A business model determines how that business operates. Business management, infrastructure, supply procurement, production, sales and other aspects or running a business are included in the business model.
Ideally, your business model should be flexible. This is as your business goals, the market, consumer behavior and other factors can affect your business model. If you find that your existing business model isn’t bringing in adequate ROI, then it may be time to pivot your business.
Here is everything you should know about pivoting your business.
What Is Business Pivoting?
When you pivot your business, you change the direction the business is facing. This change can be drastic, such as a business switching to a different industry altogether. However, it can also be a change related to business management, products, or other factors.
Most businesses will need to pivot at some point. This happens as over time, what consumers want changes. Add to this new developments in technology, and the need for a growth oriented mindset becomes important for business owners. You may find that what you’re selling today is not selling, or even obsolete within the next decade.
When this happens, you can pivot your business as a way to rebuild your business and bring in the profits. There are various reasons behind why a business would choose to pivot. Some of the more common reasons are lack of sales, more expenses than profits, not being able to position a product, and more.
How Do You Pivot Your Business?
Before you can pivot your business, you should consider looking into why your current business model has to be changed. By analysing what isn’t working for your business, you can isolate what you need to change. To pivot your business, you can consider the following steps:
1. Market Analysis
Pivoting your business should ideally help your business perform better at the marketplace. To ensure that this happens, market analysis is crucial. During your business analysis, you’ll be gathering data in your industry as a whole. Then, the data is analysed to answer questions related to your industry.
This knowledge can better enable you to understand what kind of business models are succeeding in the marketplace. If certain kinds of products are more popular, then you can consider adding that to your catalogue as well.
2. Look Through Your Business’ History
Chances are that there are parts of your business model that you can carry forward as well. Instead of throwing away the whole model, why not look at what worked and what didn’t. If certain business strategies and ideas didn’t work, you’ll know what to avoid in the future.
Those parts of your business model that can be adopted to your business even after you pivot can help build a smooth transition between your old and new business models.
3. Understand the Customers
If you want your business to succeed then focusing on your customers can be they key. Even after you pivot your business, you’ll still need to make your customers aware about the changes to your business. Should any of these changes directly affect the customer, they should be made aware of it ahead of time. This could include higher prices, a shift to online sales, and more.
You can also use data gathered from your customers to build a better business model. You can do this by looking through the pain points and issues that customers face with your business, as well as your industry. You can even take advantage of the situation by offering products and services that your competition doesn’t offer, making you stand out in your industry.
4. Create a Marketing Campaign
Once you’ve decided on how you want to update your business, you’ll need to create a marketing campaign as well. A targeted marketing campaign can enable you to make your existing customers aware about any changes to your business or your brand.
Your marketing campaign should ideally highlight the biggest changes you made while pivoting your business. You can achieve this by changing your brand design, using new brand colors, a new logo, and more.
Conclusion
Businesses may eventually need to pivot, both large and small businesses. Pivoting is necessary in order to stay up to date with market and consumer demands, and promote a growth oriented outlook for your business. It’s also a way to protect your business against potential closure.
You can also protect your business by investing in business insurance. When you get business insurance, you can get financial coverage against various scenarios that. Could negatively affect your business. Learn more about business insurance and how insurance can help you protect your business.