Is it Time for a Change?
The Covid-19 pandemic and the mandatory lockdown has been really tough for many companies and small businesses.
If you are not an essential service, your doors are locked, staff are home and bank account depleting.
One of South Africans best traits is their resilience and innovativeness. We have seen such amazing opportunities being created and implemented in a few short days, to try to help companies and small businesses survive.
What is a pivot?
A pivot occurs when a company shifts its business strategy to accommodate changes in its industry, customer preferences, or any other factor that impacts its bottom line. The Covid-19 pandemic is the perfect opportunity to assess your direct or indirect feedback into a change in your business model.
It’s essentially the process of a startup translating direct or indirect feedback into a change in its business model.
Not every company needs to have a drastic pivot and do a fundamental change to the entire company, some just need to strategically change focus to take advantage of a new opportunity.
Some companies may not have the resources to pull off a major pivot, and in many cases, a company only needs to change one element which will make a big change to a problem that needs to be addressed.
A pivot could be anything from changing how a product is manufactured to shifting marketing efforts to appeal to new buyer personas. The term is relatively fluid, but it always entails a change in your business strategy.
When, why and how to pivot a company
1. Find that one feature or service that can be the opportunity
Sometimes, a single feature of your product, service, or business model will perform considerably better than the others around it. If that’s the case for your company, explore the possibility of pivoting to support that single aspect exclusively. Your goal is to be as efficient as you can be — to work smarter and get the best possible returns for your effort.
Trimming as much fat from your business operations is one of the best ways to streamline production and, in turn, extract more value out of the time and capital you invest in your company. If you can identify a single feature of your product or service that your customers enjoy or leverage more than others, consider pivoting and building around it.
2. The business isn’t financially viable
Founders of companies often have sentimental stakes in their businesses. Founding a business is a matter of having both a new idea and the motivation to see to it that it’s realized. That makes that pursuit inherently personal.
Despite what it might mean to you personally, a business can only go so far as its capital lets it. If your company is running out of money, you’ll need to jump ship from the idea or processes behind it and pivot to something more financially viable.
Take an honest, objective look at your business — without accommodation or emotion — and see where you could be doing better. See what you can strip back, which aspects are burdening you financially, and where you might be able to go with the resources you have on hand. Use that information to identify a reference point for your pivot.
Don’t be afraid to ask for outside feedback and advice and also be open minded to changing something that you would normally hang on to as it was part of the fundamental offering in the beginning. It is not personal; it is just good business.
3. The market didn’t respond the way you wanted them to
The prospect of getting your product or service to market is exciting. It’s a moment of truth, but you always have to account for the fact that the truth might hurt. Maybe, People won’t be moved by your messaging. Maybe, you’ll overestimate the scale of the problem your product or service addresses. Or maybe, your target audience just won’t be willing to pay what you’re charging.
Any case where your product or service doesn’t resonate with consumers like you thought it would is cause for a pivot. One way or another, you have to change your business model to convey better value to your target audience.
Take strides to generate interest in your solution. That could mean lowering your price, focusing on further developing certain features, or changing your target market. Ultimately, you have to make consumers see your business in a new light.
Many companies are seeing the benefits of staff working from home, having online meetings and not insisting on needing to be face to face all day every day. Exploring aspects on how you run your business and what you offer can radically improve your bottom line.
4. Your Competition constantly kicks your butt
This is a dog eat dog world. You’re always going to be pitted against some kind of competition. If other companies are absolutely dominating your space — taking up business you need or confining you to a niche you’re unhappy with — it’s probably time for a pivot.
Your industry might be crowded. There could be too many companies in it to claim a significant enough portion of the market. Or, a single company could have a definitive grasp on your target audience. In both of these cases, you’ll need to differentiate yourself. That means pivoting.
In this case, your pivot is going to be drastic. You’ll need to radically alter your company and how it operates. You might have to change your product or service, cater your messaging to a new audience, or completely alter your sales strategy.
Pivoting to challenge your competition is a matter of becoming different — different from your competitors and different from your business as you know it.
Too many businesses don’t have original concepts or messaging, so they keep being the follower and not the innovator.
5. You are bored and are looking for something new
Say your business has been operating for a while now, and you’re becoming unhappy with the trajectory your business is on. Your perspective and goals might have shifted. You might have developed new values as your business has grown. Maybe, a lucrative niche you could appeal to might be emerging.
In any of those cases, some kind of pivot is a viable option. But be careful — this particular reason for pivoting is the trickiest to navigate. If your business is doing well, it could be risky to make a radical shift. Still, as a business owner, it’s up to you to decide how your company operates. Do what you feel is right — whether that be a matter of your vision, morals, finances, or all three.
Pivoting your business isn’t a decision to take lightly. No matter what you choose to do, it’s going to take considerable effort on your end. It’s a tough call to make. It means being honest with yourself and any employees you might have about how you do business.
Pivoting is a humbling process. It’s a matter of swallowing your pride, understanding where your business is heading, and deciding on a potentially drastic course of action. Still, if your business is radically underperforming or flat-out dead in the water, some kind of pivot is the way to go.
Alternative Finance Solutions is a proud member of the Preference Capital Group and sole owner of BizCash, a business finance company.
Contact them here:
Bizcash: 0861 93 93 93