How To Pivot In Your SME

Even though pivoting can revitalize a struggling business, it also means letting go of previous investments. This courageous decision can be a significant emotional and practical conflict for business owners. In the early stages, the primary goal is often to attract as many customers as possible and figure out how to monetize that base. However, this approach isn't always sustainable, and businesses may eventually find themselves in a slump, necessitating a reevaluation. If you're contemplating a turnaround, here are some considerations before making your move.

What Does It Mean ‘To Pivot’?
Pivoting involves recognizing that your current products or services aren't meeting market needs and making a substantial change in direction. The primary aim of a pivot is to increase profitability or ensure the business remains viable, which requires a shift in mindset, product offerings, and positioning. The way you pivot can significantly impact your success.

When Is It Time to Change Direction?
There's no universal answer for when to pivot; this decision must be made carefully and only when necessary. Signs it might be time to pivot include spending significant time and resources without seeing progress, facing excessive competition, experiencing stagnated growth, or realizing that customers aren’t responding positively to your offerings. In these cases, a pivot can help align your business more closely with customer needs, boost sales, or adapt to industry changes.

Focus on Core Aspects of the Business
Identifying a key feature of your business can guide a successful pivot. Rather than overwhelming customers and staff with multiple changes at once, adopt a "less is more" philosophy. Concentrate on one core aspect that can pivot in relation to the rest of your business.

Choose Realistic Goals for Your Business
When changing your business model, establish new goals that align with your new direction. Set specific targets for sales and customer growth that reflect your new positioning, rather than comparing them to your original goals, which may not accurately represent your current situation.

Understand Your Customer Well
If your products aren’t selling, the issue may not be with the goods themselves but rather with your target audience. For instance, a customer-focused service may be better suited for B2B rather than B2C markets. By pivoting your offerings to sell directly to businesses, you could enhance sales without altering your products. This change would require a shift in your business plan and target demographic.

Survey the Competition
Analyze what your main competitors are doing and identify ways to improve upon their strategies before implementing significant changes. If you plan to offer similar products or services at comparable prices, you may struggle to differentiate yourself. Understand your competitors’ strengths, market size, and what it takes to compete effectively, which will inform your pivot decisions.

Plan Your Moves Before You Act
Numerous approaches exist for changing your business direction. However, ensure that your entire team is aligned and supportive of the planned changes before proceeding. Testing your pivot and developing a comprehensive strategy that integrates all core aspects of your business is essential before implementation.

The Bottom Line
Starting and growing a small business comes with challenges, but when long-term financial stability is threatened, a pivot may be necessary. The most successful businesses adapt alongside their customers and market conditions, finding ways to remain relevant and profitable. If you're looking to fund your pivot strategy within the next 48 hours, contact Merchant Capital today.