I was talking with an online business friend yesterday. She was starting a new venture because her business had all but dried up. Sound familiar?
If you are like a wide variety of online businesspeople right now, you’ve seen a tremendous slowdown in your income. It doesn’t seem to matter what industry you are in. The far-reaching impact of this phenomenon has stalled or completely taken down numerous small businesses.
My friend’s answer was to do a business pivot. I’ve done this several times during my career, too. In her case, switch the primary focus of her company from writing articles and white papers to providing a physical product to an entirely different audience.
Maybe a business pivot is the right answer, maybe not.
I’ve been through total business pivots before so I can absolutely testify that, under the proper circumstances, they can work successfully. But then there are cases where going through an entire business pivot is not necessary.
Let’s take a look at:
The Definition of a Business Pivot
The phrase “business pivot” has been around for decades, but we saw it come booming to the forefront during the pandemic years.
The basic definition of a business pivot is changing the direction your business is going now due to something causing a tremendous drag on sales/revenue.
Your situation might not be related to the aftermath of COVID-19. It could be because of economic instability, changes in your marketplace, new technology or many other factors.
For example, with so many brick-and-mortar businesses on the brink of closing because of the pandemic, they had two choices.
- Go out of business.
- Pivot and find a way to operate under the new conditions.
According to the University of Alabama:
- The medical industry had to move fast and pivot hard to keep up with everything that was going on. This led to telemedicine becoming a mainstream offering to patients.
- Educators had to find a new way to instruct their students in safety. While virtual classrooms had existed at a small number of institutions, they also burst forward to become commonplace. Just about every grade level at every school had virtual capabilities.
- Businesses embraced remote employees.
- Restaurants turned to deliveries via independent companies or professionals.
For you, it might look like either completely changing what your business is/does or adding/removing products and services that are no longer profitable.
The definition of “business pivot” also can mean a change of direction with pricing, your target audience or other elements of your company.
What my friend did is one example. Here are a few others:
1. Products/Services Pivot – A copywriter who currently writes for websites might consider selling done-for-you templates for things she doesn’t write for such as blog posts, video scripts, etc. or training products.
2. Pricing Pivot - Someone who sells premium digital or physical products that never go on sale might offer temporary discounts. (I’ve seen a LOT of this lately.)
3. Target Audience Pivot – Perhaps you typically connect and sell to blogging newbies. If they aren’t responding to you any longer, you might try a pivot to a different customer profile, such as intermediate bloggers or even niching down to only accommodate bloggers who are also affiliate marketers.
4. Location Pivot – Online this might look like taking your Etsy products and moving them to Teachers Pay Teachers, eBay, or Amazon. Offline it might mean moving from a mall to your own building, moving to a new area of town or branching out to add new locations in different towns.
Pros and Cons of Business Pivots
Depending on the type of pivot, you want to try, it may not be difficult to accomplish. Adding a new service or a simple product is a good example. If the new additions work, you’ve increased your revenue, and customer base with only a little work.
Most pivots will introduce you to a new audience, and one form or fashion. So, making changes, either simple or expensive, can almost always build your customer base.
Certain pivots (such as distribution channels, supply chain, logistics, process, etc.) Can speed up your work and/or make it simpler, which in turn, may reduce costs and increase revenue.
But, when it comes to pivoting, there is also a risk. But then again, isn’t there risk in everything we do as businessowners?
It could be that pivoting doesn’t improve your situation by much or at all. In that case, you would have wasted a lot of time with little or no reward.
There’s also the chance that the market will turn again and your existing audience/business/situation will work itself out.
Things to Consider Before a Pivot
Ask yourself these questions:
In my opinion, if your situation has been going on for a while, and nothing has changed, it may be time to consider a pivot in one form or another. Better to test some new ideas than wait until things get critical.
Have questions about a business pivot? Talk to me below!
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