Pivot! Just pivot! That’s what your being told if you’re having challenges running your SME. It’s another one of those words that actually had value once upon a time. Now, it’s so abused that’s it’s nothing more than a throwaway statement by individuals who want to sound like they’re offering intelligent advice, but really aren’t. Realistically, most businesses can’t pivot.
If we’re to be honest, most individuals have a heck of a time coming up with one idea that they can get excited enough about to take the plunge. That doesn’t mean it’s a good idea. It’s just an idea that they’re prepared to risk their time, energy and resources on to make happen. Even then the failure rate exceeds 50% in the first 3 years and upwards of 85% in 5 years.
So my point is pivot to what? It’s so hard to have one idea let alone coming up with a second one, especially when under duress. I say duress because you wouldn’t even be considering pivoting if everything is running along fine.
No, most often a pivot or rethink is a result of a failed idea, a competitive threat or 100 year storm such as Covid-19. So I say duress because in most cases your business is heading to the ground with the power on and you’re desperate. And when things get desperate, we need a fix and in a hurry. That usually means doing something, anything to generate revenue and stop the bleeding. Unfortunately, being stressed out is not necessarily the best time to make decisions.
The news is full of stories showcasing various companies that have reinvented themselves during Covid-19. But on closer inspection of the stories, I don’t think they’d qualify as pivots as much as a survival strategy.
It’s about survival
For example, how many clothing manufacturers converted their sewing rooms from producing apparel, to manufacturing medical masks? I’m pretty sure they’re not going to continue once the storm has passed. It’s a safe bet that most will return to fashion as soon as they can. This is not a pivot, it’s about survival.
The same can be said about distillers and micro brewers who started producing hand sanitizer. This is not a long term strategy. It’s about generating some short term cash flow by utilizing existing facilities and processes. Which at it’s core is distilling alcohol. It’s nothing more than a finger in the dyke. Once demand is satisfied, then what?
“Chances are their pivot is only a few degrees off of their original idea”
Alternatively, some businesses have got nowhere to turn. Take the hospitality industry for instance. They can’t just convert their hotels rooms into alternative use. To be sure restaurants can offer takeout or delivery, but that’s not a pivot. It’s just an extension or alternative to what they are already doing and sadly won’t cover their costs. Again, it’s a just matter of generating some cashflow and of survival.
Retail is another example. Making your offering available online because of a massive drop in walk-in traffic, certainly sounds easy. But it’s a lot more involved than most imagine. Such as setting up your website, getting and managing your inventory online and establishing your payment gateway. None of it is easy and it costs money. Money that most small businesses don’t have.
Let’s not forget all the time and energy required to promote and get visible once you are setup online. That of course assumes you have the necessary skills to begin with. Granted, you can try to learn these new skills, but that takes time. In the meanwhile, you still have rent and utilities to pay.
Yes, there are companies that have managed to pivot and have found success. That just tells me that their original idea probably may not have been as sustainable as they first thought. However, these companies appear to be sufficiently versed in their industry that they’ve managed to leverage their insights and skills to offer an alternative solution. Chances are their pivot is only a few degrees off of their original idea and not a wholesale change.
My Pivot
After 8 years of running my first company, The Sales Support Company, I realized that I was working way too hard and felt like I was treading water. Even though revenues were continually growing at a nice rate, it never translated into any significant profit.
The company provided retail sales services representing some of the world’s largest packaged goods companies. I had 150 employees working coast to coast at a time before the internet and cell phones. Because of that, communicating with regional supervisors always took place after hours, so the days were long. It finally got to the point where I was just tired of trying to make it work. I was putting in endless hours, getting no closer to my goals and not making any money.
I knew the industry still required our type of service. So, I set out to come up with alternative method to service these stores. Two key criteria were, that it had to be profitable and give me a better quality of life. So, my pivot was to take what we were doing “live and in person” and attempt to do it via telemarketing, which really hadn’t been done before.
In order to find out if this idea would fly, I created Marketing Resource Group and tested the concept over the next 18 months. This happened all the while still running my other company.
Since it was a new concept for the industry, it did require a lot of convincing clients to test it. Fortunately, one by one clients began to support the concept as we were able to deliver the promised results.
More importantly though, is that this pivot was actually fulfilling my first priority of being profitable. My second criteria of having a better quality of life would be up to me, but profits would go a long way to making that happen.
Once I could see the momentum growing for our service, I sold The Sales Support Company. Well actually, it was more like I gave it away, but that’s a story for another time.
My pivot worked so well, I kept The Marketing Resource Group for 17 years before selling it. At which point we were making over 300,000 calls a year in Canada and the US.
Advantages
The point of that story is that I got to test the concept while I still had my first company. Although I was extremely well versed in retail sales and service, I knew nothing about telemarketing.
So the test phase allowed me to learn, trial, and refine the concept on my schedule. Unlike typical telemarketing organization that is script driven, our service had to be adapted to creating long term relationships. That’s why having the luxury of testing and refining made this pivot possible. Doing it overnight would not have had the same results and most likely would have failed.
A couple of advantages that I had that increased my odds at pulling off a successful pivot were:
- I knew the industry and
- I had a solid relationship with existing pool of potential clients that I could leverage.
As I stated before, most sustainable pivots are only a few degrees off the original idea and not massive wholesale changes. If we’re to be honest, there are far more businesses that can’t pivot, than those that can.
Sometimes that pivot can mean throwing in the towel, cut your losses and live to fight another day.
You may also enjoy SBM #82 Starting Over
Get More LIFE Out of Your Business
You shouldn’t be the hardest working person in your company.
Many small business owners find that even after the struggling start-up years, they’re working too many hours and still managing every aspect of their businesses.
Greg Weatherdon has been there, done that. As an entrepreneur, he learned not only how to get a business to the point of running smoothly, but also how to reduce the number of hours he worked, delegate more responsibility to his employees, and take longer vacations while his business chugged along like a well-oiled machine. And now he is providing the secret to success.
Do you suffer from any of the following?
1. Business ownership isn’t living up to the dream.
2. Endless workdays.
3. You can’t find good people.
4. Profits are less than expected.
5. You can never take a vacation.
You’re not alone. But there is a solution. As Greg demonstrates, with some time and effort, you really can Get More Life Out Of Your Business.
