Even though pivoting can give a failed business new life, it also means giving up on what you had previously invested in. Making this brave move (practically and emotionally) can feel like such a conflict for business owners. When a company is just starting out, the first goal is often to get as many customers as possible and then to figure out how to make money off of them. But this isn’t always the smartest strategy and at some point, businesses may find themselves in a bit of a slump, and requiring a re-think. If you've been thinking about turning your business around, here’s what to consider before making your move.
What does it mean ‘to pivot’?
When you understand that your current products or services aren't meeting the needs of the market, you may need to change the direction of your business in a big way. The main goal of a pivot is to help a business make more money or stay in business, and this requires a change in mindset, product and positioning. How you turn your business, however, can make all the difference.
When is it time to change direction?
There is no magic wand that can be waived to change a business’s trajectory. This needs to be carefully considered and only done when absolutely necessary. It might be time to change the direction of your business if, for example, you haven't made much progress even though you've spent a lot of money and time on it. Or if there is too much competition or the company's growth has stagnated. It could also be required if customers aren't responding to your products in the way you thought they would. In these cases, you may consider pivoting in order to better meet your customer’s needs, boost sales, or navigate big industry changes.
Focus on core aspects of the business
One of your business’s main features holds the key to a good pivot. No single answer can work for everyone. The more features you try to add to your product at the same time, the more confused your staff and customers will be and the less effective your marketing will be. Instead, go with the “less is more" approach when pivoting. And focus on one core aspect that can shift in relation to the rest of the business.
Choose realistic goals for your business
When you change the way your business works, you need to set new goals that fit in with your new direction. Decide on new goals for sales and customer growth. If you compare your business to the original goals, you won't get a clear picture of how well it is doing in this new positioning.
Understand your customer, well
If you can't find anything wrong with your goods but it's not selling, you might be selling them to the wrong people. For example, you might have a customer-facing service that would be well-suited for B2B companies. If you pivot your offering so that you sell the product straight to B2B companies, you can increase sales and get more traction. In this situation, you wouldn't have to change anything about your goods. You'd just have to change your business plan and who you are selling to.
Survey the competition
Look at what your main competitors are doing and how you can do it better before you make any significant changes. If you want to sell the same items or services as your competitors for about the same price, you might not get very good results. Figure out what your competitors are doing well first, how big they are and whether you can compete. Then you can make decisions around what is required and how much needs to change for you to make an impact.
Plan your moves before you act
There are many ways to change the direction of your business. Before you make any big changes though, make sure your entire team is on board and in agreement with the shifts. Before putting your product pivot into action, you should also test it and come up with a thorough pivoting strategy that works with all the core parts of your business.
The bottom line
Everyone knows that starting a small business and making it grow will come with some difficulties. But when the long-term financial health of the business is under threat, it may be important to pivot and change strategies, while leveraging off your existing structures. The most successful and long-lasting businesses have been able to stay in business because they have shifted alongside their customers and the market conditions and found ways to remain relevant and profitable. To fund your pivot strategy in the next 48 hours, contact Merchant Capital today.