When economic conditions tighten, compliance scrutiny increases, and access to finance becomes more complex, the difference between businesses that survive and those that collapse often comes down to one thing: how early they seek the right advice.
That was one of the strongest messages delivered by Daniel Frisken, Partner at O’Brien Palmer, during his recent live panel appearance at The Business Show Australia 2025, hosted by Juston Jirwander from Bishop Collins.
As a Chartered Accountant, Registered Liquidator, and professional member of ARITA, Daniel brought more than two decades of frontline insolvency, restructuring, and turnaround experience to the discussion – offering rare insight into what actually goes wrong behind the scenes of struggling SMEs, and how it can be avoided.
This was not theory. This was lived experience.
The ATO’s New Reality: Compliance First, Negotiation Second
One of Daniel’s most direct messages to the audience was about the Australian Taxation Office’s current enforcement stance.
“The tax office’s focus these days is compliance,” he explained. “They want compliance. If you don’t have that history, they’re not going to do a deal with you.”
Daniel made it clear that businesses hoping to negotiate with the ATO once they’re already in trouble often find the door firmly shut if their lodgements, reporting, and obligations haven’t been kept up to date.
In today’s environment, compliance is no longer just an administrative task. It is a strategic asset. Without it, options narrow dramatically. With it, pathways to restructuring, compromise, or turnaround remain open.
Why Structure Matters More Than Most Owners Realise
One of the most common mistakes Daniel sees is businesses outgrowing the structure they started with.
Many SMEs begin as sole traders or partnerships because it feels simple, cheap, and fast. But as revenue grows, risk grows with it. Poor structures can lead to:
- Higher tax exposure
- Limited borrowing capacity
- Weak asset protection
- Personal liability creeping in unnoticed
Daniel stressed that restructuring a business before it’s in trouble often makes the difference between a recovery and a collapse.
“You’ll see really good businesses that started small, but their structure doesn’t work at the size they’ve grown to. It limits their ability to borrow, increases tax, and removes options.”
The Hidden Danger of Easy Money
One of the most concerning trends Daniel highlighted was the rise of high-cost fintech lending. These products are fast. They’re accessible. And they can feel like a lifeline. But they often come with crushing long-term consequences.
“I see businesses grabbing these products because they’re desperate for cash. They don’t understand the true cost. When you strip it back, they’re paying more than a credit card.”
Daniel explained how he regularly sees businesses operating on thin margins, sometimes 10–15%, while unknowingly carrying finance products costing them 20% or more. At that point, no amount of effort can save the business. It is mathematically impossible to win.
The Silent Risk Most Owners Don’t See: Personal Guarantees
Another critical warning Daniel shared with the audience related to personal guarantees. Today, most suppliers and lenders demand them. What many directors don’t realise is that personal guarantees effectively dismantle the protection they believe a company structure gives them.
“Their first step is your house,” Daniel said bluntly.
Even if a business is restructured or wound down properly, personal guarantees remain. Creditors can still pursue the individual. This is why early asset protection planning is so important. Not to avoid responsibility, but to preserve negotiation power.
“When structures are set up properly from the beginning, it gives me more options as a liquidator. More options means better outcomes.”
The Habits That Separate Surviving Businesses From Failing Ones
When asked what successful SMEs consistently do differently, Daniel didn’t sugarcoat it.
- No cash buffer
- Mixing personal and business finances
- Taking profits without planning for tax
- Buying lifestyle assets before stability
- Not speaking to advisers until it’s too late
The solution is not complex. But it does require discipline.
A business owner needs to be planning all year long with your accountant.
Finances should be separated from personal. Buffers should be built in and you should have a clear understanding of your tax obligations.
Setting clear personal and business goals, as well as creating small habits, compounded over time, are what protect businesses when conditions change.
Why Daniel’s Perspective Is So Valuable
What made Daniel’s contribution stand out was not just his technical depth, but his grounded, real-world approach. He has led restructures, wind-downs, creditor negotiations, and complex insolvency matters across countless industries. He understands not only how businesses fail, but why.
And more importantly, he understands what can be done before they reach that point. He is not just there when things collapse. He helps prevent collapse.
Most business failures are not sudden. They are slow. And by the time many owners seek help, the number of viable pathways has already narrowed.
Early advice doesn’t mean insolvency. It often means avoiding it.
At O’Brien Palmer, Daniel and the team work with businesses across the entire lifecycle, from early warning signs through to complex formal appointments. The goal is always the same: preserve value, protect people, and find the most commercially sound outcome available.
If you or someone you know is experiencing financial distress, reach out.
The sooner the conversation begins, the more options you have.
📞 Call us at (61) 2 9232 3322 for a confidential chat.
📩 Email us at: obp1@obp.com.au
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