Interesting article here by Seth Godin about how businesses end up in a death spiral.

You've probably seen it. The fish monger sees a decline in business, so they have less money to spend on upkeep and inventory, so they keep the fish a bit longer and don't clean up as often, so of course, business declines and then they have even less money... Eventually, you have an empty, smelly fish store that's out of business.

As Tom Peters says, "You can't shrink your way to greatness,"

It's the same thing churches do when they don't have enough people, or are afraid or burning people out, or cut back instead of pushing ahead with their God giving vision and goals.