A strategic change can boost your bottom line when times are tough.
Business pivots are bold, but so are you.
As an immigrant striving to succeed in a new country, you’re adaptive, resourceful, and brave—all qualities that make for a world-beating business owner.
The only question is: how do you face change?
In this article, we’ll introduce the fundamentals of a business pivot and explore the best strategies for your company to consider.
What Is a Business Pivot?
A business pivot is a tactical shift in product or audience.
More radical than ideation (or iteration), a true business pivot changes the way a company delivers value to its customer base.
For example, one company might decide to change its audience entirely, while another may turn a secondary feature into the marquee product itself.
Such evolutions are common in the history of small business.
At the turn of the 19th century, for example, the Wrigley Company started out selling soap.
To incentivize purchases, William Wrigley Jr.—the grandson of an English immigrant—included free baking powder samples to his customers.
Before long, baking powder became Wrigley’s most popular product, so he listened to the market and pivoted. While selling baking powder, Wrigley maintained his tradition of providing complimentary products to customers.
This time around, he gave them free sticks of chewing gum, which soon became Wrigley’s most famous product. Over a century later, Wrigley gum remains a household name.
More recently, this type of pivot occurred with Slack, now a popular instant messaging service for corporations.
At the time, Slack was an accidental discovery.
In fact, it was born as a simple chat feature inside of a computer game called “Glitch.” While the game ultimately failed, its designers saw potential in their communication tool.
The team pivoted, brought their service to market, and now boast over 20 million active users.
Or even Apple, who used to sell desktop computers—only desktop computers.
Now, smartphones are their main source of revenue, alongside headphones, TV shows, and movies. They even have luxury VR headsets coming down the pike.
Benefits of a Business Pivot
As an entrepreneur, you’re always evaluating your opportunity cost.
While fully committed to X, you’re watching to see if Y might have more to offer.
Sometimes, however, it’s easy to get stuck at a crossroads.
That’s where a business pivot can provide the fresh perspective you need.
With the right strategy, a business pivot can help you:
- Expand revenue.
- Increase cash flow.
- Satisfy changing customer demand.
- Boost relevance.
- Seize new opportunities.
- Streamline operations.
- Reduce overhead.
Perhaps most importantly, keeping an open mind and quick feet is the key to long-term success. With this mindset, your company can evolve when it needs to, remaining vital and sustainable.
As an immigrant, you’ve probably gone through many changes and faced hardships along the way. Doing the same with your company will come naturally to you.
That just leaves one question: when does it make sense to pursue a business pivot?
While individual circumstances vary, there are many situations that could merit a business pivot.
- Maybe the market isn’t responding enthusiastically to your product. It happens.
- Or, maybe you’ve learned that 90% of your profits come from just one of your products. Great!
- Maybe you have an amazing idea but lack the capital to build prototypes. That’s okay.
- Or, maybe you simply have a better idea for a startup and want a totally fresh start. Go for it!
The list goes on—when you feel it’s time for change, you know that you’re ready for it.
You owe it to yourself to be honest with yourself (and your team). If you can wrestle with the difficult questions, a more profitable path will become clear.
Factors to Keep in Mind
A business pivot is not a short-term change.
Also, it’s not intended to replace ongoing effort, tenacity, and patience.
Generally speaking, a business pivot is a response to market conditions, to your customer base, and to your own bottom line (or some combination of all three).
In most cases, it involves redefining a company at a cellular level—while entails significant change, that does not mean that it must necessarily involve raising large sums of capital.
In fact, it would be inadvisable to pursue a pivot that requires venture capital (VC) funding or several years of research and development prior to launch.
Unless you have large sums of private equity or VC backing, a reasonable small business pivot should be achievable in a matter of weeks.
For example, let’s say Javier runs a restaurant in town, and opens from 8AM – 10 PM every day.
While customers used to dine-in quite frequently, now only a few come through the door. At the same time, however, his takeout and delivery orders are up almost 250% year-over-year.
Mobile apps like DoorDash and UberEats have changed the game.
There’s another development: while the brunch menu used to be his most popular meal of the day, Javier’s dinner menu has fully taken its place.
An uptick in remote working has all but eliminated his breakfast revenue.
It’s time for a change.
After conducting a cost-benefit analysis, Javier decides to become a delivery-only restaurant.
He moves locations and rents a building with a big kitchen, at half the cost of his restaurant.
Then, he eliminates his brunch menu and exclusively serves dinner, available for order on mobile apps between 4PM – 10 PM.
With this strategic business pivot, Javier reduces his overhead and increases his profitability in one fell swoop.
Prior to the Pivot: A Word of Advice
In the example above, Javier pursued fairly unilateral action with his business pivot.
While that seemed to work well for his business, other entrepreneurs may require a more multilateral approach.
As a general rule, be sure to consult your partners, suppliers, vendors, and employees prior to conducting a business pivot.
In fact, you may even want to talk with your customers and get their feedback. Sending out email surveys can go a long way to enhancing your clarity.
Remember: you’re not just pivoting for yourself, you’re doing so to deliver more value to your target market.