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Business owners often ponder the question: What’s next? For many entrepreneurs, the next leg of entrepreneurship doesn’t mean selling and starting new. Instead, it may mean optimizing what you already have. This can look like paring down and redirecting your focus to your most profitable business aspects.
Don’t let excess offerings distract you from key success generators of your startup or small business. Here’s how to pare down and pivot your operations for long-term, sustainable growth.
Why you should pare down and focus on key aspects of your business
Many business leaders tout “niching down” as a key driver for success. This means specializing in one thing—a niche product, service, or target audience—and operating under a “focused business concept,” as Roger David, president and CEO of GSR Brands, says.
Even if you launched as a lean startup, it’s easy to get distracted with the numerous ways to earn revenue and attract a bigger or new market. It’s also possible to backtrack by paring down and pivoting in the right direction.
The idea is to home in on what makes your business truly successful and profitable—aka the backbone of what makes your company stand out.
Entrepreneurs like to try new things, but consider eliminating the distractions that don’t get you where you want to go. Too much of a good thing can be a negative!
Step 1: Identify your business goals
Whether you’re in real estate, ecommerce, software as a service, or another vertical altogether, it’s important to understand your business goals. To do this, you’ll want to look back on previous business plans (whether you made one in the beginning or adjusted it as you scaled).
Identify how your target market has shifted, if at all. Determine if there have been any changes in your business strategy or marketing strategy through uncertain times. Have you launched new products without honing the functionality of your original product features?
If you find that your business has evolved, that’s okay! However, you’ll want to reorient yourself by looking at those original business goals, determining what parts of the goals you want to maintain and what, if any, you want to change.
Don’t be afraid to be granular in your approach. By getting clear on this, you’re setting yourself up for a successful pivot—whatever it may look like for you.
Step 2: Sift through your offerings and identify the most fruitful
Now that you have aligned your business goals, it’s time to dissect your offerings. This means breaking down the products and services you offer by type.
Label each offering with information like how much revenue it brings in, what percentage of leads it drives, and other key performance indicators that help you visualize the offering’s overall profit contribution.
From here, you’ll want to create an ordered list of your offerings, from most to least profitable. By identifying the most fruitful, you’ll have a clear directive of where to focus your efforts moving forward.
Of course, this may mean changing up your day-to-day operations, and potentially even stepping into a new iteration of your business. In the final step, we’ll help you hone your messaging and embody your upgraded business.
Pro tip: You can still maintain a diversified revenue stream without giving too much of your energy to less-profitable avenues. It’s all about balance!
Examples from real business owners who pared down and pivoted
“I own a franchise business that was all brick and mortar when I bought the business. I realized that to reach our full potential, we had to go mobile. We flipped our franchise system to prioritize this.” - Cliff Kennedy, franchise location owner, Frios
“I started a global branding and digital marketing firm 20 years ago. The biggest change for me, my team, and my clients from the COVID-19 pandemic is the shutdown of all networking events, travel, and conferences. This is typically a very busy time with many events, trade shows, and business meetings on the road….
…For more than two years, everyone has largely stayed put and met virtually through Zoom or other platforms instead. I realized that pivoting to online meetings, webinars, and other digitizations is a smart and productive way companies can continue to have conversations that educate and inform, build relationships, and move forward during this crisis period.” - Paige Arnof-Fenn, founder and CEO, Mavens & Moguls
Step 3: Embody your new business identity
Embodying your new business identity doesn’t mean changing who you are or what you stand for. It simply means adjusting your social media, content marketing, and other forms of advertising, informing digital and in-person employees of the new approach, and making sure all existing clientele are aware of the shift.
Understand that you may have to employ change management, which comes with its own best practices. Change management helps businesses of every size navigate changes that may include pared down or pivoted approaches to the business plan.
There are existing change management models, like Kotter’s 8-Step Change Model and Lewin’s Change Management Model. However, you can create your own change management model using these existing resources as influence.
If you embody your new business identity correctly, you should see improvements in the happiness of your target customer base and key stakeholders (including any co-founders, investors, and management-level employees), an increase in cash flow, and boosted quality of products and services.
Examples from real business owners
Cliff Kennedy, franchise location owner of Frios, continues: “Now that we’re mobile, our franchisees are now able to go to multiple events in a day in their tie-dye wrapped vans and spread happiness one gourmet popsicle at a time. We now go to the customers rather than them coming to us.”
Paige Arnof-Fenn, founder and CEO of Mavens & Moguls, continues: “Using digital platforms, I have learned to help small businesses to be flexible and open minded so we can keep working together during the crisis and create more flexible capacity going forward over the next year as the economy fully reopens.”
Last word on paring down and pivoting your business
Change can be scary, but the prospect of long-term business success makes it all worth it. Even small businesses can benefit from paring down their offerings and focusing on what drives profit the most.
To recap, paring down and pivoting your business requires:
- Identifying your business goals so you can head into the process with a clear head about what you want
- Identifying your most profitable offerings and focusing on them (without abandoning revenue diversification)
- Embodying your new business model and employing change management best practices for a seamless transition
While you may feel like your business has a life of its own, remember: You are in control and can help your company adapt in a downturn, upturn, and everywhere in between.