Changing Direction When Business Strategy Isn’t Working. Entrepreneur MBA Podcast 3.8
Summary: In today’s podcast episode, Stephen Halasnik and Heather Saffer talk about their experiences as business owners with discovering a failing business strategy and how they got through the hardships that come with deciding to pivot. A big-picture business strategy is essential to a great business, but what may appear as a great business strategy at first can change in the blink of an eye. Companies need to be able to adapt, stay relevant, and keep growing in an ever-changing marketplace.
Why Do Our Strategies Fail?
A failing business strategy is never the fault of one single sector of your business or startup. It is more often than not a combination of factors in your current strategic planning that leads to its downfall.
At its core, a business is a network of people. Therefore, the failure of a business is often attributed to human error. If your employees are unclear on the business’ core values and business goals, your business may give off the wrong impression, mission statement, or message. In some cases, certain sections of your business could have entirely different outlooks or conflicting priorities. This is why effective communication tactics and proper coordination are necessary to a proper strategic plan and business execution.
These issues may sometimes reflect upon the managers or people we put in charge of large projects in our business. If proper leadership training isn’t in place or the management team created isn’t living up to its full potential, it may be time to consider creating better strategies to train your employees or to get different people on your team.
Your Business Model
Take a good look at your model from an outside perspective and try to figure out what it is about your business that is either unsuccessful or unsatisfactory. Sometimes, even if a business is doing well, it may lead you down an unhappy path.
Bad Business Strategy
A bad business strategy doesn’t just have to be just about poor profit. The point of owning your own business is to find fulfillment in your own way within the work world while making money. If you are dreading going to work on your own business, something has to change. You have to find a way to enjoy the work and the company you have created or your business and your self-esteem will fall.
A small business succeeds often because the business owners “will” it to happen. Take out that determination and your small business is finished. If you have lost your enthusiasm for your business then it is time to ask yourself some really hard questions.
Recognizing The Time For Change
Sometimes recognizing the need for a change within your organizational structure can be half the battle. There are four key indicators that your business is in dire need of restructuring or a change in strategic direction.
The most obvious factor: the numbers. Do a short-term business review. What is your cash flow? What is your profitability? Are you underperforming in your goals? Are your costs beginning to dwindle your margins? Take a hard look at all the numbers your business is generating, and then determine where those could improve and what sector of your business has the most impact on improvement.
Another indicator of a need for change is a change in your competitors’ success. You may start to notice smaller competitors in your industry begin to surpass your company gaining a competitive advantage or you might be seeing the larger competitors growing and you are not.
This is a sign that your business has not found its niche. If you notice this happening, time is especially valuable. You need to study your competitors quickly to see how they are acquiring customers. Find their “turning point”: when did they and what made them go from a small business to a large and visible competitor? Finding the answer to this question is crucial to figuring out the shift you need to make in your business.
Talk To Your Customers
The next step is to talk to your customers. Are your customers happy with your service? What challenges are they facing right now? Ask them what they think is missing in your business that they need? As cliche as it sounds, the customer is always right. If you can shift your business plan to give your existing customers what they need, not only does it keep your current base happy, but it may attract new customers who are also looking for the same changes.
Lastly, if you find yourself being unsatisfied with the work that you are doing, sit down with yourself and ask, “What is it about this business that I don’t like?” Once you answer this question, find a way to alleviate those insecurities by giving yourself a new role in the company or pivot] your existing model.
Get A Running Start
Once you make the strategic decision to make a significant change to your business, don’t second guess yourself. Start on your new plan immediately. Your decision-making in this process is crucial to your future success.
Research a New Market
Research your new market or industry vigorously until you are confident you and your new business template can handle the switch. Make sure you have the resources, the infrastructure, and the connections needed to make the changes you need to make.
The Leadership of Your Team
Ensure that if you have staff that they are fully aware of the pivot you are making and that your team understands the implications of the change. Get everyone that works for you or with you on the same game plan. Even if you haven’t implemented your changes yet, make sure you keep your workforce involved and informed about the process. While implementing your new business model, do not under any circumstances forget about upkeep for your existing model in the meantime. In the event, your plan doesn’t come to fruition or as fast as needed, you need your old model and customer base to fall back on.
Old and New Business Models
Work on both improving your current model and a new model at the same time for the maximum benefit to the shift. Above all else, stay alert and agile. Be aware of your old or new competitors and how you can beat them to the punch with your new strategy. Map out every implication, overcome every potential obstacle, and your new roadmap may turn your entire business into even greater success than it was.
About the Guest, Heather Saffer, Dollop Gourmet
Heather Saffer is the founder of Dollop Gourmet; a better-for-you dessert company that produces vegan and gluten-free lower sugar frostings sold in major retailers across the country. Heather graduated from SUNY Brockport with a degree in psychology and got her entrepreneurial start as the founder of the nation’s first create-your-own cupcake bakery. Heather has demonstrated success by winning Food Network’s Cupcake Wars, getting multiple offers on ABC’s Shark Tank, showcasing her products on QVC, and authoring two bestselling cookbooks, The Dollop Book of Frosting (Simon & Schuster/F+W Media) and Crazy Easy Vegan Desserts (Sterling Epicure). As a successful entrepreneur and self-taught baker, Heather has been featured in Forbes, People Magazine, Huffington Post, USA Today, Inc., Oprah, Hallmark Channel, Steve Harvey Show, and Sirius XM.
Heather sold Dollop Gourmet in 2019 to Mimac Glaze Ltd., an international leader in the gourmet icing industry. Heather’s current focus is on helping leaders and entrepreneurs through her speaking and consulting business, along with pursuing her passion for raising money for rescue animals through HeatherAndDonald.com.
About The Host Stephen Halasnik, Financing Solutions
Stephen Halasnik is the host of the popular, The Entrepreneur MBA Podcast. The Entrepreneur MBA podcast’s purpose is to help small businesses get over the $10 million per year in revenue mark. Mr. Halasnik is the Co-founder and Managing Partner of Financing Solutions. Financing Solutions is a leading provider of Lines of Credit to small businesses and nonprofits
Mr. Halasnik is a graduate of Rutgers University and has an Executive Masters from the MIT Birthing of Giants Entrepreneurship program. Mr. Halasnik has started and built 6 companies over 25+ years with 2 of those businesses making the Inc 500/5000 fastest-growing list. Mr. Halasnik is a best-selling Amazon author on business and regularly tweets about his ideas about growing a business. You can also find Mr. Halasnik on youtube talking about Entrepreneurship.
Mr. Halasnik loves small business. He lives in New Jersey with his best friend, his wife Gina. Mr. Halasnik’s number one purpose is raising his two boys, Michael and Maxwell, to be good men.
About Financing Solutions
Financing Solutions small business financing product is a great alternative to a traditional bank line of credit because it costs nothing to set up, nothing until used, and when used, is inexpensive. The credit line requires no collateral and no personal guarantees.
Small businesses use their line of credit to help with emergencies or opportunities when cash flow is temporarily down (i.e. Payroll funding)
Please feel free to fill out the no-obligation, 2-minute business line of credit application here. The time to set up a credit line is when you don’t need it so that it is ready to be used, just in case.
Note: Financing Solutions donates 10% of its profits to various nonprofit charities