How We Turned a Struggling Business into a 5x Return

Welcome back to the Mid Market Insider!

Today, I’m sharing a story about a company we bought that looked solid on paper… until reality set in. I’ll walk through how we turned it around and how the changes we made led to a 5x return without selling the business.

Before we dive in…👇

Sometimes the Best Turnaround Starts by Listening to What’s Not Working

Every business hits a point where the numbers look fine on the surface… but something underneath isn’t right.

Years ago when we (Four Pillars) bought a business, the picture looked solid.

Margins were healthy. Revenue was stable. The team seemed experienced.

No glaring issues.

But about two years in, reality showed up.

Competition tightened.

A key contract fell through.

And internally, it became obvious that the business was running far more on instinct than process.

The operators were talented.

The effort was there.

But it was a “cowboys shooting from the hip” type of situation… not a scalable operation.

And when the business environment changes, instinct alone is rarely enough.

We needed a fix that would last.

We started where many owners avoid looking:

What exactly is not working?

Once we surfaced the real issues, the path forward became clearer.

1. Diversify the Revenue Base

When one customer or one product line carries the business, you’re exposed, even if it looks stable on paper.

So we expanded intentionally:

• New customers

• New end markets

• New product lines

The goal wasn’t to grow for the sake of growth.

It was to build stability by spreading risk.

Prior ownership had resisted this path because it was too costly. We found a more economical approach that made it a no-brainer.

2. Rebuild the People and Process Foundation

This was the tougher part.

Too much power sat with two individuals.

We put structure behind the work:

• Documented processes

• Built a real training program

• Distributed responsibilities

• Created leadership depth

It wasn’t glamorous, but it was necessary.

3. Layer Strategy on Top of Structure

Once the chaos settled and the processes held, we could finally think about strategy.

A new president eventually took over, replacing the long-time manager.

He built a scalable quoting department, expanded internal training, and brought a level of discipline the business had never experienced.

The results speak for themselves:

A new product line now matches or exceeds the legacy business.

The company has already returned 5x, and we haven’t sold it.

Turnarounds rarely start with the exciting stuff… new markets, bold strategies, or shiny opportunities.

They often start by listening to what isn’t working.

• The gaps people are quietly working around

• The processes nobody actually follows

• The dependencies everyone pretends aren’t risky

• The habits that helped you get here but can’t take you further

The biggest improvements come when you’re willing to confront those truths head-on.

This business didn’t turn around because of one big move.

It turned around because we acknowledged the problems early, rebuilt the foundation, and allowed the right people and processes to take over.

Sometimes the hardest part of building a better company is simply being honest about where the cracks are.

That’s all for today’s newsletter! Thanks for reading!

📅 Next Week:

Next week, I’ll be sharing we’ll be discussing the ins and outs of deal structure and why it’s more valuable than the actual valuation of your business.

Keep building,
Nick