Part of being a good business owner is knowing when your original ideas for your company no longer work. If you want your business to survive for the long term, you have to be nimble. You need to be able to adapt to change and conform to the reality you are confronted with in the market as it actually exists.
Doing so takes guts, but it’s often needed for your survival. If you don’t adapt, your business will surely fail. 96 percent of companies don’t make it to their tenth year. There are endless examples of companies that went out of business because they refused to change. With that in mind, below are five clear signs it’s time to pivot your business.
You’re in a Bad Location
Sometimes, pivoting as a company doesn’t mean changing your business model entirely. Sometimes, it’s as simple as changing locations. A certain location in a city may have provided you with steady business for years. However, things not under you control, like the economic health of the rest of that neighborhood, can dry that business up almost overnight.
Don’t be afraid to move to a different location with better economic prospects if you have to. If one location isn’t performing very well for you, you should consider hiring movers to allow you to move to a more up and coming location in the city.
Your Profits Are Steadily Declining
If you want clear evidence you need to pivot, you should examine your bookkeeping. You may find that revenues have been on a downward trend for quite some time. While you can make up some of those losses by slashing overhead, that may not solve the problem. It may be best to start considering adjustments such as introducing new products that can turn that trend around.
Your Target Market Has Changed
In other cases, your niche market may evolve. Many companies tend to hone in on one target market. However, what if that target market suddenly stops supplying your company with business? You could redouble your efforts to market to that demographic, but you may still come up short.
If that is the case, you need to consider adjustments. You may, for one, want to explore different demographics. The demographics of markets are continually changing in regards to age, sex, race and ethnic background. Making adjustments to better meet the needs of different communities could allow your company to get a foothold with these consumers.
The Tastes of Your Target Market Have Changed
If you start losing business, it may not be that your target demographic has disappeared. Instead, it may be the case that the tastes of those consumers have shifted away from what your company offers its products. If this is the case, you need to pivot so you can better cater to those particular tastes.
Your Fixed Costs Are Too High
In other cases, your product may not be the problem. However, what is really holding you back are the fixed costs and overhead expenses that eat too much into your profits. If that’s the case, you may want to rethink all your different business processes. You may find many different ways to bring those expenses down.
Overall, you need to be able to adjust as a business owner. You can’t be stuck in your ways in regards to your products, your marketing or your business processes. Due to the fickle nature of the business world, being too resistant to change can be a death sentence.
Author: Sia Hasan