Pivoting in a Pandemic
This week’s article is about pivoting in difficult times: i.e. changing the way your business delivers a product or service, or changing the product or service. Pivoting has been a thing since COVID-19 first struck, and never has it been more urgent than in recent weeks as small businesses across Tasmania have been hit with pressure, seemingly from all sides. These are trying times for small businesses, especially early stage startups and those relying on the Visitor Economy.
Never has there been more need to check in with Business 101 before pressing go on a pivot, and so Seedlab brings you: 12 ways to Pivot Perfectly. Also known as 12 Business Resolutions NOT to break this year.
Your People. Without people, you don’t have a business. Even if “people” is you.
- Firstly, to leadership. Are you leading by example? Are you looking after your own health: are you taking time to breathe, to keep some semblance of work/life balance, especially around social media, and are you making efforts to eat properly and get some exercise? Are you treating yourself and your team the way you would treat your customers? Are you communicating clearly and taking time to share your vision with your team, or simply to discuss options for the future, together? Sometimes the best innovations and ideas come from the most unlikely sources. Provide an opportunity to discuss options with your management and support teams. Listen. Be open. Even if your “team” is family.
- Check in with your team: Are you ensuring that their health and wellness is valued? Apart from the obvious COVID-19 protection and awareness of support structures, how about keeping a bowl of fresh fruit in the staff room, or organising a vegetable box for each team member once a week, or a team BBQ or special morning tea with cake (it doesn’t all have to be healthy). Are your team on the same page as you and are they up for the challenges and journey ahead? Do they have the necessary training for the future venture? Are your OH&S plans up to date and in place?
Your Proposition. So you have a new idea! Perhaps it’s a new way to get your product to customers, or a different format for your product or service, or a new product. You absolutely need to check the new idea isn’t going to be a case of jumping from the frying pan into the fire.
But what if you don’t have a new idea? Now is the time to do some research, thinking outside the box, brainstorming and talking to people. Are there new ways of getting your product to people? Can you do more to promote online sales direct to your customers? Can you team up with other businesses with a complementary product or service?
Here are some crucial things to check before pressing ‘go’, and it’s the three C’s: Customers, Competition, Costs.
- Who is your consumer or customer for the new idea? Perhaps the person who values this new format is different to your regular customer. Who are they? How do you know they are they interested in this new format? Do they understand it and what are they prepared to pay for it? You need to know the answers to these questions, and the only way of finding out is research. How do you do this? Spend some time researching and talking with your current or new customers. Hopefully you have an audience you can ask questions to via social media, or an email database. If not, get some help from the various digital support programs out there to ask questions of a new audience – you can do this by paid ads or surveys. Get up close and personal with your customers.
- Have you checked out the competition? What are your competitors doing, and more to the point, what are the options your customers have instead of buying your product or service? What is unique about YOUR offer? How is what you offer different/better/better value? You can’t possibly communicate this, if you don’t understand it. How do you get to the bottom of this? That would be via research again, most of which can be done from your computer. And once you do understand how you are different, better or better value, and who values what you offer, ensure you communicate, communicate, communicate!
- Do you fully understand your costs for doing this new business? Do a thorough examination of your cost of goods, and the costs of supplying this new format or product/service. This includes labour, ingredients, delivery, packaging and marketing. A simple spreadsheet is the solution – itemising everything and adding in, or at least estimating, costs based on a per batch, and then a per unit basis. Don’t forget to factor in your time. Once you have done this, you MUST check that this is less than the price your (new) customers are prepared to pay. Is there enough market in the gap? If not: you need a new idea, you need to reduce your costs somehow, or you need to find a bigger or different customer base.
By the way, before you pivot: have you checked if there is anyone who owes you money? Check your invoicing is up to date and send statements. Sometimes the simple things get overlooked.
Your Processes. So you have decided to press “go” on developing and delivering a new format, a new product, or some other new approach to doing business. What do you need to do now?
- Check that you have documented the necessary processes for yourself, and your staff to develop and deliver this new offer. This includes written protocols, and specifications for ingredients and the final product, including pictures where possible. Provide training in how to develop and deliver the new product or experience safely, and ensuring customers receive a consistent experience. And don’t forget the obvious things, like ensuring any new equipment is tested and tagged and safe to use.
- Write down what success looks like for the new activity, and what metrics you will use to measure success: i.e. we need to sell 100 units of this new product at a specific price point, in the next 4 weeks. Have a clear plan for how you will do this: who will do what, how you will market and communicate it. Write it down.
- Communicate with your customers: ask for feedback, reviews, and referrals. And remember to say thank you for these. Sometimes it’s the simple things that make all the difference to how your business succeeds.
Future-Proof. How can you future proof your business for success? There are many businesses out there actually succeeding despite the pandemic. Sometimes it’s just a case of finding the right niche and focusing on it.
- Ensure you celebrate your successes, both large and small. Recognise the role your team have played, and reward them, whether the activity was a success or not, the effort needs to be rewarded. Words, gifts, bonuses, time off. Everyone needs a little love.
- Have a Plan B. Know when the time has come to pivot again, if the new idea is obviously not working (i.e. the metrics for success you set are not being met). Life is change, and so is business. If you stop moving you will be overtaken. Review and adapt your business plan to meet changing needs. Use research to build a new pivot.
- Remember: time heals all wounds, and this too, shall pass. And when times are good again, build some crisis funds into your cash flow. Research insurance options: for product recalls, cancelled functions and events, and for unforeseen events, like loss of a key worker.
- Know when to stop. This can be the hardest decision of all. Sometimes you simply need to stop. The business idea you have is either not the right idea, you simply haven’t got the resources to make it work, or the time is not right. Customers are not seeing the value in the proposition, or have to many other options. Take advice, and take care. Stopping is not failure. Failing to stop can be disastrous.
If any of the information in this article confuses you, or is news to you, then check out www.seedlabtasmania.com.au because we are planning some amazing workshops and webinars, and a few Bootcamp programs, in 2022.