pivot your business

What are the steps to successfully pivot your business?

Pivoting your business isn’t always fun, but it can be necessary. Done right it can open up your potential for much greater results. It may save everything you have done so far. Including thousands of jobs, building investor relationships, and the time you’ve invested. This is true for brand new pre-revenue startups, as well as, huge international corporations that have been around for decades.

So, if a pivot is right for you, how do you do it?

What Is A Pivot?

As the term suggests, pivoting your business means turning and changing directions from where you are, and where your venture is pointing.

Pivots can be risky and painful. Though they can also be obvious, natural, and can finally rip open the doors to big success.

Pivots may be soft or hard. Meaning adjustments in one area, like pricing or target customers, or completely changing your product, target market, and business model.

The Steps To Pivoting Your Business

All of these steps are necessary for a successful pivot.

1.    Be Sure You Need To Pivot

Have you really run into a dead end, or hit a ceiling? Or, are you just trying to find an easier route? There aren’t any easy paths in entrepreneurship or to success.

Are you really left with no choice but to pivot? Consider whether you may just need to make some small tweaks and soft pivot, versus attempting a hard pivot.

You can continue iterating endlessly. Though, you may only have the ability to hard pivot once or twice in your business.

2.    Research, Research, Research

Being so impactful, you have to make sure you are choosing the right pivot, and are 100% this new direction is the one.

You can’t afford to just thrust your venture in a new direction without really being 100% confident it is right, and being able to back it up with hard data this time.

Gather all the numbers and facts, and get unbiased outside opinions to validate your thought process and findings. Only then can you warrant this change and be prepared for the next steps.

3.    Get Buy-In From Your Investors

One of the most pivotal parts of pulling off a pivot is getting buy-ins from your investors.

They backed you and committed their capital to your original plan. You are going to have to work hard to convince them that although you were completely wrong the first time (when you swore you were right and showed them the data), you have got it right this time.

If you can’t get them to come along for the ride, it is possible they can ask for their money back, pull the plug, or even replace you, and boot you from your own business. At a minimum, they may not participate in any further funding and may hurt your reputation in conversations with other investors.

For fundraising, avoid going with a pitch deck that you have created from scratch. Kickstart things by using the best pitch deck template you can get ahold of.

4.    Get Buy-Ins From Your Team

You also need buy-ins from your co-founders, partners, and staff.

If they aren’t all in on this and confident in your new plan, then it is going to be really hard to achieve. If you have hired well, then they also often present professionals with more experience than you in certain fields and continue to be closer to the front lines and customers than you. They may know better than you.

Sometimes they’ve been working in one direction with you for years, making daily sacrifices. This can be heartbreaking and soul-crushing for them. Others may have been begging you for change for a long time.

You may not be able to carry your entire team through this pivot, but make sure you have belief in the change from those that matter.

5.    Test It & Get Commitments

Before you go all-in on this pivot, make sure you test it.

You can’t go half in. Most won’t give you a second or third chance to pivot. So, make sure you haven’t just checked the data, but have also really tested it.

You can start by talking to customers and your new potential customers. Be very clear that you are checking all of the boxes, including new pricing models.

Then, run real tests. Who will actually sign up and pay for this new evolution of your business and product? How many will do it? How much faster are they committing? How does customer acquisition cost improve?

6.    Do It Fast

If you do need to pivot your business, then the longer you wait, the worse it will be. You’ll have less room to maneuver. You’ll have fewer finances to do it. You’ll be under a lot more pressure, which can yield more mistakes.

If you are going to pivot, the early you do it the better the outcome.

7.    Make The Hard Decisions, Fast

If you are going to pivot your business, there may be hard conversations to have, and hard decisions to make. The faster you do it, the better.

Just commit, follow-through, and move on.

This may mean laying off half of your staff, closing physical locations, restructuring debt, and turning off many old customers that don’t match this new model. You may have to make significant financial bets on this new direction. Go all in. Go fast.

Summary

Many businesses have to pivot. Brand new startups and large mature corporations alike have to go through this to stay alive and grow. There can be growing pains and tough decisions to make. Yet, if you work these steps, pivoting can set you up for the success you’ve always been looking for and believed possible.

BIO

 

Alejandro Cremades is a serial entrepreneur and the author of The Art of Startup Fundraising. With a foreword by ‘Shark Tank‘ star Barbara Corcoran, and published by John Wiley & Sons, the book was named one of the best books for entrepreneurs. The book offers a step-by-step guide to today‘s way of raising money for entrepreneurs.

Most recently, Alejandro built and exited CoFoundersLab which is one of the largest communities of founders online.

Prior to CoFoundersLab, Alejandro worked as a lawyer at King & Spalding where he was involved in one of the biggest investment arbitration cases in history ($113 billion at stake).

Alejandro is an active speaker and has given guest lectures at the Wharton School of Business, Columbia Business School, and at NYU Stern School of Business.

Alejandro has been involved with the JOBS Act since inception and was invited to the White House and the US House of Representatives to provide his stands on the new regulatory changes concerning fundraising online.