Thursday 14th of August 2014
Pivoting became a widespread phenomenon in the commercial world after the pandemic. Several busin
...esses had to make a paradigm shift in their standa...
Pivoting became a widespread phenomenon in the commercial world after the pandemic. Several businesses had to make a paradigm shift in their standard working procedures to match the changing needs of the market and customers. However, moving from one way of working to another takes appropriate planning and effective execution. Also, changing the course of action can create upheavals and this is the reason why pivoting in the right way is vital.
Thus, individuals looking for a business for sale in New Zealand must ensure that they have the knowledge of pivoting successfully. Although it is essential to survive challenging circumstances and secure the future of the company, pivoting should be executed carefully because of the risk factors. Thus, here is how you can pivot without creating chaos and disarray in the system.
What Does Pivoting Mean for Businesses?
Pivoting is changing the way the business functions due to the changing circumstances. It can sometimes involve a complete overhaul of the business model and, at other times, a slight change in one of the elements like marketing or distribution. For example, many restaurants started delivering food through online ordering systems during the pandemic, which was a simple shift in the working mechanism to maintain their income.
An example of a fundamental change in the business model is Netflix, which began as a DVD by mail service. However, when DVDs became obsolete because of the penetration of the internet and streaming of videos, Netflix pivoted and became a streaming service. Currently, it has over 221.6 million subscribers across the globe. Thus, pivoting can bring exceptional success if it is planned and is a necessity for the industry.
When Pivoting Makes Sense for A Business?
Pivoting should not be adopted to emulate others or as a part of a herd mentality. The business owner needs to determine whether it is required or not. It is usually recommended when the current mode of operation is not working for the business and may lead to failure. They can try other measures before thinking about pivoting, like cost-cutting and diversification, because pivoting requires a lot of capital, training, equipment, resources, etc.
For example, IBM started with the manufacturing of computer hardware and later started offering IT consulting services because of stiff competition in the production domain. Today, they are foraying into robotics and artificial intelligence, making them one of the biggest research companies with operations in 171 countries.
How Can Businesses Pivot Successfully?
When the business owner has decided to pivot, they need to follow the steps mentioned below to transform their venture into a profit-making company.
The first step while pivoting is to understand the needs of the target market and analyse the external and internal conditions. Getting feedback from customers and your own employees about the decision to pivot will help you realise the feasibility of your proposed plan. Market research will also allow you to know what is that your customers want and how you can provide it to them. Assessing competitors must be a part of this research to identify the best strategies and weak points of your rivals.
Pivoting does not mean that you must forget everything you did earlier. Find out the things that worked for you in the past and continue to use them with a little tweaking. If you go from A to Z overnight, there are chances that the new offering may not get the desired response. Thus, it is essential to align the changes with the core product or idea of the business. For example, do not become a florist from a restaurant overnight because the customers will not trust your products. Thus, maintain the niche and innovate in the same domain.
When the business takes a new direction that involves new methods and policies, you must first establish goals that are specific, measurable, actionable, realistic and timely. Also, these must be in alignment with the vision of the company to present the makeover as a better version of the existing offerings. The new goals should focus on the sales targets and promotional activities that will help achieve them.
With the new set of objectives, the business owner needs to make amendments to the existing business plan. It must define what is going to change in the company, how the transition will take place, what will be the result and who will be responsible for it. It will also involve allocating the budget to the transformation process and setting a timeline. If the business requires funding for the accomplishment of its new objectives, the accountant must make sure that all financial commitments are verified in the financial plan.
While you are undergoing the transition, it is vital to understand that you need to communicate about it to your employees, stakeholders, suppliers and customers. The employees will be executing the transition, so they will have to be trained in the new processes and need to align their KPIs with the new business objectives. Also, you will have to inform the suppliers about the changes in the stock and if you will need different materials. Make sure that the stakeholders are on the same page so that there is no dispute.
Your customers cannot be kept in the dark either. The support team must start emailing and calling the loyal customers and the potential buyers must be communicated the changes through promotional campaigns.
Use the newly acquired skills and technology to make a smooth transition. However, do not consider the pivot a success unless you start measuring the performance of the business after resetting the system. Assess the increase in the number of sales, website traffic, revenue, customer acquisition, brand awareness and loyalty.
Also, it may take some time for the staff and customers to adjust to the new processes. Thus, do not get disheartened if you struggle or face teething problems in the beginning. Make sure that you stick to the plan and work towards achieving your goals without getting distracted.
Conclusion
Whether you are a seasoned entrepreneur or plan to purchase a business for sale in New Zealand, you must be aware of the right way to pivot to ensure success. However, you must remember that pivoting should be adopted when the business needs to reinvent to stay afloat.
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