Mastering the Pivot as a Small Business Owner
As a character from Ernest Hemingway’s 1926 novel The Sun Also Rises aptly surmised, bankruptcy is a gradual process that ends suddenly.
While this scenario applies in most cases, the emotional toll of bankruptcy is usually overlooked. Entrepreneurs are passionate about their work and derive a sense of purpose from their businesses, so they experience a real sense of loss when faced with the realization that they have nothing left to give. Oftentimes, it’s not the money that runs out - it’s the passion that fuels the business.
Usually, the process is gradual. But there comes a point when, as a business owner, you finally accept that there is nothing you can do to make things better. You begin feeling a sense of dread when going into the office. You stop returning calls, and you’d rather get a root canal than think about the future of your company.
Congratulations: You’ve just filed for emotional bankruptcy.
If you are leading a well-funded Silicon Valley startup, a pivot is your best option. If your first business model doesn’t work, you’re not making money, and your team is starting to disengage, you can redeploy the remaining assets and talent in an effort to find a more profitable business model. A successful pivot will increase motivation and ensure long-term financial sustainability.
But what happens when the survival of your business rests in your hands alone? For a small business owner, especially in a service-based business, the stakes are much higher, and venture capital is harder to come by. Small businesses are fueled by passion, and it is much harder to refill the tank when you alone need to find the courage and resources to start over.
What do you do?
First, in a world of information overload, you need to accept that you don’t need more information, but a clear direction based on objective assessment of your present circumstances.
Business strategist and the author of The Pivot Map, RM Harrison, has devised a formula to help you find an alternate path when it feels like you - and your business - have reached the end of the road.
Harrison’s formula works on the premise that most service-based entrepreneurs create businesses focused on monetizing skills. As a result, they can quickly become lost in the daily grind of fees for service, eventually losing sight of the personal reasons that led them to choose an entrepreneurial path. Their reserves of passion become depleted.
“Over time,” she says, “the business owner realizes that the work doesn’t fully reflect their natural strengths, and they begin feeling trapped.”
The five tell-tale signs that it’s time to pivot.
When starting a business, one needs to be prepared for an endless array of highs and lows. Long hours and hard work are not necessarily a signal that it’s time for a change. Instead, something is wrong with your business model when:
- You’re no longer motivated by the work you do.
- The thought of going to work makes you annoyed, or even angry.
- You no longer have a plan to grow the business.
- You realize you don’t like your clients very much.
- No amount of money feels like it's enough to keep going.
If at least two of these statements apply to you, it's time to change your approach.
This does not mean starting over from scratch. Harrison advises revising the business model to ensure that it leverages your natural strengths and feels purposeful. Still, its main goals must be generating revenue, maintaining relationships, and preserving reputation.
Here are Harrison’s tips on how to revamp your business plan.
1) Define what success means to you.
When monetizing your skills is your sole focus, it’s easy to forget who you are. Thus, rather than thinking, “I’ve got to make money,” you should start feeding your soul. To do this, Harrison recommends that you define what success means to you. You should consider what you most enjoy about your business and identify your favorite clients, and try to expand in that direction.
2) Identify the type of impact you want to have.
Harrison does not agree with the view that you cannot earn enough doing what you love. You can, but you cannot lose sight of what is valuable to your clients. According to Harrison, the following questions will help you in that process:
- Who are your best clients?
- What problems are you solving for them?
- How do they benefit from working with you?
When you frame your work in terms of the value you create, you will begin to see new opportunities to better serve your clients.
3) Be strategic about this transition, and realize that it is a process.
Even a well-funded pivot doesn’t happen overnight. For small businesses in particular, Harrison recommends creating a roadmap with well-defined milestones along the way to your desired future. The key to mastering the pivot lies in leveraging whatever momentum you've already built to support the next phase of your business.
When you draw upon your natural strengths, you can never run out of the passion that fuels your business. “We choose entrepreneurship, so we can earn on our terms and create a life we love,” says Harrison. “If your own business doesn’t give you the freedom to do that, then what’s the point?”
Kim Cayce is an American entrepreneur, speaker, and executive coach. She is the owner of Kim Cayce International and creator of Ignite Your Genius, a business accelerator designed to help female entrepreneurs find their passion and live with purpose.
Have more questions? Follow up with the expert herself.
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