Transcript Episode 94

E94 – How to Successfully Pivot Your Business
[00:00:00] Welcome to the 100 degrees of Entrepreneurship podcast, the show for purpose driven entrepreneurs who wanna get inspired to step outside of your comfort zone, expand it to your purpose, and grow your business in a big way. I’m your host Stephanie Kowski, a globe TRO cfo, whose mission is to empower leaders to better understand their numbers, to grow their impact and their income.
Let’s dive in.
Hey friends, Stephanie here, and I’m coming to you today from my home office. Again, if you listened to my last two episodes, you might have noticed that the sound was a little bit funky and not quite as high quality as it usually is, and that’s because I was travel. I’ve been traveling so much, um, really since September.
I feel like ever since kindergarten school kicked off for my little one, I’ve [00:01:00] just been oh, all over the place on the road. It started with a mastermind retreat with Rachel Rogers in the Hello seven Mastermind in Greensboro, North Carolina. And then it was my, um, my wedding anniversary, and then I hosted my team for a leadership retreat in Nashville, immediately followed by shooting down to Erie, Pennsylvania to.
Present at a conference, and then I was over in Louisville, Kentucky for presenting a couple sessions at another conference, and then I popped back down to Nashville for one day, like in that morning, out that night for a really exciting meeting. And here we are, it’s mid-November and I don’t have to get on a plane for another month.
And so I’m home. I’m here in my office. I am starting to think about, um, 2023 planning, and I’m sitting down to talk to you and [00:02:00] I’m really excited to do that. So we have better sound today. My, my sound engineer, my podcast editor will be very happy about that. Hi Brian. So anyway, what we’re talking about today, Is pivoting in your business.
So, funny story that’s not related to this, but kind of many, many, many years ago when I was in like the first maybe six months or so of running my business, one of my clients was, um, a non-profit and they were hosting a workshop for some of like the people that were in their programs. And so they asked me to come and talk about finances and managing your finances and that kind of thing.
And so I. Oh my gosh, I was so nervous. It was a workshop of maybe like 20 people and. You know, in a relatively small space. So it wasn’t like super intimidating in that way, but I had never really spoken before on my field of expertise, and now I feel like you put me on a stage for an hour. I could [00:03:00] talk to you about finances all day long, but back then it was very, very scary.
So I was already nervous. I had my slides. I went through my presentation and there was a q and a at the end. And I specifically remember, I will literally never forget this question and somebody asked like, what happens when, when you pivot in your business? Or something along those lines, like, what happens when you pivot in your business, or how would you handle a pivot in your business?
and I had no idea what they were talking about. I had never really heard the term pivoting in your business. I now know seven years later, that’s a very common term and that’s exactly what I’m gonna be talking about to you with you today. But it was just so funny, like. How do you pivot in your business?
I’m like, what do you mean exactly? And or I said something like, can you explain more? Something like that. They’re like, yeah, you know, when you’re like gonna do something different in your business from what you were doing before. I’m like, oh, okay. So yeah, that was embarrassing and I will [00:04:00] literally, anytime I hear the word pivot, that’s the first thing I think of is like my silly response to that question and not knowing what in the world they were talking.
So anyway, I’m talking about pivoting in the business in your business, and what I mean when I’m talking about pivoting today is really just like shutting something down or doing a kind of 180 degree change from what you’re doing right now. And maybe it’s not truly 180 degrees, maybe you’re, I’m not.
Talking about doing the opposite of what you’re doing now, but I’m being kind of a drastic change, right? So I’m not talking about something minor like, oh, let’s add on this service, or Oh, let’s take away this, you know, particular offer, this online course. We won’t offer it anymore. That’s not what I mean when I say pivoting.
I mean, um, maybe you’re a service provider and you’re gonna go all in on courses and you’re gonna shut down the service, you know, providing that you do that part of your business and you’re just gonna do online courses. Or [00:05:00] maybe you are a full service digital marketing agency and you are gonna focus on, you know, social media advertising and shut down everything else.
