You might decide to lead your small business in a new direction because you spot big opportunities on the horizon. Or perhaps, if your business is having a tough time generating or sustaining enough revenue to stay open, pursuing a new direction may be a matter of survival. The business term “pivot” means to change direction and pursue new business goals while taking advantage of everything you’ve already learned as a small business owner or manager.
What is Pivoting?
Consider the following aspects of your business. These are places where you may find that you need or want to make substantial changes and head in new directions toward new goals. You may decide to pivot in one or more of these areas:
- Operations: The way you run your business on a day-to-day business
- Revenue: Where your income comes from; for instance, you might switch from a retail to a subscription model
- Resources: Perhaps it’s time to change vendors or rethink the materials you use for fabrication of your products
- Customer acquisition: Reaching out to a new target audience or changing your marketing and advertising strategies might be of value
- Costs: Budget cutting and realignment of spending priorities can cause you to pivot
- Partnerships: Whenever you ally with new strategic partners, you can expect to experience some degree of pivot.
What Factors Might Lead Your Company to Pivot?
Let’s say you sell educational materials that focus on finances with a target market of customers in their 20s, but your company is experiencing low sales volume. Pivoting your target audience, perhaps to customers in their 50s, might result in a significant boost in sales with only small tweaks to the actual product needed. Or perhaps you need to make a bigger change, from a retail sales to a subscription model.
Real-world examples of successful pivots are easy to come by. For example, Groupon, the coupon and local deal website, began as an activist website dedicated to helping groups of people connect around shared goals. Within a year of its founding, Groupon had pivoted drastically, changing its name and beginning its extremely successful life as a company devoted to helping local businesses advertise themselves through offering short-term deals.
Whether you’re pivoting to expand your business or to find a path to survival and success, it’s important to acknowledge to yourself, your partners, and your co-workers that you’re abandoning much of the time and effort you’ve spent going in a different direction. Making smart decisions and choosing the right tools are vital when you’re running a business. 4.3 million customers use QuickBooks. Join them today to help your business thrive for free.