing assumptions, cash needs), they didn’t just have a “money problem.”

A playbook they’d been running for years all of a sudden didn’t work.

It was then that the numbers being blurry started to come back to bite them.

This wasn’t that they weren’t working hard or they were “bad people” but it was because the good had lulled them to sleep on the unknowns. Business is so complex; this is super common even in good long-term successful businesses.

Yes they had business problems but in the end they really had clarity problems. They had no insights into their numbers so it was hard to know what actions to take.

One of the most dangerous places in business is when you might be losing money, and you can’t tell.

It’s when you open your financials and think:

“I don’t trust this.”

“This doesn’t match what I feel in the bank.”

“If I had to make a big decision today, I’d basically be guessing.”

If that’s you, you’re not alone.

You’re also not stuck.

Today I’m writing to those who might find themselves in this spot in the future. Sure there are some actions you can take today but this is a playbook for what to do when you find yourself in this difficult inflection point.

Listen to the podcast and hear what Harrison did on your favorite podcast platform:

Apple podcast ⎪Spotify ⎪ Youtube

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THE URGENT LIST

1) Stop pretending you can think your way out of bad data

If the numbers are unreliable, your brain becomes the accounting system.

At that point you’re in survival mode and you never want to be there because of your mistakes. Acknowledging where you are and that you’re going to need to buckle down is the first step to making changes.

Acknowledging the truth of the situation requires that you get real and take it seriously.

Strategies will come later. We just need truth right now.

2) Create a one-page “reality snapshot” (today)

Before you fix the entire accounting system, you need a simple snapshot you can trust.

In one document, write:

• Cash in the bank today (real number)
• Credit card balances (real number)
• Total accounts receivable (how much customers owe you)
• Total accounts payable (how much you owe vendors)
• Obligations (Payroll, debt, taxes, etc) due in the next 30 days

This is not your forever view but it’s the “stop the bleeding” right now view.

If you can’t get these numbers easily, that is the point. You need a system.

3) Map the next steps & decide the first course of action

This is where so many people get it wrong. They see all there is to do and instead of doing something they do nothing. Over time the problem compounds and they find themselves in an even worse spot.

I made number one because when you see the problem, you need to stop and address the problem.

Now that you have your one-page snapshot and know the reality, spend some time to list all that needs to be done.

Next, rank them from highest priority to lowest. Some will be required to go in sequence and you can group those together. Others will be independent actions that can be rated on their own.

This is where you may have to make some hard decisions. When cutting expenses, think in terms of cut, pause, renegotiate, or not pay.

Once you’ve rated them, decide your first course of action. This is the thing that we need to take and make an immediate decision on.

The longer we delay, the easier it becomes to continue to delay. Stop right now and do that most important thing.

Forward momentum is your friend in this process.

ALL THE OTHER THINGS

When things go bad the biggest problem you have is not having good data to actually analyze. These next steps are a mixture of ways to improve your books but then also other general things you can do as courses of action.

4) Decide what “clean books” means (so you don’t waste months)

At some point you have to clean up the previous mess. Now we don’t want to spend a lot of time here but you need to make decisions about the previous so you can make better ones in the future.

Where owners often get stuck is they don’t define “done.” They say, “We need better financials,” but they never define what “better” means.

Here’s what I mean by clean books:

• The P&L is categorized consistently month to month
• The balance sheet is accurate (cash, debt, credit cards, payroll liabilities)
• You can explain the biggest line items in plain English
• Someone outside your business can read your financials and understand what happened

Don’t worry about getting every single transaction right. Start by coding stuff by vendor and then in the big line items, determine what’s important or not.

Unless you’re a massive business, cleanups shouldn’t take more than a handful of weeks.

We don’t want perfection, just clarity and a starting point to move forward.

5) Run the “can I understand this?” test on your financials

Pull your most recent:

• Profit and Loss (P&L)
• Balance sheet

Then ask:

• Does this match what I believe about the business?
• Are there obvious categories that are wrong or unclear?
• Are there big “misc” or “ask my accountant” buckets?
• Are payroll taxes and credit cards reflected correctly?
• Are owner payments separated cleanly from business expenses?

If your answer is, “I have no idea,” you do not have financial statements.

You have a report, but they aren’t actually useful to the business.