Or maybe you are a bookkeeper and you’re gonna do something entirely different. Maybe you’re gonna go into, um, copywriting, right? So, I mean, a major shift in your business and. I would just encourage you to think for a second, like, have you ever gone through a pivot before or have you ever wanted to? I know I have.
I feel like there have been many times I’ve wanted to just like burn it all down and pivot into something totally different. Like, oh, maybe I’ll open up a spa. Right. I’ve never actually, I’ve never done that. I’ve never done a major pivot like that, but I have had. Some really interesting conversations and thoughts about pivoting.
And so the triggers that come up for me and what you should be thinking about and like, is it the right time to make a big change in the business? Um, and I think there’s two ways to think about [00:06:00] this. Um, one is like, okay, it really is the right time and we’ve sort of verified, verified it in many different ways.
And the other is, Okay. Am I just like overwhelmed or scared or confused right now, or just like I just need a break? Maybe you’re burnt out and that’s not necessarily a reason to pivot. So if you’ve been thinking about pivoting in your business and shifting things around, I would just encourage you to think about why Is there something in your business that you have worked on and you’ve tried and you’ve iterated and it’s just not working right.
I’ve had that in my business before where I was trying to. A membership to our offerings, a membership centered around financial management for entrepreneurs. And it just really never took off. And so I wouldn’t really consider that a pivot because it was never really a big part of my business. I just sort of shut it down.
But think about that in your own business. So when to think about pivoting like I. If you’ve done [00:07:00] everything that you could and something is still not working right, you’ve put the money in there, you’ve put the resources in, you’ve put the time and time. My friends time, cuz I know we all wanna like burn all the things down if it doesn’t work after four seconds.
Yeah. Talking about myself, um, . So you know, if you’ve put the time, the energy, the money, the resources into it and it’s not working, maybe that’s a good time to pivot. Maybe you’re over it. And that could mean a number of things, like your view of the industry, the industry that you’re in. Maybe you don’t wanna be a part of it anymore, or perhaps you feel like you’ve sort of hit the end of the road with the work that you’re doing and you’re ready to do something new.
That’s another like great time to think about pivoting. So I would just encourage you, if you’re thinking about this, that it’s not necessarily. I’m burnt out, I’m overwhelmed. I like, ugh, I just don’t feel like doing this anymore versus an actual, like a really good reason for [00:08:00] doing it. And so, thinking about that, you know, I, I’ve done a lot of thinking recently about the vision for the future of my business and thought about some different pivots and some different options and different roads that we could take.
And I always ask myself the question, Have I really given this everything that it needs? Or am I just like bored, right?
You hear me talk all the time about how important it is to know your numbers as a business owner, but you may be thinking, well, how in the world do I do that? Where do I even begin? So I have a free resource for you. The Profit Playbook is an amazing template. You spend about 15 minutes getting it all set up and you can literally see into the future of your business.
Revenue expenses, cash flow, just like a crystal ball. It is a huge resource that will absolutely help you create a roadmap to reach your goals in your business. It is for free over [00:09:00] at 100 degrees
Once you’ve made the decision, once you’re like, okay, this is the right thing to do. I know it for so many reasons. How to do it less scared, I think is huge. And this is something that we help our clients with all the time because they’ll come to us, our clients will come to us with an idea and say, okay, I wanna make this change in my business, but I am not sure it’s the right thing to do.
I’m scared and. I just don’t know. And so the thing that we always do, cuz you know we’re finance people, we pivot with a plan, right? And so the first place we go, where do you think raise your hand the numbers. So what I always like to do is analyze the current situation because sometimes we think things are worse than they are, or we think they’re better than they are, right?[00:10:00] I was just doing this with a client. I’ve done this, you know, with my own business. We do this with clients all the time, but just recently we really assessed multiple revenue streams in the business. Looked at all of the revenue, every piece of revenue coming in for that revenue stream. Um, not only for this year, but last year as well.
