You may have heard many times about the need to pivot your business during tough times. But what does it actually mean?
Pivoting is one of the strategies to deal with change in a business or a change in market conditions. In other words, adapting or changing your business model.
When playing netball or basketball, one move is to turn on one foot to create space for yourself, to make your next move. It’s similar in business. This isn’t about jumping to a completely different business but about adapting the one you already have.
Your values will be unchanged but your product/service or your route to market may need to alter.
Business pivots in action
- Start by assessing all your current assets. What do you sell and what do you do well?
- Consider what happens when you change something. Brainstorm some wild ideas and then narrow them down to the viable ones.
In response to the coronavirus crisis, for example:
Brewers had licences to produce alcohol, so they could quickly pivot to producing alcohol-based hand sanitisers.
Restaurants had hungry customers so they had to change the way they served the food to them, i.e. in the form of delivery or collection services rather than at a table. The underlying product (the meal) was the same, but the route to market was changed.
- What do you need to do in order to change?
Brewers had to adapt existing equipment and change their packaging.
Restaurants had to adopt software for taking remote orders and payments. Shops moving online needed to build websites that functioned as catalogues.
Look to the future
- Decide whether this new model is short-term or long-term and invest accordingly. Whether you are pivoting as a short term survival strategy, or a longer term investment, will dictate how much cash you invest in the change. This is exactly where government-backed Coronavirus Business Interruption Scheme (CBILS) and Bounce Back Loan Scheme (BBLS) lending is designed to help.
Brewers will (hopefully) return to brewing once conditions ease, but many restaurants may still run their takeaway/collection alternatives alongside their eat-in service, if their kitchens are big enough to sustain the increased business.
- Invest in changing the underlying systems and also in marketing your new product or service.
- Invest in streamlining your existing business, too. If business is quieter, then now might be a good time to introduce new systems, to train your team or consolidate multiple sites.