The following text was take from our eBook: 5 Steps to Drive Business Growth and Recovery to Fuel Your Dreams.
Pivoting isn’t a new concept. Some of the most profitable and recognizable businesses in the country changed paths midstream before they truly became successful.
A classic example is Starbucks. The company didn’t start out as a franchiser of coffee shops. Initially, it sold coffee makers, bulk coffee beans and other items before shifting to its current model of coffee houses with a sense of community, like those in Italy and other European countries. Now it seems as if Starbucks has a coffee shop at every busy intersection in the country — and a loyal following of coffee aficionados.
Each situation is different as well as the sense of urgency and uncertainty varies for businesses experiencing challenges or a stunt in growth. In situations like millions of businesses have experienced in 2020, pivoting is one strategy to consider.
6 Tips for a Successful Pivot Strategy
Pivoting requires a transition period, especially if you’re shifting to a new product line or paradigm. It’s not as easy as snapping your fingers and announcing a change of plans. Here are six practical suggestions to smooth out the rough edges.
Let your customers know that you’re still there to serve them as you always have with expanded opportunities. Share new products and services on your website. If customers don’t know what you’re selling, they won’t be buying. Expand the reach of your social media accounts.
2. Adapt to meet new demands and needs.
Be creative about serving your customers. Can you offer new services that would be attractive to your buyers that would make you stand out from your competition? If a car dealership can drive a new vehicle to a buyer’s residence, can you do the same for your products? Can you use teleconferencing, or utilize demos to walk a client through the steps of a purchase? A small change can not only help you meet your clients’ need, but can also preserve resources such as transportation and travel cost when cash flow is low
3. Think ahead.
If demand for your product or service is low currently, you may be able to encourage your clients to purchase later. For example, if you own a retail outlet that’s had to close its doors, you might offer gift cards for future purchases at discounted rates. When restrictions in your area have been lifted, customers can cash in. In the meantime, you’ve boosted current cash flow. If you own a service business, would your clients be willing to schedule for services or appointments at a later date or sign a contract?
4. Learn a new skill.
Faced with necessity, owners may delve into areas they previously hadn’t touched. For instance, you could become adept at scheduling pick-ups through software. Or maybe ask employees to take on administrative work that had previously been delegated to others to reduce your staff.
5. Inform your employees.
Workers appreciate honesty. So, inform them as soon as possible if layoffs are coming, benefits are being scaled back or bonuses won’t be paid this year. These challenging times present an opportunity to build long-term loyalty among your workers.
6. Monitor your pivot strategy regularly.
Don’t rely on gut instinct or quarterly financial statements to monitor your company’s performance. Timely, accurate financial reporting is key during volatile market conditions. Consider producing daily or weekly “flash” reports that highlight what’s working and what’s not — and then take corrective measures. For example, you might need to adjust your pricing, staffing or hours of operation to improve profitability.
Which metrics should be included in your company’s flash report? Keep a close watch on revenue, payroll costs, and sources (and uses) of cash.