It’s never too late to engineer a turnaround at your company.

That’s a pretty bold statement, but I did it myself when I was in business and have been helping other contractors do it for almost 15 years now.

First and foremost, you have to be committed to knowing it can happen instead of wishing for a miracle to make it happen. Think, “This turnaround is happening,” before you even attempt to pull it off.

This isn’t some motivational speaker mumbo jumbo but rather the critical way you have to change your thinking. All great turnarounds start with the right kind of attitude and thinking.

Ultimately, I want you fired up about taking back your company from the jaws of defeat and get it headed in the direction of success.

Here are just 7 reasons your company might need to engineer a turnaround:

1. There’s been a change in the leadership. There are new family members either entering the business or exiting. The business might have been sold, and existing management is gone or needs to go.

2. There’s no clear leadership. There’s infighting as to who should take the lead resulting in a rudderless corporate ship adrift. Without a clear leader, power struggles take hold, and that will strangle any company.

3. The business sector you’re in is no longer viable. If what you’re doing and how you’re doing it are no longer relevant to the marketplace (the end user), you have to shift to clearly delineate what it is you do or you, too, risk becoming like the once mighty Kodak, which had to file for bankruptcy.

4. The business sector you’re in has become too competitive and/or too crowded. You can still be relevant, but if there’s not enough demand to support all the players competing to sell those products and services, you may need to reinvent your company.

5. You’re putting yourself and your family deeper into debt every day. If you’re ignoring the financial basics of creating more assets than liabilities, time is running out. You must cut expenses now. And sometimes it will mean ruthless cutting to save the “patient.”

6. You’ve been slowly killing the “golden goose.” If you’ve been pulling too much money out of the company without enough consideration to how it is robbing the company of future growth and potential cash dangers, you’re standing on very treacherous ground. Remember, it’s always easier to leave the money in the business than to take it out and have to put it back in. Set up a cash reserve based on a percentage of sales and have the discipline to leave it there for future growth and a “rainy day.”

7. You’ve expanded into too many businesses you have no business being in. It’s easy to get sucked into taking on new businesses and trades because you feel you have the overall structure to support it or you just got bored with your core business. There are a host of reasons why we stray too far. But, without clear market research, a plan for entering the marketplace, or the systems and support, this strategy is bound to lead you away from your core business, and you’ll end up ignoring the core of your business at your own peril.

Having more than 15 years of experience helping companies re-engineer themselves and pull back from going over the financial cliff, I’m pleased to say that when ownership knuckled down to the task at hand, the results were far and away positive for everyone. It’s not an easy path, and having a “trail guide” with experience is not a luxury — it’s a necessity.

Here’s a classic approach to engineering a turnaround:

1. Recapitalize the company by slashing the amount of money you take out of the company. Use cash to take out non-performing ownership so all who are left have a stake in the game and are willing to do what it takes to take this time-tested trail to a successful conclusion.

2. Seek to renegotiate existing debt with vendors for either longer payouts, lower interest rates, or whatever other tactics you need to employ that benefit both you and the vendor. The fact is, you defaulting on what you owe is a bad thing for all. This needs to be viewed as a “partnership” process for all concerned.

3. Separate expenses into two simple columns where one contains must-haves and the other column is nice-to-haves. Then, take a hatchet to the appropriate expenses.

4. Build cash by selling underperforming businesses and hard assets like trucks and inventory as necessary. Most times, becoming a smaller company that is profitable is far superior to the allure of being a bigger company with no profits or losses. Get your ego out of the way. Here’s the cool thing: You can grow again, but this time in a smarter way!

5. You can’t cut all your expenses and expect a healthy turnaround. You must also restructure the company by shifting resources to new, value-added product lines (i.e. green products and services) that utilize your company’s core expertise and help you develop a desired niche.

6. Spend your marketing dollars wisely by energizing targeted acquisitions that strengthen the new corporate direction. Acquisition done the right way is the surest way to build calls fast. That’s because you’re buying real calls versus marketing alone with the hope it will result in calls. Plus, you take out competitors in your marketplace which can create room to raise prices as you build heft. If you can shut down a competitor and put their company under your roof, you can make more money with their current sales than they could ever do as a stand-alone company bearing the burden of redundant expenses.

Engineer a turnaround at your company and reap the rewards.

This article was originally titled “Engineering a turnaround” in the February 2017 print edition of Plumbing & Mechanical.