25 May 2017
Many of today’s well-known companies began life as something else entirely. Twitter started out of a podcast subscription company, Nokia began life as a paper mill. Starbucks originally sold just espresso makers and coffee beans, not the hot beverages and Frappuccinos it’s known for today.
What do these companies have in common? They all pivoted. They saw that their original business idea wasn’t likely to continue to succeed due to increased competition or they fell in love with a new idea and decided to move in that direction. Pivoting can save a business from going under but it can also open the doors to growth for a business that is currently doing rather well. If you’re considering a pivot for your business, here’s what to ask and how to do it.
Questions to Ask Before a Pivot
The big question to ask before you pivot is “why?” Why should you pivot and what will your business gain from doing so? One answer to the question “why” might be to keep customers interested in your product or to stay one step ahead of the competition. Twitter, for example, decided to pivot away from being a podcast subscription company when it became clear that iTunes was going to be a leader in that category. Pocket Gems, a mobile game developer, decided to pivot once it learned that gamers were moving to more technologically advanced games and losing interest in the games offered by Pocket Gems.
Another question to ask is “what does your business do that sets it apart from others?” What value does your company bring to the table that no other companies bring? If you can’t come up with an answer to the “what” question, it might be time to change course so that you can answer the question.
Finally, you want to ask yourself “how?” How can your company begin to better meet customer needs or fill in a gap in the marketplace?
Ways to Pivot Your Business
Once you’ve decided that pivoting your business can help it move to the next phase of growth, the tricky thing can be figuring out how to actually change direction. There are several paths your company can take, depending on what the ultimate goal of the pivot is.
For example, if you hope to attract new customers or want to work with a new demographic to increase revenue, take a close look at your current offering. If your primary customer is currently single, young adults, look at ways you can tweak the product or add a new product to make it appeal to older adults who might be married or have families. If you think that a product that originally appealed to young people can’t appeal to all, think again. Just take a look at Facebook. It was originally only for college students. Now people of all ages use the site and use it regularly.
Surveys or actually going out and talking to people on the street can help you see what you can do to reach a new demographic or alter your product to make it more appealing. You might think that you’re offering something that solves a problem. But it could be that the people that use your product or would use your product think otherwise.
Changing your business model is another way to pivot. For example, if you are a direct to consumer company, you might find more opportunities for growth if you start working with distributors. You’ll be able to get your products in stores, rather than selling them directly. That can reduce costs on your end and increase the size of your customer base.
You might also consider pivoting your business by changing your pricing structure. While offering your products at a high price point might make sense at first, you might find that you can easily broaden your customer based by introducing a lower priced option. You can still offer the higher priced item, but as a “premium” or “luxe” option. The lower priced option will bring more people in. Who knows, after some time, many of them might decide that they like your products so much that it is worth switching to the premium option.
The road to growth might be long and full of twists and turns. If you’re not sure what direction to take your business in or if a pivot is right for you, the team at New Direction Capital can help. We offer virtual CFO services to help your company achieve profitable growth. Contact us today to learn more.
Image courtesy of tiverylucky at FreeDigitalPhotos.net
As a business owner, you’re well aware of the importance of continued growth, both in terms of your professional life and in terms of your business. But it’s not only owners and managers who should be striving to continue to grow and develop over time. It’s also important that you encourage that same growth and development in your team members.
You might be concerned that encouraging your employees to grow will cause them to one day get too big for the nest and to fly off to greener, more enriching pastures. That’s not necessarily true. The more your employees grow, the better able they’ll be to take on managerial and leadership roles in your company. And, the more likely your team will be to steer your company onto the path to growth. If you don’t already have a plan for employee growth and development in place, here are a few ways to create one.
Have Managers and Leaders Serve as Guides
Who better to help your team grow than the people who are already in a position of leadership at your company? While you don’t necessarily need to start a management training program, developing a mentorship program, where employees work one on one with a manager or other leader, can help less experienced or newer employees hone their own leadership abilities. By mentoring another employee, a manager can quickly see what that employee’s strengths are and what his or her weaknesses are, and help him or her work on improving the weaknesses and making the strengths even better.
Additionally, a mentor can provide guidance and support to an employee in periods when he or she is questioning his or her role with your company. If you have a number of talented employees that you want to hang onto, having a mentorship program in place can be what gets them to stick around and grow with you, rather than seeking new opportunities elsewhere.
Offer Opportunities for Learning
In some professions, continuing education is a must. Doctors, nurses, and others need to take a certain number of CE courses each year to maintain their licenses. Even if continuing education isn’t a given or expected in your industry, making it a key part of your company’s culture can help everyone. Employees will feel challenged and that their needs for growth are being met. Your company will be able to leverage the skills and abilities gained by employees through continuing education programs to move on to the next phase of your growth or to scale to the next level.
