According to data from the US Bureau of Labor Statistics, about 20% of US small businesses fail within the first year. By the end of their fifth year, roughly 50% have faltered. After 10 years, only around a third of businesses have survived. These numbers can be daunting, but there are actions you can take to pivot your business model towards success.
Having a pivot strategy in place is key when managing a business because you can’t stay too reliant on old techniques; if you do, you’ll be left behind your competition. We recently chatted with Daymond John, founder of FUBU and star of ABC’s smash hit, Shark Tank, about what businesses can do to reinvent themselves.
Below are some of Daymond’s top tips and insights for pivoting your business.
📚 Is your business struggling from the pandemic? Daymond John shares advice for small business owners on how to thrive during uncertain times.
1. Educate yourself
Daymond shared, “Reinventing yourself and/or pivoting is about educating yourself.” When it comes to owning a business, you can never stop learning. Whether it’s the marketing side or the operations side of your business, get familiar with the ins and outs of your business, competition, and market.
For example, Daymond took on a digital marketing course and was eager to continue his education.
“I love bragging that I’m now taking a 28-hour digital course on digital marketing. Why am I doing this though? Is it because I don’t know how to market digitally now? I’m pretty good at that, and I have a team. The thing is, the more I know about it, then the less I have to depend on third parties or other people when I’m looking at other investments or campaigns. And after this, I’m going to take a Facebook course, then an Amazon course, then a ClickFunnel course, and I’m going to keep doing it. And I’m not sure where that’s going to lead me. It may lead me to understanding the market or a new investment a little bit better. So, you’re going to add this knowledge to your business or your mental Rolodex. It’s about educating yourself, and I don’t care what aspect of education. You just have to keep doing it.”
Atop of educating yourself through courses and workshops, remember that you’re constantly surrounded by others you can learn from, especially your team. Once you’ve gained new knowledge from multiple sources, apply your key learnings to your pivot strategy.
2. Hack your business
The one constant is change, and businesses have been forced to adapt to new scenarios. When brainstorming your pivot strategy, think of how you can hack your business.
A perfect example of a company that hacked itself is Netflix. Netflix used to email DVDs to your mailbox, and now, DVD players are a thing of the past. The company evolved itself to become a leading digital media platform. Other companies then followed suit, such as Amazon Prime, Hulu, and Disney+ to name a few. How people digest content today is a result of one company pivoting itself to keep up with the times.
Daymond discusses the importance of hacking your business similar to Netflix.
“Netflix realized how to hack themselves. But there are big businesses that got too comfortable and didn’t hack themselves. How are Blockbuster, Kodak, or BlackBerry doing these days? We know they’re not around, right? Why? Because they didn’t hack themselves. In order to pivot, you’ve got to hack yourself. Keep punching holes in your business to make yourself better.”
If you don’t know where to start, focus on a key feature that your business offers. Build upon your strengths and find new ways to market or improve your key features, instead of spreading yourself too thin with an entire portfolio.
💰 How much do you think a 1:1 coaching session with Shark Tank’s Daymond John would cost? For you, it’s 100% free. Watch this free webinar to hear Daymond’s business advice.
3. Listen to customer complaints
Sometimes the answer is right in front of you: your customers. Customer complaints can contribute to your pivot strategy and help guide your business in the right direction. Don’t be scared of customer complaints. Instead, run towards them with open arms and adapt your offering to customer needs or pain points.
Daymond shares why customer complaints are so valuable for businesses.
“Customer complaints are extremely valuable. They’re extremely important, and it’s an investment in your company. A lot of small business owners, I notice, don’t take customer complaints lightly. They just go, ‘Well, we’re not for you.’ No, that’s not the case. A customer, if they don’t complain, that’s the worst thing ever, because that’s actually an investment. And if you look at large corporations like Heinz, they realized that you have to hit their glass bottle five to seven times to get it out right. And you’ve got it on your shirt, your tie, and on the kids. They went around to everybody’s house and looked in their refrigerator. You know what they realized? Everybody had their Heinz bottles upside down in the refrigerator. So, what happens now? Now you go to everybody’s house, and it’s plastic and upside down on a base—and Heinz increased their profit margins dramatically and came back to becoming number one in the space due to customer complaints. So, people have to think about these things when pivoting.”
Need help with addressing customer complaints? Get tips on how to figure out the right type of customer service for your small business.
4. Communicate, communicate, communicate
Communication is a two-way street, and when it comes to customers, you need to give as much as you get, if not more. With technology at your fingertips, from social media to digital communication tools, there’s no excuse to not connect with your customers and show that you care.
“Communication is definitely two ways. Technology is great, but guess what? Everybody can reach out now. So, you got to beat people to the punch, and you’ve got to really show that you care. And that only doesn’t go for just your big customers. Listen, when you’re dealing with social media, you get a bunch of likes, you better like them back. You better follow them back. How would you like to say, ‘Love what you’re doing here!’ And nobody says thank you. You’re going to do that once or twice. After that, you’re going to say, ‘You know what? I love what that person is doing [over there].’ It’s something that you have to give as much as you get.”
Find new and existing customers and start speaking their language. Make sure to communicate with your customers more often, whether through social media, video conferencing, phone, and/or messaging.
As part of your pivot strategy, upgrade to a leading communications system—you want one that is mobile-friendly, reliable, and scalable. The last thing you want is an old, dated system that can hurt the client experience.
🕹️ Get a hands-on look at how RingCentral works by booking a product tour:
💰 You can also use this calculator to see roughly how much your business could save by using RingCentral to support your team’s communication with each other, clients, freelancers, and more.
Start building your pivot strategy
As you build your pivot strategy, keep Daymond’s words of advice top of mind. He’s a trusted source, given he’s globally recognized for his relentless commitment to promoting and supporting entrepreneurs.
Remember to continue learning, hack your business, prioritize customer complaints, and communicate frequently. Strategize with these top tips, and you’ll be better prepared for your next move.