Pivoting is expensive, but so is making smaller changes to your business plan to address the present-day realities of your market, your customers and your company. Revising your plan and implementing those changes can be time-consuming and expensive, and it can result in considerable operational upheaval.
But sometimes that’s exactly what your small business must do to ensure future success. How will you know it’s time to re-write your small business’s playbook? Here, three key signs:
1. Your growth is stagnant.
In a startup, momentum is everything. Growth provides the resources to continue to expand, beat the competition, improve quality and service, and increase efficiency through economies of scale.
Unfortunately, most small businesses can’t afford to simply plow additional funds into advertising in order to grow. Keeping customer acquisition costs down — and churn rate down as well — is key in the early stages for any bootstrapped startup.
In that case, growth might require jettisoning — or at the very least de-emphasizing — some products to focus on more profitable products. (See Steve Jobs when he returned to Apple in 1997.) That may require you to shift employees into new seats: sales, service, operations, etc.
Do this and the result might be a ripple effect of positives: Shifting employees provides opportunities for them to learn new skills, demonstrate new talents and learn about other functional areas. Moving a few employees into different roles can help re-energize and re-engage a number of other people.
Growth could also require introducing new products or services, especially when they complement existing offerings. Complementary offerings are a great way to re-engage existing customers as well as to bring in new customers who may then purchase other products or services.
In short: If your growth has stalled, what you planned to offer may not be sufficient. So how will you know what changes to make?
Ask your customers. They’ll tell you.
2. The needs of your “ideal” customer have changed.
Every business plan includes information on the target market: Demographics, interests, needs, pain points, etc. Over time, those needs can change (or maybe they never actually existed, at least on a sufficiently broad scale).
If you’re a tech company, evolving technologies can change the way customers interact with your service. If you’re in the restaurant business, today’s hot trend can be tomorrow’s outdated fad.
More likely, as your business has grown, so too has your infrastructure — meaning the level of one-on-one service you planned to provide is no longer necessary. (Or even desired.)
A great business plan lays out a blueprint for meeting customer needs and solving customer pain points. A great business constantly evolves to ensure those needs are met and those pains are eliminated.
Stay on top of metrics like return, service calls, churn rate, etc. to keep up with changing customer needs. Talk to your customers to find out how their needs may have changed.
Then revise your plan to make sure you provide not just what your plan says, but what customers really want and will pay to get.
3. You need full-time people in freelancer seats
Early on you may not have needed — or maybe couldn’t afford — to hire full-time people to perform certain functions. Wisely, you turned to freelancers. Freelancers are great for completing specific tasks, especially when sufficient expertise or specialized knowledge is a necessity.
The problem with freelancers is that they can only perform specific tasks. They can’t step into other roles. They can’t step into other functions. Because they aren’t a part of your company, they can’t learn and grow and develop with your company.
At some point it makes sense to hire a full-time employee. While they might not currently possess every drop of skill and experience they need to succeed in the role, when you hire people who are adaptable and eager to learn, they soon will.
Source: 3 Key Signs Your Startup’s Business Plan Needs to Change