A strategic change can boost your bottom line when times are tough.
Business pivots are bold, but so are you.
As an immigrant striving to succeed in a new country, you’re adaptive, resourceful, and brave—all qualities that make for a world-beating business owner.
The only question is: how do you face change?
In this article, we’ll introduce the fundamentals of a business pivot and explore the best strategies for your company to consider.
What Is a Business Pivot?
A business pivot is a tactical shift in product or audience.
More radical than ideation (or iteration), a true business pivot changes the way a company delivers value to its customer base.
For example, one company might decide to change its audience entirely, while another may turn a secondary feature into the marquee product itself.
Such evolutions are common in the history of small business.
At the turn of the 19th century, for example, the Wrigley Company started out selling soap.
To incentivize purchases, William Wrigley Jr.—the grandson of an English immigrant—included free baking powder samples to his customers.
Before long, baking powder became Wrigley’s most popular product, so he listened to the market and pivoted. While selling baking powder, Wrigley maintained his tradition of providing complimentary products to customers.
This time around, he gave them free sticks of chewing gum, which soon became Wrigley’s most famous product. Over a century later, Wrigley gum remains a household name.
More recently, this type of pivot occurred with Slack, now a popular instant messaging service for corporations.
At the time, Slack was an accidental discovery.
In fact, it was born as a simple chat feature inside of a computer game called “Glitch.” While the game ultimately failed, its designers saw potential in their communication tool.
The team pivoted, brought their service to market, and now boast over 20 million active users.
Or even Apple, who used to sell desktop computers—only desktop computers.
Now, smartphones are their main source of revenue, alongside headphones, TV shows, and movies. They even have luxury VR headsets coming down the pike.
Benefits of a Business Pivot
As an entrepreneur, you’re always evaluating your opportunity cost.
While fully committed to X, you’re watching to see if Y might have more to offer.
Sometimes, however, it’s easy to get stuck at a crossroads.
That’s where a business pivot can provide the fresh perspective you need.
With the right strategy, a business pivot can help you:
- Expand revenue.
- Increase cash flow.
- Satisfy changing customer demand.
- Boost relevance.
- Seize new opportunities.
- Streamline operations.
- Reduce overhead.
Perhaps most importantly, keeping an open mind and quick feet is the key to long-term success. With this mindset, your company can evolve when it needs to, remaining vital and sustainable.
As an immigrant, you’ve probably gone through many changes and faced hardships along the way. Doing the same with your company will come naturally to you.
That just leaves one question: when does it make sense to pursue a business pivot?
While individual circumstances vary, there are many situations that could merit a business pivot.
- Maybe the market isn’t responding enthusiastically to your product. It happens.
- Or, maybe you’ve learned that 90% of your profits come from just one of your products. Great!
- Maybe you have an amazing idea but lack the capital to build prototypes. That’s okay.
- Or, maybe you simply have a better idea for a startup and want a totally fresh start. Go for it!
The list goes on—when you feel it’s time for change, you know that you’re ready for it.
You owe it to yourself to be honest with yourself (and your team). If you can wrestle with the difficult questions, a more profitable path will become clear.
Factors to Keep in Mind
A business pivot is not a short-term change.
Also, it’s not intended to replace ongoing effort, tenacity, and patience.
Generally speaking, a business pivot is a response to market conditions, to your customer base, and to your own bottom line (or some combination of all three).
In most cases, it involves redefining a company at a cellular level—while entails significant change, that does not mean that it must necessarily involve raising large sums of capital.
In fact, it would be inadvisable to pursue a pivot that requires venture capital (VC) funding or several years of research and development prior to launch.
Unless you have large sums of private equity or VC backing, a reasonable small business pivot should be achievable in a matter of weeks.
For example, let’s say Javier runs a restaurant in town, and opens from 8AM – 10 PM every day.
While customers used to dine-in quite frequently, now only a few come through the door. At the same time, however, his takeout and delivery orders are up almost 250% year-over-year.
Mobile apps like DoorDash and UberEats have changed the game.
There’s another development: while the brunch menu used to be his most popular meal of the day, Javier’s dinner menu has fully taken its place.
An uptick in remote working has all but eliminated his breakfast revenue.
It’s time for a change.
After conducting a cost-benefit analysis, Javier decides to become a delivery-only restaurant.
He moves locations and rents a building with a big kitchen, at half the cost of his restaurant.
Then, he eliminates his brunch menu and exclusively serves dinner, available for order on mobile apps between 4PM – 10 PM.
With this strategic business pivot, Javier reduces his overhead and increases his profitability in one fell swoop.
Prior to the Pivot: A Word of Advice
In the example above, Javier pursued fairly unilateral action with his business pivot.
While that seemed to work well for his business, other entrepreneurs may require a more multilateral approach.
As a general rule, be sure to consult your partners, suppliers, vendors, and employees prior to conducting a business pivot.
In fact, you may even want to talk with your customers and get their feedback. Sending out email surveys can go a long way to enhancing your clarity.
Remember: you’re not just pivoting for yourself, you’re doing so to deliver more value to your target market.
Stay above board, communicate clearly, and avoid rushing the process.
