With a business that is not quite working, is it better to start new or to pivot?
If your business is not working well enough, should you change directions or start a new business? I have been reading up on pivoting your business in a new direction, but how is this different than just starting over? Is starting over with a new brand better? How do I figure out which option is better?
There are some great answers here. Businesses need continuous change and at some point a major rethink. That doen't mean it is to be discarded but must be redefined for the next phase of growth. So the question you need to answer is really if it is the end of the road? Or is it just a turning point? Without assertaining that, to start an altogether new business is writing off potentially a large terminal value of a significant investment.
Sometimes, you just need to assess if your, product positioning, pricing, strategy and organization are not aligned to the market realities. Just fixing those issues will immediately yield results.
The major component in pivoting as opposed to starting over is that you would have established customers. Starting over would mean getting customers. Pivoting means you used the assets of the established business. You can transfer your assets, including client bases, to you new business but you have to start over again. Pivoting would include tapping into the established assets and using them to your advantage. An example is to start new means new marketing, new advertising and new everything. Pivoting would be redefining the business and changing the marketing, advertising and all else.
A personal example involves website deals made in 2000 by me and my partner for a company with magazines and movies. These are tangible items which had intellectual property (which is intangible). It was easily migrated to the web. When no longer needed we pivoted our efforts back to tangible items. Me and my partner started to produce magazines which would promote the websites, advertise the intellectual property as product in the actual magazine and sell the tangible products in the magazine. Instead of starting over we took the assets we had to produce income in another way. We got paid for the magazines and got free advertising. If we started over we would have lost countless hours and dollars.
I'm going through that myself, and I'm pivoting. I have a "graphic design" business, and it's going nowhere. I've always had a passion for knitting, and now THAT's what I do! Same name (Katmandu Studio), and I'm knitting and developing pattern for sale.
Firstly, I would look into the potential of the business in your area .What many people here do not consider, is the fact that your business has to do well in the area where you have to work. Example: I worked for a Japanese Automation company who makes the small equipment which come with pneumatic automation systems. I was first sent to HO for 30 days where I went through various technical as well non-technical training ( I am a Mechanical Engg graduate). After a month, I came down to my area and found that there was simply no automation industry requirement there. Those marketing honchos had simply taken for granted that the market exists, by the average figure,whereas Industries tend to be situated in lumps, making the area density very high or very low.Well, I worked there for about 4 years and I luckily survived by concentrating in a high value item which wasn't selling well...Anyway-that's another story and I gave the example only because I wanted to point out that the 5P's of marketing are really very very mandatory.
If you find that the market exists, then you have to start over with a new brand. There is NO OTHER OPTION.You had made a positioning error. Your existing brand will already be there in the buyer's mind and I fear that the picture will not be very attractive. Going with the same brand is a no brainer. Just think and put yourself in the customer's space. Say you had never liked a particular brand of X. So, if you see the same brand, with "now improved" written on the pack, will you buy it.? You won't because in the first impression of the customer was that you're a jerk. So, the best he'll think that you're now an improved jerk. Go ahead with a new brand, position it properly-the less populated the better-fix a good price(remember, price can come down easily but it has a tremendous liking for gravity. Making it go up will be tough-maybe the toughest part of marketing your product.)
Make your ad line reflect the mood of your target population ( not what you think reflects the mood but actually what reflects the mood) and start with a bang. All the best!
I have many clients face such problem, but each of them have they uniqueness. Your case is also unique, I think without detail to analyze your case, we just give you a long list of options which most of them will not fit your need. I suggest you try to structure your information specifically first. If you find it is not wise to publish in public, look at consultants near your place and share the information with them. You should get much more better advise.
The issue of evaluating your best option is highly dependable if you deal with physical product(s) or service(s). Considering also the market you are into, your networking, your clients, purveyors and other stakeholders. Then, revenues, P&L, market insertion, branding, knowledge of the supposed new business (pros/odds) and many more. So, your have a hard homework to do, brainstorming, benchmark and other flat issues. Besides your intuition and perception. Considering what I said, I would rather say go into a new direction rather than start something completely new. It's better to have a bird in your hand than two f lying around. Unless you haven't disclosed your misfortunes and losses...
My first thought would be to pivot, as it would seem this could be a lot less work than starting from scratch on a whole new option, but it really depends on what your business is and whether the new direction would be relevant to your current target market. Are you currently offering something that solves the 'right' problem? Perhaps doing a bit deeper dive on the market research within your target group would help make that decision, or maybe your target group needs to be expanded upon in some way - maybe all that is needed is a slight adjustment to what you are already doing.
I started over from an old company I founded myToday.asia - just carried off the intellectual capital and went guerrilla like Conan O'brien after he quite the Today show. Laying low for awhile or taking it easy after you scrape off all the gold from your past venture is a natural thing. Maybe it will attract new capital.
Finding a formula that fits is always a challenge. Until you have a succesful business pivoting is probably wiser. In the long run, if none of the products or services you try succeed then maybe try a different business.
"Well enough" is subjective. Business changes all the time and we must change with it. I always use a filter on my ideas for change and direction of "whats in it for them?" Sell what they want not what you make. If you still like the business you are in tweak it. If you don't have heart in it leave it. Not every swing at the plate will be a home run. After all baseball players are great when they fail 70% of the time. There are all sorts of experts out there but its up to you.