Tips on Pivoting a Business and Finding Profitability
Pivoting necessitates extensive planning and execution. You should learn what pivoting is, when it is appropriate for your firm to pivot, and how to execute a successful pivot.
There’s a lot more to pivoting than most aspiring entrepreneurs realize. Still, it’s widely agreed that startups should only pivot when necessary and that it should be done with great care and consideration.
Because there are so many elements to consider before going on a pivot, let’s look at what pivoting is and how to execute it well.
What is pivoting?
While pivoting in the startup sector entails switching to a new strategy, it is frequently misunderstood to overhaul the company completely. However, this isn’t always the case. Often, a company only has one big problem to solve, and only one aspect of the company needs to be changed. Here are a few examples of pivoting that you might not have thought of as “pivots”:
- A pivot occurs when one product is changed into a feature of a broader suite of features as part of another product, which is the opposite of the prior point.
- Placing a company in a new market or sector can help it focus on a different set of clients. Changing a platform, such as from an app to software or the other way around.
- To improve monetization, a new revenue model is being used. For example, a business may discover that an ad-based revenue model is more profitable than a freemium model.
- Using many technologies to construct a product usually reduces production costs or provides a more reliable product.
When to pivot?
Your business is always catching up.
If your business isn’t progressing quickly despite your efforts, you may need to pivot. In addition, you may need to pivot your business, revenue model, product, or market, even if the firm does not need to pivot.
There is an Excessive Amount of Competition
Your idea may appear to be unique and original at first. Still, there’s always the possibility that a larger firm with more resources, finance, and a built-in audience may come along and build a product that’s identical to yours, only better. Because you don’t have much choice in this case, your startup would be better served by doing something completely different.
Your company has reached a stalemate.
If you find slow (or no) progress in the development of your company, it’s probably reached a halt. This could be due to boredom, a disgruntled team, or an ineffective plan, but a pivot should be considered whatever the reason. Take an honest, objective look at your firm and identify something that may be improved. It doesn’t have to be a massive pivot.
There is only one thing that gets the most traction.
Suppose only one component of your business is thriving while the others are failing or moving slowly. Your organization may concentrate on what’s working while changing, possibly significantly, or altogether abandoning what isn’t. Your organization can experience a gain in productivity, efficiency, and revenue by focusing on what works, depending on the strategy you use.
Your marketplace isn’t responding well.
You can perform all the customer development and research you want, but just because someone says they’d pay X amount for your offering doesn’t imply they’ll still buy it six months later when you’ve produced and released your product or service. Lukewarm reception to an offering’s first release isn’t usually a good sign, and while marketing and PR might help, there’s only so much you can do to persuade the world of its worth.
Tips on pivoting a business
Adapt to Your Current Business Situation
Any adjustments to your business plan should be a natural extension of your current skills. If you were successful before the crisis, stick to your core business with a few adjustments. First, find out what your customer-facing teams hear from customers by talking to them. Next, examine the market to see if other businesses are providing similar services to yours. Maybe it’s time to stand out or carve out a new niche.
Within the New Reality, pivot
Market research should also entail a thorough assessment of current global market trends. The COVID-19 situation, for example, caused Zoom to convert from a B2B to a B2C company swiftly. Whereas many other companies might have expected the shutdowns would be finished by summer, Zoom was handy enough to grab all of the consumers that needed help right away. The epidemic has revealed new supply chain difficulties, consumer purchasing habits that influence B2B purchasing habits, and more.
Develop a prototype or small beta programme of your new idea and measure its success instead of overhauling the entire firm at once. Changing too many things at once makes it more challenging to keep track of what is and isn’t functioning. A committed fan base can also accept minor modifications over time rather than a complete overhaul.
Utilize technology and outsource
Investing in technology or outsourcing can help ensure the success of the improvements. Virtual meetings and events, a CRM system, or an automated marketing platform may require your internal departments, such as sales and marketing. If too many accounts are written off as bad debt, your accounts receivable staff can help bring in revenue by implementing a robust A/R management policy or outsourcing accounts receivable. Your pivot acquires more resources to make the adjustments as seamless as feasible by polishing your internal processes.
Employees Should Be Trained
Any significant modifications to your business strategy should be discussed with your personnel, especially those on the front lines. They must be well prepared to answer any queries or clarify any misunderstandings. In addition, your customers will want to know what’s going on, so they don’t worry about losing any products or services you’re currently providing.
Continue to pay attention to your consumers, workers, and the market. If you pay attention, minor adjustments might lead to more significant ones. Maintain an optimistic attitude and take a step ahead.