The Way Forward
I met three CEOs this summer. Each of them had the same issue although they were all in different industries: manufacturing, printing and retail. They each had a (pre-recession) $20-million company that's now doing around $10mm in sales. All three CEOs were killing themselves trying to get back to $20mm when in actuality that was not the best path forward.
I walked in and saw stress, strain and complexity all piled up in the hopes of attaining something which no longer exists. Instead of something that once was, I see what could be; a restructured $7million business which eliminates 90% of the headaches, makes money and is enjoyable. But each of these poor CEOs were killing themselves trying to regain the historical image of their business.
A quick example of rethinking a business happened to me a few years ago: The aging owners had a monstrous lumberyard, hardware store, truss shop, cabinet shop, etc. — none of which were making money. They also had a little side business in a different location that was hardly mentioned in our initial meetings. The side business was designing custom kitchens. And, oh by the way, the owners absolutely loved that business and hated the lumber/hardware/truss/cabinet business. So we sold off the big unprofitable business, settled with creditors and set the owners up with a new bank line of credit in the custom kitchen business. Today they're pocketing over $250k/year without scores of employees, inventory, receivables, creditors or headaches.
Unfortunately, these folks are in the minority. For every CEO who restructured his business and his debt, there are a dozen killing themselves trying to get back to 2006.