And we looked at all of the expenses, and I did this for my own business. And in particular, I really went. Detailed with the expenses. So not just like the easy expenses, but also the sort of like the unspoken, those quiet expenses, the significant time. But that’s maybe like a little less quantifiable that I was spending on that particular, you know, on that particular activity or that particular revenue stream.
And so really getting. Thorough with the expenses or the cost, whatever is going out the door, whether it’s time or money or whatever for this particular, you know, activity and then [00:11:00] looking at the profit, right? So I always start there with an analysis of the numbers before I determine like, okay, am I going to shift gears and.
When I said I had that membership, the whole catalyst for me to let that go and my friends, that was painful. I put a lot of time and energy into that thing, and so just making the decision and saying, this is not the right. Thing for my business anymore was really hard and really scary. But what made it less scary was looking at the numbers, I’d looked at my numbers and realized that it accounted for like 1% or 2% of my annual revenue.
And I was like, but that accounted for way more. Than one or 2% of my time. And so that was really not aligned, and that gave me the confidence to say, all right, we’re pivoting. We are moving away from this. This is not gonna be part of our business model going forward. So that’s really [00:12:00] helpful to start with the numbers.
So if you’re thinking about change, I think assessing the current situation to just confirm that you’re really making the right decision in moving away from that is a great first step. Oftentimes our intuition or our gut is telling us something and then the numbers will just verify it, right? Like some, we had a feeling that something just like wasn’t working out and then the numbers said, yep, you’re right.
It’s not working out. As entrepreneurs, we’re really at tuned into our businesses, and so like a lot of times we just know, right? But the numbers give you that. Like, you know, we’re checking the box. They give you that discomfort level that, okay, yeah, I was right. This is definitely the right thing to do, and you’ve got the confidence to then move forward.
So that is a really great place to start. So even if you don’t know exactly what’s next, you do know what you’re moving away from, right? And so pivoting with this plan is super important. And so if you’re thinking about, we just looked at what [00:13:00] is already happening, right? And assessing the current situation.
But now we need to think about, okay, well what are we moving towards? Right? And so as you’re thinking about what you’re moving towards, I think we want to first of all, like not just go for the grass is greener type situation, right? We don’t wanna just sort of run to the next thing that looks like the low hanging fruit that looks easy, that looks like, oh yeah, let’s just do that cuz it seems like.
Everybody else is doing it. Seems like that would be easy, right? Let’s run the numbers. , you are probably so tired of me saying that. Thinking about, we’ve just run the numbers of what we’re possibly pivoting away from. Now let’s run the numbers into what we’re possibly pivoting towards, right? And so looking at, okay, what is our revenue potential here?
And I personally, you know, I love numbers, so I’ll crunch numbers all day long. But I really like to look at both like best case scenario because looking at those big [00:14:00] numbers, those fun numbers, gets me like so fired up and excited. To like dive into that next thing. Now, you may or may not be motivated by those numbers that may or may not excite you, but I always like to think about what is possible and so I do like best case scenario numbers.
Then I also run a little bit more realistic numbers, really understanding that with a new venture, there’s a lot of ramp up time and. Maybe things aren’t gonna sort of grow or scale as fast as you want them to. So running some realistic numbers and then again, thinking about expenses as well, right? What do you need to spend?
What resources do you need in order to make this new thing happen? And then understanding your profit, right? So I really like to look at. Where we are right now and just use the numbers to verify what my gut, or what my intuition is telling me I need to do, which is, you know, I’ve definitely done that before.
And then, um, running the numbers on whatever [00:15:00] else is. Next. Right. Whatever you’re pivoting towards. That way you’ve just got so much more clarity and confidence, knowing that it’s the right decision, that there is a financial win on the other side, that there’s a, an ROI on the other side, right? Um, and so pivoting with a plan just gives you like so much more.
