Care provider stabilised through Small Business Restructuring

Case Study

Industry: Disability and aged care services
Location: Queensland
Employees: 60+
Annual revenue: Approx. $5M–$7M

Solution: Small Business Restructuring

Background:

Disability and aged care provider under pressure

A Queensland-based provider delivering disability and aged care services had built a strong reputation for supporting individuals with permanent and significant needs.

Operating within a broader group structure, the business provided shared staffing resources across related entities. While designed to support governance, over time it became increasingly difficult to maintain clear financial visibility across the group.

During COVID, demand for one-on-one care surged. The business responded by expanding rapidly – growing its workforce and moving into larger premises. While this ensured continuity of care, it also increased costs and exposed gaps in systems and financial oversight.

The challenge

When growth outpaces systems, controls and advice

Despite strong demand, the business came under increasing financial pressure.

Labour costs rose due to overtime, absenteeism and reliance on casual staff, while inefficient rostering made these costs difficult to control. The business also continued servicing unprofitable clients and carried high fixed overheads, including rent.

Financial management issues compounded the problem. Inter-entity transactions were not accurately recorded, limiting visibility across the group. While external accounting advice had been sought, it failed to address longer-term sustainability or identify underlying structural issues.

As Chris Baskerville, Partner at Jirsch Sutherland, explains, “This was a business with strong underlying demand and a clear purpose, but it had outgrown its systems and cost base. With pressure building, the director needed a solution that would stabilise the business while maintaining essential services.”

The solution

Restructuring in real time while continuing to care

Chris Baskerville was appointed as Restructuring Practitioner under the Small Business Restructuring (SBR) regime, allowing the business to continue trading while a turnaround plan was implemented.

“The Small Business Restructuring process provided a framework to reset operations while continuing to trade, which was critical given the essential nature of its services,” he says.

The focus was on restoring control across operations and financial management.

Operational changes included:

• reducing staffing levels to align with sustainable demand
• addressing underperformance
• improving rostering practices
• exiting unviable client arrangements
• fixed costs were also reduced, including vacating high-cost premises.

At the same time, financial discipline was rebuilt. A new bookkeeper and accounting advisers were engaged to correct historical issues, properly record inter-entity transactions and deliver timely, accurate financial reporting.

Hanzel Hizola, Principal at Jirsch Sutherland, says this type of reset is often key in service-based sectors. “We’re seeing more businesses with viable cores but structural inefficiencies – particularly in labour-intensive sectors,” he says. “The key is identifying what’s working and restructuring around that.”

A formal restructuring plan was implemented to deliver a return to creditors. Funded through trading and cost savings, the business committed to contributions of approximately $267,000, equating to an estimated return of 30 cents in the dollar – significantly stronger than the likely outcome in a liquidation scenario.

The outcome

Stability restored and a platform for growth

The restructuring marked a turning point for the business. It continued trading throughout the process, preserving more than 60 jobs and maintaining continuity of care for vulnerable clients. At the same time, it emerged with a leaner cost base, stronger financial controls and improved operational discipline.

“In a liquidation scenario, returns to creditors were highly uncertain and likely delayed,” says Baskerville. “The restructuring plan provided a more certain, timelier outcome, while preserving jobs and enabling the business to move forward.”

With improved governance and clearer financial visibility, the business is now better positioned for sustainable growth.

“The outcome highlights the importance of addressing root causes,” says Hizola. “For an SBR to succeed in the long term, it requires a willingness from the director to acknowledge what hasn’t worked and commit to meaningful change – not just in systems and processes, but in mindset as well.

“SBR gives directors the opportunity to remain in control while making meaningful operational changes. Once cost discipline and governance are addressed, businesses like this can stabilise and rebuild.

Key takeaways

Why early, proactive restructuring matters

• Rapid growth can expose weaknesses in systems, cost control and financial oversight
• External advice must address structural issues, not just compliance
• Labour-intensive businesses are particularly vulnerable to margin pressure
• Clear financial visibility is critical, especially in group structures
• Early action expands restructuring options
• Small Business Restructuring can deliver better returns, preserve jobs and maintain essential services