Letting Go

Is your business stretched to capacity? Find out what's not making money--and drop it.

Craig Miller had a profitable, growing business providing temporary accounting services to companies in Atlanta. But in January 1997, the founder and CEO of MA&A Group Inc. sold the accounting operation to concentrate on information technology consulting, something he originally got into as a sideline.

Why shed a successful operation? Inadequate financial resources is one reason. "We were always having discussions to determine where the profits would go," recalls Miller, 40. "There wasn't enough to do both sides of the business."

Limited management time is another reason. "I was running the accounting side, and my wife was running the IT side," he says. "Nobody was running the whole business." The changing market for accounting employees also influenced the move. When Miller started the company as a temporary services agency in 1989, it was an employer's market. Today the temps are hard to come by, while the jobs go begging.

Miller's move would be applauded by Peter Drucker, popularizer of a concept he calls "organized abandonment." The influential management theorist says companies should look for products, serv-ices, markets, customers, channels and processes to leave behind as energetically as they seek new markets to conquer. Abandonment, Drucker says, helps entrepreneurs avoid obsolescence and frees resources for better opportunities.

One of the most notable abandonment practitioners is Enron Corp., a $34 billion Houston company that turned the electric-utility field upside down in 1993 by abandoning ownership of power plants and transmission lines, according to Steven Collier, a partner at The Institute for Management Development and Change, an Austin, Texas, utility consulting firm.

Abandonment worked well for Miller. MA&A's 1998 sales were 263 percent higher than 1997's, mostly due to a sharper focus made possible by shedding the accounting component, Miller says. He advises other entrepreneurs to follow suit by determining not what businesses to start, but rather "Do I need to get out of the businesses I'm already in?"

Mark Henricks is an Austin, Texas, writer who specializes in business topics and has written for Entrepreneur for 10 years.

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This article was originally published in the February 2000 print edition of Entrepreneur with the headline: Letting Go.

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