“Should we pursue this opportunity?”
This was the question I was asked by a young business owner who’d recently been presented with an opportunity to pivot his existing business. This young man and his brothers had tragically inherited their father’s business when he passed away unexpectedly, leaving them to lead without much notice or preparation. The business, which was thriving under their father’s leadership, survived his loss with some outside help and a lot of tenacity from the brothers. While it continued to be profitable and stable, eventually the business stagnated. It was during this period that they were presented with an opportunity that wasn’t directly connected to the core of their business, but was related to one particular product. Wisely, their hunger for new territory was tempered by honest questions about their capability and vision.
Most business owners will eventually (if they haven’t already) find themselves at a similar turning point. Perhaps, like my client, someone in your network presents you with a compelling tangential opportunity. Or maybe your business stalls and needs to expand its reach. Or perhaps your own entrepreneurial spirit keeps you edging toward new horizons. But no matter the reason you find yourself considering a change, it is important to thoughtfully consider the value and risks inherent in the opportunity.
If you are considering a substantial pivot, here are a few important questions to ask yourself:
WHY am I considering this pivot? What is my REAL motivation?
How far is this pivot from my current core competency? Does this lie within the current scope of my business, or am I reaching into new territory? Is this a distraction from my main business?
What is keeping me from pursing this pivot? Is it just fear, or are there real red flags?
HOW will I pursue this business? What is the financial cost? What else will be required to make this pivot possible?
In working through these questions, it’s important to remember that:
Money should never be the ONLY reason to pivot a business.
Money should never be the only reason NOT to pivot a business.
For the young business owner I was helping, it became clear that the presented opportunity was valuable both for its profit-generating potential AND for the health of the business at large. While there wasn’t a lot of existing capital in the business itself, there is always money to be found. After evaluating the potential profitability of the opportunity, we determined the appropriate financing option and funded the project. The company pivoted, and eventually saw so much growth and revenue in the new project that it has now become the core of their business.
Making tough decisions about new opportunities is inherent in business ownership, so learning how to ask the right questions, either with your team or a trusted advisor, can free you from fear as you continue to build and hone your corporate vision.
