For small businesses struggling to gain traction in the marketplace, there are two common options: continuing to forge ahead or quitting altogether. But there is a third option: pivoting your business to embrace a new strategy for success.
“To pivot” entered the business vernacular thanks to Eric Ries, an entrepreneur and the author of The Lean Startup. Ries noted that some of the biggest companies in the world today—such as Facebook and Starbucks—pivoted from their original strategy to reach incredible heights.
Pivoting isn’t about starting from scratch, abandoning what you’ve already accomplished, or, conversely, making minor tweaks in the hopes of salvaging the original concept. To pivot your business is to take what you’ve learned, the team you’ve built, and the connections you’ve made, and finding a whole new way to utilize them.
The decision to pivot isn’t an easy one, but when the time comes, it’s important to move quickly. Here is the six step process to pivot your business:
Decide whether you need to pivot
Of course, the first step is deciding whether your company needs to pivot to find success, or if you should shut it down altogether. The distinction isn’t always clear, especially for new business owners.
There are lots of reasons why a business might decide to pivot. If more than a couple of these conditions are met, it’s likely that a minor tweak to your business model won’t be enough to save the company:
- Growth has halted: Every business reaches a plateau at one point or another, but in order to succeed, your company needs to continue growing. If you find that sales have leveled off and won’t pick up no matter what you do, that’s a problem.
- Competition is too fierce: A little competition is a good thing—if no one else is doing what you’re doing, you might be a trailblazer, but you also might be crazy. On the other hand, a crowded marketplace means it will be tougher and tougher to draw distinctions between what you offer and what other businesses do.
- Success is limited to one specific area: Do you offer a range of products or services, only one of which is actually selling? You’ve clearly found something that resonates, but you’re wasting time and resources marketing it alongside deliverables that don’t deliver.
- The thrill is gone: If you’re going to run a small business, passion for the idea is an absolute must. Losing motivation is a real issue that typically comes from pursuing a concept that you weren’t all that crazy about to begin with. A pivot to a different strategy that involves talking to new clients, using new tools, and tackling new issues can be the solution.
When issues like these are present, it can be tempting to shutter the company altogether rather than endure more losses. The difference between choosing to pivot and choosing to quit comes down to a simple question: Do you have a way forward utilizing what you’ve already learned? If you can identify what direction to pivot in, it will be a better use of your time and resources than starting from scratch.
Identify what direction to pivot in
To pivot means to leave one foot in place while you swing the other in a different direction. That means you’ve found something that works, and something that doesn’t. The trick is identifying which direction to turn so the foot you’ve kept in place is used more effectively.
There are three major ways that a company can pivot:
- Segment pivot: Taking your existing product or service and presenting it to a different set of customers. This pivot takes place mostly in the marketing and prioritization of features of your deliverables. Perhaps this idea is better suited for the B2B market than B2C, for example.
- Customer problem pivot: Finding a different product or service to present to the same set of customers you’ve been developing. If you find that the customers you’ve been trying to sell to have a different problem that your idea doesn’t address, pivot what you have in a way that does address it.
- Feature pivot: Taking one feature from your product and pivoting the company to focus on marketing and selling that. If you find one aspect of your business is the star and the rest of the product only serves to obscure access to it, you’ve identified one feature you can zoom in and make into a new, simplified business.
As you can see, in each example the business has found a way to combine what they’ve already learned with what could still yet work. Identifying your pivot is difficult, but doing so prevents you from making ill-advised leaps—or, even worse, sticking with what isn’t working just to avoid discomfort.
Collect feedback from your team and customers
Now that you’ve decided that a pivot is necessary and what that pivot will look like, it’s time to start looking for outside perspectives on the matter.
As noted above, a major consideration when deciding to pivot is whether you can still market yourselves to the same customers, or bring your product to a different set of customers altogether.
That means you’ll need to perform market research via interviews, surveys, and polls on your website and social media. You can also review research from secondary sources such as market reports issued by the government or private organizations like Pew or Gartner. You’re looking to understand your customers (or potential customers), including what issues they have, where they would go if your product didn’t exist, and what their ideal buying process looks like.
It’s also essential to spend time surveying your team. Who is still passionate about your business now that you’re moving in a new direction? Who has thoughts about the efficacy of this pivot? Collecting feedback both anonymously and in one-on-one interviews will both provide validation about your pivot, and help you identify who may or may not be ready for the transition.
Rewrite your business plan and chart a new path
Your business plan is your blueprint to short- and long-term business success—but now you’ve hit a snag. That doesn’t mean your plan was a failure, but it does need to be altered to reflect new realities about your market, your product or service, or your marketing plan.
Go back to the drawing board to rewrite your business plan, drawing on what you’ve learned in your previous iteration to create one that will hopefully lead you in the right direction going forward.
Seek financing if possible
For the most part, small business loans are most affordable and available to businesses that have an established history of success. Your decision to pivot may be a costly one, but it may also disqualify you, in many lenders’ eyes, from receiving financing based on past performance.
That doesn’t mean you’re out of luck if you believe that a loan or other financing is the best way forward for you. Some pivots are small—a new line of products, or a new marketing strategy—and a bank or online lender may feel that your history demonstrates that you’re still likely to succeed with this new strategy. You may also find viable financing options in the form of SBA microloans or business credit cards.
Taking on a loan is a major decision that requires lots of planning, due diligence, and a firm belief that the money will net you a return on investment. Make sure that you do your research on what your pivot might bring you before you spring for a loan.
Continue to monitor your outcomes
Some companies go through many iterations until they find the kind of success they’re looking for. A single pivot may not be enough. Monitor and test what has changed after your pivot, and decide if you are still failing to resonate with your customers.
As Ries noted, too many businesses fold completely or “jump” to another idea, leaving behind the validated learning they’d accumulated from their previous iteration. Pivoting allows you to more carefully test and validate what has worked, and combine them with new ideas that you can also test and substantiate. Knowing when to pivot, as opposed to stay or fold, is the hardest part. You’ve identified what’s valuable: Now, the real work is about to begin.
Have you read?
# World’s Top 50 Universities For Psychology Degrees, 2019.
# World’s Top 50 Universities For Arts and Humanities Degrees, 2019.
# World’s Top 50 Universities For Education Degrees, 2019.
# World’s Top 50 Universities For Social Sciences Degrees, 2019.
Add CEOWORLD magazine to your Google News feed.
Follow CEOWORLD magazine headlines on: Google News, LinkedIn, Twitter, and Facebook.
Thank you for supporting our journalism. Subscribe here.
For media queries, please contact: email@example.com