Offering learning opportunities is even more important in this day and age when new skills become imperative and outdated very quickly. If your employees are keeping ahead of the curve, odds are your company will be as well.
Increase Opportunities for Networking
Networking isn’t just something that employees need to do when they are between jobs or are looking for their next opportunity. It’s also an essential skill for them to master to promote your company and to grow themselves. Being comfortable enough to reach out to others in your field or to potential clients is an important skill for any employee to have. It can mean the difference between your company landing a huge client and being able to increase its revenues or your company treading water for years to come.
Encourage Employees to See the Company as Their Own
You don’t have to give each employee an ownership stake in your business, but encouraging them to have a can-do attitude and a spirit of ownership can really help them when it comes to their desire to see the business grow and succeed. People are more likely to want to support things that support them. If you’re constantly working to help your employees improve and move up the career ladder, they are likely to return the favor and help your business scale.
With your team on your side, it’s easier to work towards achieving your goals for your company. If you need more assistance putting together a map for growth and business success, the team at New Direction Capital can help. Contact us today to learn more.
Image courtesy of Nutdanai Apikhomboonwaroot at FreeDigitalPhotos.net
07 Jul 2016
You know that your company needs to grow if it wants to continue to thrive. But, how to grow your business or what things you need to do for it to grow might not be so clear. Alternatively, you might be unsure if the step you plan to take is really the best step. Whether your business is just moving past the startup phase or has been operating for years, there are several things it needs to do to grow.
Understand the Competition
Knowing what similar companies out there are doing can help you see what your company is doing better, or where it has room for improvement. Understanding your competition can help your company grow in two ways. First, it lets you see what works for others and what you can put into practice to give your business a leg up. Second, it helps you identify what makes your business different from the rest. Finding out what your company offers to customers that no one else does can help as the business expands.
There are a few ways you can get to know the competition a bit better. One option is to check out the competition’s web presence, including its website and social media accounts. See what products they offer, what specials they offer, and how they engage with customers or potential customers online. If you prefer an in-person approach, you can visit trade shows or conferences and check out the tables or booths your competitors have set up.
Decide How to Expand
Growth and expansion can mean different things to different companies. For example, some companies find it best to grow by opening in new territories or regions while others find that targeting a new customer group (without abandoning the old one) is the road to take. Yet another option is to offer a new product or a new service, which can not only appeal to your current customers but also help your company reach new ones.
Finally, some companies decide to grow by acquiring or merging with another business. If there is a competitor in your area, it might be in both of your interests to merge. Alternatively, another business might offer a product or service that complements your own, and acquiring that business might be the most logical step when it comes to growth.
Look at What Could Be Improved
Growing your business doesn’t only mean expanding it. It also means looking at areas that would benefit from improvement. One of your business’ goals should be to be the best at what it does or in terms of what it offers. If it isn’t the best, customers are going to seek a better product or service elsewhere.
You can find out what areas can use improvement in several ways. Having an outside eye, such as virtual chief financial officer, review your company’s strategy and finances can provide you with useful information about what you are doing right and where there is room for change. Conducting customer surveys can also help you see where there is room for improvement. It could be that your customers are dissatisfied with the speed of your service, with the price of your products, or with a number of other things, but you won’t know unless you ask them.
Maintain Your Reputation
It can be easy to focus so much on growth that the quality of your company’s product or service actually starts to suffer. But, your company simply won’t do as well as if its reputation starts to slip in the eyes of customers. You don’t want to start offering a lower quality product in an attempt to move into a new market or reach a new demographic, only to have your current customers stop working with you because they feel their needs are no longer being met.
There can be many obstacles on the road to growth, even if your company seems to have what it needs to expand. The team at New Direction Capital can help you put a plan into place and map a course for growth that doesn’t sacrifice quality or end up alienating your current customer base.
Image courtesy of lekkyjustdoit at FreeDigitalPhotos.net
02 Jun 2016
For a company to succeed, it needs to grow. Staying the same year after year isn’t remaining static, it’s stagnating. While some companies err on the side of too-slow or no growth, other companies make the mistake of growing too quickly, ultimately burning out and, in the worst cases, fading away. If a company is growing too quickly for its own good, there are usually some easy-to-spot signs, often concerning the company’s finances, employees, and customer satisfaction.
You’re Spread Too Thin
One clear sign that your company is growing at too fast of a clip is if you feel you are spread too thin. When a company first starts, it’s not uncommon for an owner to wear many hats – CEO, CFO, and CTO – all rolled into one, for example. But, as a company gets bigger, each of those roles also gets bigger. You might find yourself attempting to perform the roles of multiple full-time positions, when you might barely have time for the responsibilities of a single position. When there’s too much too do and too little time to do it, it’s not uncommon for an owner to cut corners, opening the door to mistakes and issues down the line.
