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Do Not Dump One Line of Business to Grow Another One

Posted by: Rod Kurtz on January 15, 2009

The death knell of growth comes when you decide that a line of business is too much work for you to keep. Do not dump any line of business unless it is losing money and there is no way to adjust costs, or no other sales channel available to you to profitably sell those goods or services. Before you do anything drastic, perform what-if scenarios and make sure that you do not need any heroic change in other lines of business to survive.

I know of a company that dropped an old line of business on the assumption that the new line of business would grow at a 500% annual rate. It did not grow that much, and over time its growth declined to a modest 25% annually. As you adjust to meet the needs of today’s economy, adjust proportionately and avoid sweeping changes that can severely hurt your business.

Marilyn Holt
Holt Capital

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