Business Turnarounds

One of the toughest jobs in the business world is turning around a failing company. But it can be done. Here's some advice:

"Everybody's first reaction is, 'Gee, the banks and debt holders hold the keys to the problem,' " he said. "Usually, it's the opposite. The company holds the answers."

Auchterlonie says firms should look at what's driving cash flow and EBITDA (earnings before interest, taxes, depreciation and amortization). It tells how a firm is doing, accounting and financing issues aside.

Then comes the hard part: knowing what to keep vs. cut.

"It's really understanding what causes the demand," Auchterlonie said. "What are the things customers like about the company's products? Why are they buying?"

There are good lessons to be learned from this article, and quick case studies of Select Comfort and Middleby.