When you’re considering making a big change for your business, you might be thinking, “Is it time to pivot?” Businesses have made pivots in good times and bad, but the most successful had a strategy to guide the way.
What does it actually mean to pivot, how do you know if it’s right for your business, and what should be included in your pivot strategy? Could a pivot actually grow your business?
You’ll find the answers to those questions and more in this guide. Learn more about the changes you can make to better serve your customers and boost your business’s bottom line.
What does it mean for a business to pivot?
When a business pivots, it changes some aspects of its core products or services. Businesses may pivot to better meet customer demand, shift their target audience to boost sales, or a combination of both.
Making a pivot is a strategic move that you can take to ensure that your business remains viable and profitable. Typically, it’s done as a long-term strategy, unlike the changes businesses made for a short time during COVID-19-related shutdowns.
That said, it’s not always necessary for a business to pivot. Sometimes you’ll only need minor adjustments to reach your goals, and other instances may call for a full-out pivot.
What does a pivot strategy look like in action? Here’s an example: a sit-down restaurant changes its offerings to focus only on takeout. While this change may have started as a way to generate income when onsite business was limited, some restaurants might make it a permanent change.
What are the financial impacts of a pivot?
Ideally, a pivot will positively impact your business because the goal is to sustain or return to profitability as soon as possible.
A pivot isn’t necessarily the same as the short-term changes you may need to make to survive unexpected business interruptions. Pivoting requires additional time and money as you make a strategic shift from how your business has previously operated. Your business may need to change its inventory, rebrand and change its marketing materials, find new ways to deliver goods or services, and more.
Given this, your pivot strategy should account for financial fluctuations while building a more profitable foundation for long-term success.
How do you know if pivoting is right for your business?
First, ask yourself which changes you want to continue for another six to 12 months. If your current business is your dream, it may make sense to continue with short-term changes to get you through your current challenges. If you think your business model isn’t viable long-term, you’ll have to pivot.
Review your business plan and strategy and consider the following for your pivot strategy:
- Which products and services do your business offer, and are they still desirable and relevant for your customers?
- Can you modify your business short-term to generate sufficient income now, or are more significant, strategic changes needed for future profitability?
- Would your business be better positioned if you gave up a brick-and-mortar presence and only offered online sales and services?
- What kinds of staffing changes would you need to make to achieve profitability?
- Do you have the cash needed to make the necessary changes, and if not, how could you obtain it?
Talk to your accountant and any business advisors you have, like your business attorney and a mentor, and get their input. After reviewing your business against these questions, if you can’t see a clear path to profitability through “business as usual,” you’ll likely need to pivot to survive.
Common pivot strategies for small businesses
Remember that while the changes you make should be long-term, you don’t need to change everything about your business. You likely just need to find a few ways to adjust your products or services, operations, and marketing to make it work.
Here are some examples:
- Change how you offer products: If there’s still demand for your product, consider your delivery method. Restaurants can move to takeout-only; gyms can host outdoor fitness options or focus on online or personal training; retail stores can move online; and products can be offered as subscriptions.
- Refocus your target audience: Who will most likely need and use your offerings now? How has your customer base changed? For example, if your restaurant was designed for a lunch crowd that’s now working from home now, change your focus to another demographic or online orders and delivery.
- Be patient and flexible: Striking the right balance between the business you had before and the business you’ll have going forward may take some time. Be flexible and ask for feedback from customers and staff. This will help you get to the core of overcoming any challenges.
- Diversify your marketing and focus on inexpensive and effective digital channels: Make sure your website and social media channels reflect any changes from your pivot strategy. Use your digital channels to announce any exciting new products or services you’re offering. And be aware that you may need to update or change your marketing messages and information to adapt to new audiences.
- Talk to other small businesses for ideas and support: Your fellow business owners can be your best collaborators! Could you co-offer products and services to create more attractive packages for your pivoted business? For example, instead of stocking desserts for your restaurant’s takeout business, partner with a nearby bakery and offer specials together. You could provide dinner and dessert so that you piggyback on each other’s clientele and add a benefit to your customers.
- Find the right funder or funding opportunities to keep your business moving forward: Talk to your commercial banker about financing options to support your pivot strategy. Even if you don’t use any of the funding, having it available if needed can make all the difference in a successful pivot.
Talk to Pursuit: We can help
Whether you need funding to pivot your business or simply to ease cash flow until we move past the pandemic, contact us today.
With access to more than 15 loan programs and a range of additional services, we’re committed to helping your small business get stronger today and thrive tomorrow.