Things aren’t going according to plan. That business plan you put together looked great, but now you’re headed for a big decision. Keep going? Close shop? Try something different or new? If you decide to go a new route, that’s a business pivot. So, how do you know when to pivot or how to pivot?
What is a business pivot?
A “Pivot” is usually associated with a startup business. A startup spends the first year or two testing the market, making adjustments, analyzing numbers, and finding the right path. Sometimes, that path is just wrong and the business needs to go in a new direction — the pivot.
This can happen with established businesses as well. When the market changes, technology changes, or new competitors show up, it might be time to pivot.
So, what is a pivot? When a business makes a significant and deliberate shift in its overall strategy, that is a pivot. You might go from making typewriters to computers to business services (IBM) or from making desktop computers to smartphones (Apple). Pivoting a business is a big decision. So, how do you know when it’s time to pivot?
Clear Signs You Need to Pivot
Grey hair and short tempers aside, there are some clear signs that your business might be ready for a pivot. Here are some clear signs you need to pivot:
- A Changing Market: A change in the market might be industrial — coal to solar. It might be the tastes of a new generation (think Millennials).
- Low Morale: Is your team showing signs of burnout or, worse, apathy? That may be a sign that you’re headed in the wrong direction and a pivot is in order.
- No More Raving Fans: Have your customers lost their enthusiasm for your products or services? This is more than Google or Yelp! ratings. This is about the passion your market once had for your business.
- Customers Just Don’t Get It: Do you know in your heart that you have a great product but your market just doesn’t get it? You might be spending too much time and money trying to demonstrate your value.
- The Support Nightmare: If you’re seeing products getting returned, customers churning, or your whole team having to focus on making your customers happy a second time (after initial purchase), then it might be time to look for a new path.
- Declining Profits: The most obvious sign — lack of profits or growth. Sometimes, the financials will show you, plain as day, that it’s time to make a change.
- New Technology: The market is shifting, or has shifted, to a new technology, and your company is left trying to do things the old way. If the change in technology is significant enough, it might call for a pivot.
Pivot or Persevere…or Quit?
When making the decision to pivot, persevere or quit, the first thing to do is analyze the foundation of your business. That includes your financial standing, your team, and your own drive to continue. If any of those are too vulnerable to keep going, then quitting might be the best option (but don’t make that decision without talking to an expert!).
If the business is still in good financial standing, you’re passionate about the business, and your team is with you, then the decision comes down to pivoting or persevering. We’ve covered the signs that it may be time to pivot. When might you persevere?
- You’re still a startup. Startups need time to really test the waters. Give it a year, or at least nine months, before you pivot. No need to panic.
- You haven’t tried everything. If you still have options with your current product line, your sales channels, or marketing plan, then give yourself a chance to try those.
- You haven’t given it the proper effort. Your gut will tell you if you’ve really given your all to the business. This takes some deep honesty and is tied to the question of your passion. If you’re passion for the business is strong and you’re not putting out the associated effort, then give the business a chance by stepping up.
Business Pivot Examples
What famous business started as an online dating app? YouTube! That’s right. YouTube started as an app where singles could upload their videos. They quickly saw the potential in hosting videos of all kinds, for all people.
Ever heard of that podcast finder app called Odeo? No? Maybe you know it better now at Twitter. The founders thought they were onto something until iTunes showed up in the podcast market.
As we mentioned above, probably the longest surviving example of a business that pivots is IBM, who went from typewriters to computers to business services. Today, they are leading the way in Artificial Intelligence.
Starbucks started off selling espresso makers and beans.
AirBnB started with a focus purely on convention goers, not the general consumer market.
Yelp! started out as a way to get recommendations from friends (sound familiar, Facebook?) rather than leaving reviews.
HP made scientific instruments and calculators.
Remember the Netflix DVD queue? Hey, some people still use it. And of course, that led to Blockbuster making the decision to quit.
Let’s Talk
If you’ve read this far, chances are you’re considering a pivot for your business. If that’s the case, you don’t have to make that decision alone. Set up a time to talk with one of our expert advisors. We’ll look over your financials and your strategic plan. We’ll help you make the right decision.
Schedule a free consultation or call our office at 888-297-3321.