We need to get to financials, you understand, to actually “know the business.”

When we know the business, we can circle back to the previous list of priorities we made and we may reorder them based off of things we found from those helpful financials.

6) Fix the close process before you fix forecasting

A lot of owners want a forecast because because they can paint a rosy picture of what will happen in the future and provide themselves some fake relief.

I get it.

But forecasting on messy books is like building a house on wet concrete.

You can do it, but you’ll regret it.

Your order of operations should be:

1. Clean close
2. Repeatable reporting
3. Then forecasting

If you skip step 1, every forecast becomes a debate about whether the starting point is real.

We won’t get into the specifics of what a clean close looks like here but a few key things to pay attention to each month are:

• making sure you reconcile your accounts
• you have a process for reviewing your transaction coding

7) Pick one owner-level metric to stabilize first

When owners feel out of control, they often try to track 20 things. But tracking those 20 things can make it worse. The lack of focus can eat the business alive.

Since you now understand your numbers, you can start to think about what levers you have to actually fix the situation long term.

Pick one stabilizer metric based on your situation:

• If cash is tight: 13-week cash runway (even a rough one)
• If margins feel fuzzy: gross margin by service line
• If delivery is chaotic: labor as a percent of revenue
• If collections are a mess: days sales outstanding (DSO)

Focus on one metric and take it one week at a time. This should get a maniacal amount of effort from you and anyone on the team, a part of this process.

You are not becoming the finance person but you are doing what is required to regain control.

8) Put your business into “decision lockdown” for 30 days

If you don’t trust the numbers, make fewer irreversible decisions.

For the next 30 days:

• Avoid big hiring decisions (unless it’s a clear operational emergency)
• Avoid new debt (unless it prevents a catastrophe)
• Avoid new service lines and shiny projects
• Avoid big “growth” expenses that are really emotional spending

Instead, focus on:

• Cash visibility
• Accurate reporting
• Stabilizing delivery

This does not mean you stop operating, but it does mean that some of the team may feel real pain and “impact” from these decisions.

Don’t shy away from this, as I guarantee they’re talking behind your back.

Make it clear what you’re doing and why and what you think the path out is.

9) Get the help that matches the problem

Here’s the simplest rule I can give you:

• If the books are wrong (inputs are unreliable): you need a bookkeeper or a cleanup project.
• If the cash is tight or you need a plan to get out: you need CFO-level support.
• If execution is the constraint (the business is bleeding): you need an operator.
• If demand or lead flow is the constraint: you need marketing and sales help.

Harrison first reached out to me because he thought, “Oh a fractional CFO can help.” When we talked it was very clear his data was so bad there was not much I could immediately do.

While I could have helped I felt the better route was to pay someone less than what I was charged to do the cleanup and then come back to him if he needed something after that point.

Ultimately for me it’s about doing what’s best for the person, not selling the thing.

Most owners hire the wrong help because they hire based on pain, not diagnosis.

Pain says, “I need relief.”

Diagnosis says, “I need clean inputs.”

10) Build a “calm rhythm” that keeps you out of the mess

After you’ve established your focus and you’ve started to make progress, now it’s time to focus on the real long-term fix. It’s time to focus on starting to create a system.

The goal is not to clean up once and then go back to your previous ways. The goal is to clean up and stay clean.

To do this we need to insert some simple rhythms into your finance and accounting stack:

• Weekly: 15-minute cash check (bank, AR, AP, payroll, debt)
• Monthly: close process & financial statement review(P&L, balance sheet, 3 drivers)
• Quarterly: decision review (pricing, hiring, capital, risk)

Your business does not need more hustle.

It needs a rhythm that creates clarity.

CLOSE

One of the most honest lines in that conversation with Harrison was simple: “You just keep going.”

But I want to add something to it, because most owners misinterpret that idea: “keep going” should not mean “keep guessing.”

It means:

• Keep facing the truth.
• Keep cleaning up the mess.
• Keep taking the next right step.

When you don’t trust the numbers, you’re not just dealing with accounting.

You’re dealing with fear, uncertainty, and a lack of clarity. Clarity comes from a system.

If you’re in that season right now, don’t jump to the big strategic move. Do the basics. Get the truth. Stabilize cash. Build a rhythm.

Then make the decision.

Here’s to hoping you’re never here.

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