Shutdown Point

  

Categories: Company Management

At what point do you just euthanize the company. At what point do you just...shut it down?

When there's Nope, not Hope.

If it's just the debt that can't be paid off, most banks will restructure them, own the equity of the company, but keep the company going; they won't shut it down. Lots of creative ways for debts to be paid, and if you're lookin' for ideas, go and re-watch Les Mis.

The Shutdown Point happens when, say, a new 8-waffle hammer production system comes along that makes eight horseshoes for the same price as one. Now all of the single horseshoers can tighten their belts and cut costs and tweak production and marketing all they want...but they'll never compete with the new technology. At that point, as soon as you see the 8-waffler making shoes cheap and easy, then it's time to shut things down.

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