As famed investor Mark Cuban warns, “You don’t want to surprise [your strategic partners] and have it come out of left field.”
Recognize the hard work of your team, and to the extent that you can, include them in your vision of the future.
“They might have a great idea,” Cuban says. “[Your employees] know you, they know the industry, they know your business—and all it takes is one great idea.”
5 Effective Business Pivot Strategies for Immigrant Entrepreneurs
While patience may be a virtue, failure to adapt can be punitive.
Just ask Blockbuster Video, which used to be the king of movie rentals. In 2000, they were given the chance to buy a competitor for just $50 million.
During the meeting, the CEO of Blockbuster Video nearly laughed at the opposing executives and roundly rejected the deal.
That company was none other than Netflix, which now has a market capitalization of around $180 billion. Meanwhile, Blockbuster has gone the way of the dinosaur.
As you weigh your options, consider incorporating these business pivot strategies:
1. Consolidate and Start Slow
While a business pivot can be comprehensive, it doesn’t need to be.
In fact, it can involve little more than a singular, isolated adjustment.
For example, Margot runs a gym that offers spin classes, weight training coaching, and yoga classes.
While the gym itself is very popular, most of the recurring revenue comes exclusively through spin classes—only a few people attend the other workouts.
As part of a consolidated business pivot, Margot doubles her offering of spin classes, halves the availability of yoga/strength training classes, and invests in new marketing tools to increase her spin clientele.
In this case, Margot can easily leverage her already strong foundation and pivot with ease.
2. Move Quickly and Pivot Early
In some cases, small businesses need to make a more drastic change.
For example, Luis began building a company that sold virtual reality (VR) headsets.
Unfortunately, he lacked the capital needed to build prototypes that could adequately showcase his imagination (and attract potential investors).
After going back to the drawing board, Luis realized that his true passion was in providing small business loans to tech startups.
Obviously, VR headsets and business loans have very little in common, so it would benefit Luis to pivot as fast as possible from one vertical to the next.
Here’s the takeaway: once you realize your current business venture isn’t feasible or profitable, it’s time to make a change.
Or, to put it more bluntly, rip the business Band-Aid off as soon as you start daydreaming about a potential pivot.
Remember, it’s quite common for entrepreneurs to pivot multiple times in their career.
That’s why it’s advisable to do it quickly, so you can free up precious time and capital for your next venture.
3. Refine Your Target Audience
Audiences and their appetites are constantly changing. Over time, people become savvier buyers and their expectations increase.
Therefore, a business pivot could require a total recalibration of your target market.
To drill down to the details, ask these questions:
- What did our customers want most last year?
- What do our customers want most today?
- How can we adjust to meet that demand?
- Who needs our revised products most?
- Who are we overlooking in our target market?
As Margot realized in the example above, her clients favored spin classes far more than yoga and weight training.
That wasn’t always the case, as yoga was her top offering just two years prior.
People change, and businesses must constantly adapt to the clients they serve.
4. Harness Digitalization for Better Delivery (And Marketing)
Our digital economy has fundamentally changed the way we shop.
Thanks to modern technology, everything from groceries to medicine can be sent straight to your door.
With that in mind, consider streamlining how you offer your products. The digital world can dramatically improve your delivery methods and save you time and money along the way.
As we discussed with Javier’s restaurant, the delivery method itself guided his business pivot.
Apps like DoorDash and UberEats had a flawless mobile infrastructure ready to go. Javier’s business simply needed to harness it.
While enhancing product delivery, digitization can also enhance the way you market your products and reach your target audience with ease.
For example, if your company focuses on Gen Z consumers, you can use tools like Snapchat ads and access vast audiences.
5. Seek Dynamic Partnerships in Your Area
Small business owners make for the best collaborators.
As you plan your pivot, seek partnerships with other entrepreneurs.
For example, let’s say Martina runs a sandwich shop in a big coastal city. When a major law firm opens across the street, she notices how many paralegals ask for coffee with their sandwich.
Martina doesn’t sell coffee, but she has a friend who runs a popular espresso bar across town.
As part of her business pivot, Martina strikes a deal with her friend, who provides her with fresh-brewed coffee every day. She gets the coffee at a steep discount, so long as she pours it in her friend’s specially-branded coffee cups.
It’s a perfect business crossover, and the lawyers love it. Now, whenever they order their sandwich and coffee, they walk around with food from Martina’s and coffee from across town.
That’s one of the many ways a business can pivot, profit, and power their way into tomorrow.
Pivot and Connect Your Payments
In the entrepreneurial world, business pivots happen all the time.
Adaptation is healthy. If you choose to pivot, you’ll be in good company when you start.
As Winston Churchill said, “to improve is to change; to be perfect is to change often.”
One more thing: if pivoting seems overwhelming, just remember that you’ve already achieved the biggest “life pivot” imaginable—by immigrating to the United States.
If anyone can achieve a successful business pivot, it’s you.
Your next change might involve international payments: to pay for international services or providers, to inventory, or even process your international team’s payroll.
And uLink Business is here to make those payments easy for you, so you can focus on pivoting.
Visit our website and learn how you can get started.