Several financial concerns can crop up when a business is growing too fast for its own good. One common issue companies face is being strapped for cash. As your business expands, so do its financial obligations. When growth is at a planned for, measured pace, your company is able to find financing to help it keep up with the increase in expenses. If growth is too quick, your expenses might shoot past your available credit or cash, creating a financial crunch.
Another financial issue that is common in cases of rapid growth is a bump in the amount of receivables. Your company might have increased sales, but if a lot of those sales are made on credit, and the individuals or companies you sell to are slow to pay up, you’re likely to run into a financial wall sooner, rather than later.
Underestimating the role finances play in the health of a business is another issue that typically affects rapidly growing companies. Without a dedicated CFO or an outsourced, virtual chief financial officer, it can be difficult to really grasp what your company’s financial health looks like and difficult to put a plan into place that gives you the capital you need to grow at a sustainable rate.
Companies that are growing too quickly often make the mistake of hiring just to fill empty positions, without paying much attention to the quality of those hires. If there’s a lot of pressure to put people into certain roles, there’s also usually pressure not to vet those employees as closely as you should, leading to a potential mis-hire.
Another clear sign of too-quick growth can be seen in a change in the way your team views your company. If employees who were formerly excited by the idea of working for your business become less engaged or start jumping ship, it can be due to rapid or constant changes in your business. While most people want to be on a train that is moving forward, being part of something that changes on a seemingly daily basis or working for a company where the future seems uncertain can make people who were once thrilled to be a member of your team start to reconsider their role with your company.
Having customers come back for more is key to the success of any business. But, sometimes, companies get so wrapped up in growth that they ignore the customers they’ve already won over, in favor of new, uncommitted customers. If previously loyal customers stop ordering from or working with your company, that can be a sign that you’ve tried to grow to quickly and have alienated your core client base.
The team at New Direction Capital understands that growth is essential for any business. To learn more about how we can help you chart a path for healthy, steady growth, get in touch with us today.
Image courtesy of stockimages at FreeDigitalPhotos.net
Apple, Kmart, and Levi-Strauss — what’s one thing these three very different companies have in common? They’ve all gone through periods where their growth has stalled and the companies have floundered. Although it isn’t something any business wants, a pause in growth or even a decrease in growth is fairly common. The good news is that a period of stalled growth can be survived or even avoided, if you know where to look for problems.
You’ve Ignored the Competition
There will always be competition out there, and it’s important for a company to continue to be aware of what similar businesses are doing or how those businesses might claim a portion of a company’s market share. When your business is in a comfortable spot — sales are up, employees are happy, and your company’s value is increasing, it can be easy to ignore what the other guys are doing or to think that it won’t affect you.
One way to avoid a business plateau due to increased competition is to pay attention to what similar companies are doing. Examine their products or services and look at how your company’s differ from theirs. For example, a competitor might offer a lower cost version of your core product. Since it helps no one if you get in a price war with a competitor, one way to avoid a loss of sales (and growth) is to highlight how your product is better and why it demands a higher price.
You’ve Shifted Focus Away From Your Core Business
Companies grow and change throughout the years. But, a company that abandons its core product or its bread and butter money maker in favor of the unknown is likely to hit a few roadblocks or to miss out on an opportunity to grow and develop. Keep up research and development on new products. But, don’t toss out the products that people have consistently relied on your company to produce, and are going to continue to rely on your company to produce.
Customers are Bailing
Whether they are moving on to your competitors or simply no longer interested in your products or services, it’s never a good sign when customers start leaving your company in droves. One way to get and keep your customers is to really understand who your customer is. You can look at this as choosing the customers for your business, rather than having them choose you.
Take a look at your product or service and ask yourself who it is intended for, what problem it solves, who would benefit the most from it. Then, focus on retaining or acquiring that customer. Instead of struggling to keep customers who might be lukewarm at best about what you have to offer, you’ll be going after and retaining the customers who will really get the most out of your company.
You Don’t Have the Right Team
Your company can have a comprehensive strategic plan in place and a clear roadmap laid out for growth. But, without the right team in place, a team that’s able to help you put that plan into action or follow that map, business growth is likely to stall or falter. There are many reasons why your employees or management team can keep your company from achieving growth. It could be that you hired people who don’t have the skills needed to successfully market the company or to come up with solutions to problems that might arise.
If growth is your goal, it pays to assemble a management team that has past experience growing a company. You might not need to hire someone full time. It can be helpful enough to work with an outsourced, virtual chief financial officer who has a track record of helping companies develop strategic plans and grow their businesses.
Whether your company is in a period of stalled growth or you are concerned about the potential for a business plateau, speak with the team at New Direction Capital today. Our goal is to provide you with the solutions you need to help your company grow.
Image courtesy of hywards at FreeDigitalPhotos.net