Confidence in making that decision. And so the plan is not set in stone, right? It also leaves room for adjusting course if things don’t exactly pan out, right? Like we can always rerun the numbers. We can always think about different scenarios and different options, but again, we’re starting with something rather than just sort of, You know, making a decision and running it.
So I hope this is helpful. Um, you know, I think at the end of the day as a business owner, as an entrepreneur, only you are going to know, or maybe you and your leadership team are gonna know when it’s the right time to pivot, right? You’re gonna know once you’ve exhausted all of your [00:16:00] options on a particular, you know, down a particular avenue, you’re gonna know when it’s time to like throw in the towel, basical.
And I would just encourage you, like, you know, when I had to let go of my membership, it had been around for a while and I knew that I had put everything into it so it didn’t feel like giving up. I was just gonna say, I, you know, I don’t want you to feel like. Giving up or feel like you’ve lost or that you failed somehow because you didn’t.
I mean, I don’t know any business owners who are 5, 10, 20, 30 years into their business. Not saying we’re all gonna be here in 30, 30 years doing the exact same thing, because I don’t know any business owners that are still doing the same thing, even five years down the road. From when they started, right?
We’re all gonna pivot, we’re all gonna shift. And I think that’s important to keep us fulfilled as, um, you know, as professionals, as just like creative human beings in general. That is what is going to help us continue to thrive and continue to be lit [00:17:00] up by our business. And so if you’re thinking about a pivot, First place to start.
Start by assessing where you are right now. What are you pivoting away from, and make sure the numbers kind of line up with your intuition. And then what are you pivoting towards? And make sure the numbers like speak for themselves, make sure the numbers work. Um, I’m just thinking of another. Another, uh, project I did with a client where they had a new business venture idea and I loved the idea.
I loved it so much, and so I was really excited to put together a financial model for them and basically show them, um, what it would take for them to be profitable. I. And once we ran the numbers, we realized, oh, it’s actually gonna be like way harder and it’s going to take a lot more to make this profitable to a point where we wanna actually invest in it.
Right. So it’s gonna take a lot to get us to that point. And so I’m not sure if they are still pursuing it, but I do know it [00:18:00] sounds like. You know, the, the process sort of slowed down a little bit because the numbers sort of spoke for themselves. And so before you dive head first into a new venture, before you pivot into something, you know, maybe with a big investment of time or money or resources or whatever, um, understanding and making sure that it’s really gonna pan out.
Because again, this particular project I’m thinking of was, Genius idea. I really love the idea. I still love it. Um, but the numbers weren’t working the way that the business model was laid out. And so before you pivot, pivot with a plan, have those numbers crunched and pivot with a plan. So anyway, my friends.
I know that the, the unknown, I know the business is scary. The unknown is scary. Dropping something in your business is scary. Um, but what makes things less scary is having a plan, seeing black and white numbers on paper. So I hope this was helpful. I [00:19:00] would love to know if you’re pivoting in your business or if you have before, what are you pivoting towards?
What are you pivoting away from? Um, what are, what are you working? Anyway, you know where to find me, friends, I’m over on Instagram at Stephanie dot s k r y, and you know our website, 100 degrees And uh, you probably heard the shout out already in this episode, but our profit Playbook is a really great place to put some numbers, drop some numbers in there in terms of what you’re thinking for your pivot.
Put the numbers in there, put the scenarios in there, and you’ll be able to see, okay, how does this impact my cash flow? How does this impact my bottom line? My. And that template can help you do that, so you don’t have to just sort of stare at your cursor in a blank Excel document. Um, we have a template already for you Anyway, my friends, thanks for listening today and I’ll get you next time.
Thanks for listening to the 100 degrees of Entrepreneurship podcast. To access our show notes and bonus content, visit 100 degrees [00:20:00] Make sure to snap a screenshot on your phone of this episode and tag me on Instagram. At Stephanie dot s k r y, and I’ll be sure to share. Thanks for being here, friends, and I’ll see you next time.