So you’re a pivoting SME. It might not have been a 180-degree turn but you have responded to the pandemic by doing something new.
Like 21 per cent of the respondents in our recent survey, when coronavirus landed, you rapidly redeployed staff, adjusted your services or transformed production to meet new customer needs or welcome an entirely new group of customers.
You had the ability to invest in change as well as the staff and productive flexibility to pivot. You might have accelerated a pre-existing plan to diversify or you might have dreamt up a great new product idea under immense pressure.
Either way, the changes you made have allowed you to stay trading in some form. While these may not all be permanent changes, you have consolidated your position as an innovator and shown yours to be a positive-minded, proactive and dependable firm.
We’ve spoken to other business owners who are busy pivoting to find out what they’re focusing on in the short-term and how they view the future. Here are the key challenges and opportunities they identified:
Challenges for pivoting SMEs
- Making it sustainable. All kinds of formerly mundane products like l hand gel have seen a spike in demand. Will there be appetite for your pivot in six, 12, 18 months’ time? If there is, do you have the resources to continue to run both businesses or will you have to kill one to avoid being spread too thin?
- Managing your risk. As you reduce your exposure in one market you’ve taken on new risks elsewhere, particularly if you acted at speed or on gut feel without proper due diligence. From cybersecurity risks for new e-commerce players to the risk of losing your old customer base if you take your focus off them for too long.
- Aligning your team. Do your employees feel like all their past hard work is going to waste? Do they feel their skills are less relevant? Do new roles “feel right” to them? Do they care enough to dive headlong into the pivot with you? If your pivot is simply about keeping the business going and keeping people in jobs, that’s a powerful motivator.
Opportunities for pivoting SMEs
- You got comfy with innovation. Pivoting is all about acting first and asking questions later. Going back to first principles, relying on a hunch and embracing new technologies. These practices are not just useful in a crisis, they’re good for growth in general. A lot of business owners lose this ability once they’ve left the boot-strapping or startup phase.
- Go for good enough, not perfect. This is a great time to test things out quickly before they’re perfectly formulated or slickly designed because consumers are currently more forgiving. They know how hard businesses are working to keep going so if your new website or packaging is a bit basic or home-made, that’s OK, as long as it works.
- Develop your senior team. Pivoters are operating a whole new revenue stream through a period of high demand. It could be a good time to delegate some responsibility to someone else in your management team, develop their leadership and decision-making skills. If you pivot tends up being permanent, you might need someone to run it for you.
What’s next for pivoting SMEs?
There’s a lot of talk about bouncing back, but for some businesses, recovery isn’t going to be feel much like “bouncing”. In a way, Pivoters are already bouncing but the long-term trajectory is not yet clear. You’ve found a useful seam of creative energy and innovative scrappiness which is keeping you busy and keeping the money coming in. Enduring strength depends on many factors and as you go through the next 12-18 months, you’ll be alert to changes in customer demand so you can seize opportunities as they arise.
Like all surveys, our research puts businesses in clear-cut segments. In reality though, the lines between Hibernators, Strugglers and Pivoters are not static. Pivoting can be a means of survival and even businesses that are hibernating most functions might be testing out new ideas in some. Even today’s Thrivers might find themselves in a very different place tomorrow with changing guidance from government and the ebbs and flows of lockdown. Over the next 12 months you might move in and out of these definitions as we all regroup and figure out what the future holds. Eventually let’s hope you’ll all be thriving.
As you work through your own rebuild puzzle, here are the phases you might be going through:
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Dunsters Farm is a food service based in Bury, founded in 1963. Some 70 per cent of customers used to be in the education sector, with the rest being hospitals, restaurants and cafes. Coronavirus led to 95 per cent of its business drying up.
In response, Tom and Hannah Barlow, the brother and sister team at the helm of Dunsters Farm, moved into business-to-consumer (B2C) sales and immediately started building a new website for their own online shop. They wanted to grow into the home delivery space and had been thinking about this, but with the business growing in current markets it was hard to find the time.
It was demand from the company’s own staff that gave Tom and Hannah the encouragement to press go, with the website now up, running and taking orders. They are also actively partnering with local small suppliers to expand range for home-based customers – a bakery in Stockport, a pie and cake maker in Bolton, a dairy base in Manchester.
Listen our full interview with Tom
Flower & White is a food production business based in Telford which specialises in handcrafted meringues. Husband and wife team Brian and Leanne Crowther have spent ten years building the business and growing rapidly, with a recent factory move meaning they now operate out of a 13,000 square foot factory with 25-30 employees.
The two have so far been able to keep the factory open, and are making lots of decisions very quickly. The business knew it needed to reduce its exposure to gifting market. Thinking creatively, and reacting to market trends, Flower & White teamed up with a local supplier to create direct-to-consumer (D2C) home baking kits – recognising this could be an area of growth. It also brought in a new social media company to help drive online sales and help with cash flow. Facebook followers have already increased by 18 per cent and Instagram by 22 per cent.
The business has launched nine brand-new products with a yeast offering arriving soon. Online orders are up 800 per cent including products on their way to the US. Brian and Leanne haven’t furloughed any front line staff and are actively recruiting. With an eye to the long-term success of this pivot, they’ve taken on three new wholesalers for longer-term opportunities.
Listen to our full interview with Brian
Cube Video is a Maidenhead-based animation agency specialising in creating content for business and brands. It previously did a lot of physical shoots at offices, on location or at events, but has now had to adapt. Shifts include utilising previously shot content in new ways, giving guidance and training on how to film at home, and promoting additional animation capabilities.
The business has also been making smaller pushes like activating business through its old newsletter database. Additionally, James is using some free time now to focus on the business and plan future pieces of work so they can come out of this fast, “like turning a switch back on”.
Cube have launched four new product offerings since lockdown which have all be taken up by clients. It has also implemented a new social strategy that has amassed over 16,000 views on LinkedIn content in the past few weeks, with an increase of 99 per cent on impressions. The success of its pivot led to the business becoming a confirmed COVID-19 Crown Commercial supplier, leading to project with the local council for a food bank initiative.
Watch James describe his company’s pivot efforts