We’re pleased to provide you with insights like these from Boston Private. Boston Private is now an SVB company. Together we’re well positioned to offer you the service, understanding, guidance and solutions to help you discover opportunities and build wealth – now and in the future.
How to breathe new life into your business
"[My] core philosophy of continuous improvement: looking forward and not backward when making changes."
— Harlan Adler, President of Ranfac Corp.
When navigating disruption and determining when to pivot, some companies tend to focus on what they've done in the past and how they can make those ideas relevant in the future. However, when you're moving forward, it's important to think outside of the box and seek out new solutions. Pivoting is a tried and tested way for entrepreneurs to breathe new life into their business. In fact, for many businesses, it signals the beginning of a new, more profitable chapter and a natural evolution from one form of business to another. Therefore, instead of shutting down, many business owners will shift toward a new and more innovative strategy.
Picturing a pivot
When it comes to navigating disruption accompanying a pivot, some business owners find themselves unable to cope with the short-term losses that may come from a pivot. Nonetheless, is a pivot right for your business? Here are some examples of business pivots:
- A business owner determines that most of their products and services do not generate much revenue. They abandon the majority of their current offerings in favor of those that generate the lion's share of revenue
- A company switches its focus from one industry segment to another. For example, instead of offering services to professional services firms, it targets corporations
- Instead of giving away its proprietary research for free, a company offers users a subscription to its premium content
Is now the right time to pivot?
As with many things in life, a successful pivot depends on a host of factors, most notably the timing of such a move. Pivot too soon and your business may have trouble finding its footing. Pivot too late and the opportunity to establish a more stable business may prove elusive. Here are some questions to ask yourself as you consider if and when to pivot:
- Why is my business struggling? While this seem like a simple question to ask, your business may be experiencing struggles due to something common, like overpricing or your inability to quickly deliver products and services to customers. Therefore, before you make plans to pivot, study your business closely and ask whether minor tweaks in how you operate could prove as effective as a pivot.
- When head-to-head, do competitors win? If you find that your competitors are consistently winning a share of your customer's wallet, the inferiority of your product and services may make competing on a level playing field impossible. Pivoting could lessen the competitive pressures facing your business — especially if it allows your company to deliver its products and services in an innovative manner and for a competitive price.
- Is there sufficient demand? Too often, entrepreneurs are so eager to make their business plan a reality that they struggle to understand why customers don't do the same. In addition to lack of sales, there are often other clues as to why your business is underperforming. For example, if your business has yet to gain traction after a sustained effort to do so, pay close attention to what customers do and don't say about your products and services.
- Has your understanding of the marketplace improved? Despite researching the marketplace before launching, sometimes a business must operate for a period of time before a true picture emerges of customer behavior. For example, you might find that customers want different features and functionality than you originally envisioned. If you find yourself correcting your previous view of the marketplace in fundamental ways, that may be a sign that a pivot could prove beneficial.
If you decide to execute a pivot, you'll need a plan for navigating disruption — particularly any confusion that may arise on the customer end. While you may not need to provide an overly detailed explanation of why you've decided to pivot, you should make sure customers understand what's in it for them.