by Dan Radak, Negosentro |
Even the best business idea can fail due to some external factors that get in the way. Things like an insufficiently researched market, an unexpected launch of a superior product or a lack of work capital can all endanger the existence of your company. In a situation where your business model turns out to be inefficient, you may be forced to pivot your startup in order to save it. Still, deciding to undertake such a big step is not an easy choice to make, and even if you did make it, how exactly would you proceed with it? Here are four tips that might come in handy if you ever find yourself in need to give a definitive answer to these questions.
Re-build your team
First things first, 9 out of 10 startups operate with a skeleton crew. So, imagine a scenario where you have a 4-person team where one of your staff members is constantly slacking or underperforming, due to the lack of necessary knowledge. This one person is 25 percent of your entire workforce, which makes such a prospect highly unpleasant. Because of this, your first task should be rebuilding your team, so that every slot gets taken by the right person for the job. Of course, this also means that you will have to lay some people off, which is never an easy job, but is definitely something you will be forced to do in the future, so now might be the right time to learn.
Get the money you need
No matter how frugal your pivoting idea may be, it still requires some fresh capital and there are several ways for you to provide it. Going to a bank or a credit union usually isn’t your best choice, seeing how your record there may not be the cleanest one. Because of this, it might be a better idea to turn to private capital as a solution. In this way, you can find someone to fund your company in exchange for equity, which is usually a better choice than having to sell your assets to procure the necessary funds.
Learn from previous mistakes
Seeing how you are forced to pivot, there might be something you did wrong the last time around. This is why you need to learn from your previous mistakes in order not to repeat them. There are two ways to do so. The first one is to engage in some extensive analysis and even financial forensics, to see which error was the costlier one up to date. The other method is much less complicated and it includes simply listening to user feedback. Here’s the tricky part: seeing how your business is clearly not doing so great, the number of negative comments is bound to be greater than that of the positive ones. You should not take this personally and only look at them as pointers in the right direction.
Don’t bet on one horse
In the very end, you need to keep in mind that playing on a single idea is what has led you to this situation in the first place. The smart thing would be to assign a small team to this new task in order to test the waters. If this turns out to be efficient, you can later allocate more resources and staff members to this new function. Keep in mind that selling just one product/offering a single service has both its pros and cons. Although it offers bigger gains, it also puts you at a greater risk.
In the very end, there are a few more things you could do in order to ensure you have better odds than the last time around. For example, hone your leadership skills, do a better market research, hesitate less and focus on the product instead of the sales. Still, any of the four above listed pieces of advice will do to begin with.
Dan Radak is a marketing professional with eleven years of experience. He is a coauthor on several websites and regular contributor to BizzMark Blog. Currently, he is working with a number of companies in the field of digital marketing, closely collaborating with a couple of e-commerce companies.