A “business pivot” refers to a strategic shift in direction, products, or services to better align with market demands, customer needs, or emerging trends. It’s a proactive response to changing circumstances and a testament to a business’s agility and foresight.
Recognizing the need for a pivot is pivotal in itself. Signs such as rising operating costs, declining sales, shifting customer preferences, or disruptive industry changes can indicate that a business pivot might be necessary. Additionally, external factors beyond a company’s control–such as the Covid-19 pandemic–can play a significant role in prompting businesses to reconsider their strategies.
Laura Hoyos, owner of Paint 2 Smile, saw a need for a quick pivot strategy during the early days of the pandemic. Her business relied primarily on customers visiting the storefront for face and body painting–until the mandated lockdowns made those visits impossible.
“I had a corporate client call me and ask me to do a project around arts and wellness for members of their team,” recalls Hoyos. “That led me to create guided paint experiences focused around reaping all the benefits of the arts.”
Not only did Hoyos’s corporate workshops allow Paint 2 Smile to remain open, but her work also brought joy, connection, and team building during an uncertain time.
A critical aspect of executing a successful business pivot is knowing the right direction to move. While Hoyos jumped at the opportunity to provide painting workshops when her storefront was shuttered, the reasons for pivoting may not always be so obvious.
Two ice cream businesses in the Bay Area—Tin Pot Creamery and Out the Dough—have faced such decisions. Escalating rental costs and decreased foot traffic over the last few years compelled each to shutter brick-and-mortar operations.
In the case of Tin Pot Creamery, owner Becky Sunseri decided that wholesale distribution promised more longevity for the business.
“In order to be able to have something that works for the business long term, it feels like grocery distribution is the best way we can continue to bring great ice cream to people,” Sunseri shares. “It’s an evolution of the business.”
In prioritizing retail sales, not only is Sunseri saving on rent and other operating expenses, she can also focus on expanding her audience well beyond Northern California. Tin Pot Creamery’s ice cream now appears in over 300 Whole Foods Market locations throughout California and the Pacific Northwest.
Out the Dough co-founder Angelo Lonardo also cites runaway operating costs for the recent shuttering of his family business’s flagship storefront in Concord, CA.
“Unfortunately, the sales coming into this location do not justify the increased expenses it costs per month to keep the doors open,” says Lonardo in a recent social media post.
Rather than closing in-person operations altogether, however, Out the Dough will focus efforts on their second, more profitable location in Martinez, CA, supported by the insights that Clover continues to provide for their business.
“We look at our Clover reports on a daily basis,” emphasizes Lonardo. “We have found it super helpful to see how our business works on a daily, weekly, and even annual basis.”
Sometimes a pivot strategy doesn’t require scrapping your original business model or idea altogether, but exploring alternative revenue streams on the side.
Tina and John Pressley, co-owners of My Mobility Medics, began their business as a repair shop for mobility equipment. While this service remains in high demand for the couple, it felt limited in scope.
Then Tina had a revelation, “You can’t always fix something when it’s too old or they don’t make parts for it anymore. You have to replace things.”
My Mobility Medics decided to offer retail sales on top of their repair services. Now the business comprises only 25% in repairs, 25% in equipment rentals, and 50% sales in the retail storefront.
Post-pivot, it’s essential to evaluate the results and measure the success of the strategic shift. Clover’s POS reporting provides a snapshot of key performance indicators–sales across time, percentage of repeat customers, before-and-after comparisons–metrics that play a crucial role in determining the effectiveness of the pivot.
By taking time to recognize the signs, entrepreneurs can navigate the complexities of change and emerge stronger in the competitive business landscape.
Although a pivot might feel like failure, it is, in fact, a proactive measure to avoid failure–taking a deliberate shift in direction before depleting your finances and reaching a point where closure becomes inevitable.
Even some of the world’s most prestigious global companies have undergone a pivot at some stage in their journey.
If you have questions about how a Clover POS system or other Clover tools could help you through your business pivot, contact a Clover Business Consultant today.
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