Many things vary in life but some are nearly always the same. Knowing these virtually universal truths can save you a lot of time and needless brain energy. Here are a few golden rules to consider when rescuing a business or performing a turnaround.

You generally learn most of these by experience, but the trusting reader can avoid that expensive process – at least in respect of corporate turnaround – by reading on.

First of all understand turnarounds are companies on the decline; they are in or on the way to loss and they are eating cash. They also have to be capable of being turned around – some business models are clearly obsolete and cannot.

Typically a management team or owner will turn up looking for cash. They will tell you the problems are mostly external. They usually are not. A quick examination of the financial results of competitors will usually show the reality.

Unless the management is new to the company or the turnaround is caused entirely by external events (very rare!) it is a very good working rule that the top managers are not the means to sort the company out but in fact are the cause of the problems. In the memorable words of a former chief executive of one of my turnarounds, ‘I have never fired a man too soon’. Too true.

They will tell you that they only need say £5 million to sort it all out. It is invariably more and often a multiple of the alleged amount. In a recent case we were told £3 million and four days’ work revealed a need for nearly £50 million!

Always very sceptically and carefully check the cash needed. And then add a bit. Turnarounds are difficult enough without having to operate at the ragged edge of solvency with suppliers and staff in a constant state of anxiety.

You can very rapidly and very beneficially improve the morale of a troubled company by removing inept, or worse dishonest and greedy, management and at the same time getting rid of creditor pressure. It is genuinely gratifying to see the sudden arrival of confidence and an expectation of success rather than failure within a previously miserable and demotivated workforce. Improved performance invariably follows the improved mood.

Turnarounds are usually more urgent than management thinks. Their belief that they have three months to start to sort things out may not be shared by an exhausted bank or unpaid suppliers tiring of hassling for their money.

Then there is the last-minute irrational financier or buyer of the troubled business alleged to be about to sort it all out this week. Often they appear to be from immensely rich foreign climes. We call them the ‘Flying Carpet Solutions’. In the real world these normally turn out to be barely interested parties, totally unfunded chancers, interested competitors or vultures anxious to see the business fail. Fairy godmothers are rare in business.

All the time wasted in chasing the Flying Carpet is time for the business to get in a bigger mess. But desperate owners clutch at any straw and often all you can do is watch in despair.

Turnarounds are like most of life. Things that are unexpected often happen and, in a company that has been run by incompetent and/or dishonest people, they just happen more often. Indeed the theory that if it can go wrong, it will go wrong is not a theory when a company is in a mess, it’s guaranteed!

If you take one thing away with you – remember optimism is a state of error.

Related: Company turnaround tricks – Turnaround medicine does not come cheap for those at the helm of companies in distress, but rewards for rescuers can be tempting.