The Problem: 4 Ways Unfair Contracts Caused a Cash Flow Crunch for Pushcart
Firstly, the company’s troubles began when it committed to contracts that were, in reality, unprofitable. These agreements came from peak contractors who had already taken a margin before passing the work down. The final subcontractor – this small business – was left with unrealistic expectations and low margins.
Secondly, retailers were slow to pay and often underestimated the time and effort required to recover shopping trolleys. Then, staff costs ballooned, and the director frequently had to cover wages out of his own pocket. Despite employing casual staff, overtime and penalty rates still applied, further complicating the cost structure.
Finally, as debts mounted – including PAYG and other obligations – the business struggled to stay afloat while trying to exit these contracts.
About the Company
In South East Queensland, a small business providing shopping trolley recovery services found itself in a financial squeeze. The company operates as a subcontractor to major shopping centres and retail outlets across Queensland and other parts of Australia. With a focus on non-metropolitan and outer suburban sites, the business employed up to 80 casual workers – many of whom were overseas students or new immigrants with limited English proficiency.
The Solution: GM Advisory Steps In
GM Advisory was called in to help the business navigate its financial crisis. Their role was to build a case for the company’s value – not just to its employees, but to suppliers, lenders, and the broader community. The argument was simple but powerful: keeping the business running, even with its debts, was a better outcome for everyone involved.
Working alongside the company’s accountant and a Small Business Restructuring Practitioner (SBRP), GM Advisory negotiated with the ATO and other creditors. The result? A debt settlement plan where the business paid 30 cents on the dollar – starting with a lump sum and followed by instalments over 12 months.
The Turnaround: A Leaner, Smarter Business
With the debt relief in place, the director was able to exit unprofitable contracts and focus on clients who valued the service. Most staff were retained, and the team was downsized naturally to match the needs of a more agile operation.
The director also gained a clearer understanding of contract costs and cash flow management. With better financial oversight and a more sustainable business model, the company is now positioned for long-term success.
4 Key Takeaways for Small Businesses Relying on Big Contracts
This case highlights several critical lessons for small business owners:
- Understand the true cost of contracts before committing – especially when dealing with head contractors or large corporations. At GM Advisory, we even call this the Project Pushcart Problem.
- Beware of long payment terms and unrealistic expectations that can erode margins.
- Don’t confuse activity with profitability – keeping people busy doesn’t always mean making money.
- Seek professional help early – debt negotiation and restructuring can offer a lifeline before things spiral.
Need Help Navigating Debt or Unfair Contracts?
If your business is facing cash flow challenges, unmanageable contracts, or mounting tax obligations, GM Advisory can help. With deep experience in small business restructuring and debt negotiation, we work with you to build a sustainable path forward – protecting your team, your reputation, and your future.
📞 Contact GM Advisory today to discuss how we can support your business through tough times and help you thrive.
