Honey, I shrunk my business!
Have you ever had a fabulous idea for your business? Either someone with superior insight has heard what you do and said, ‘oh you should try x!’ Or you’ve suddenly been struck by a eureka moment at 3am in the morning. Sitting bolt upright you yell ‘Great Scott, I’ve got it!’
Either way you have a genius idea for your business and you launch yourself into it with gusto.
But it BOMBS.
Your new service is an absolute pig to sell. Or worse that that, it sells but you hate delivering it. Or arguably even worse, it sells and you’re busy, but you’re making less money than you were before!
If this has never happened to you then, lucky you! I see it. All. The. Time.
Because it’s easy to get swept up in the excitement of a minty fresh idea and not stop to think about whether it’s in line with what you’d envisaged your business direction to be.
Granted, unless you possess psychic powers, it’s impossible to predict how a business decision will play out. BUT there are ways to get a handle on the scale of what you’re taking on. As the responsible business owner that you are, it’s your duty to do so.
In this blog, I’m going to run through the 3 most common accidental business decisions that I’ve seen, how to spot them and when they might not be such a bad idea after all.
This isn’t just newbie business owners I’m talking about, these trip-ups can creep in at any stage in business.
Accidental business decision no.1:
Changing your target audience to one that you don’t understand and who don’t know you
Example of accidental business decision no.1
Jem is a stylist for men. She’s excellent at what she does and her clients always come back for more. They value her services and are willing to pay her the big bucks. One day a bright spark says ‘hey, you should dress men for their weddings!’
Makes sense, right?
For a year Jem spends time trying to get coverage in wedding magazines, building relationships with other wedding suppliers and spends hundreds of pounds attending wedding exhibitions to whip up some interest.
It’s a hard slog with very little to show for it. When she does land the odd client or two, they want a one-off service. They only wanted to cough up for their special day and have no intention of ever using her again. Worst of all, it’s taken her attention away from her core client base; moneyed corporate blokes with panache.
In this example Jem has inadvertently pivoted towards a new audience.
Reasons why changing your target audience can go wrong:
- Your new audience has different budget expectations.
- They have different needs, different usage occasions and different demographics.
- They have different problems; if you don’t know your new audience very well, you’re going to have to go back to brass tacks and start from the beginning. What are they struggling with? How do they articulate their struggles? Messaging for your old audience might not work with your new one.
- They’ve never heard of your services; you end up having to do a huge education piece before being able to sell.
- They’ve never heard of you, targeting a new audience can mean starting that audience and relationship building from scratch. BLEURGH!
Times when changing your target audience can work:
- When you’re not enjoying your work with your current client type anymore and you’re more excited by the new audience.
- When it’s hard to sell to the people you’re targeting e.g. you’re having to extensively explain your value to them
- When you feel like you’ve left your current audience behind. I’ve seen this with social media trainers, as their business matures, they want to talk to increasingly sophisticated business owners. Such customers won’t need to know how to get engagement on Facebook or how to do video anymore. They’ll have either worked it out by now, or be getting someone else to do it for them.
Accidental business decision no.2
Launching an offer you hate and which your current audience doesn’t want
Example of accidental business decision no.2
Kim is a copywriter and can generally be found, coffee-in-mug, rattling off scintillating blogs for time-starved entrepreneurs. She’s always loved writing and enjoys the introvert-friendly nature to her work.
She notices another writer, seemingly rolling in it, who’s teaching other people how to write blogs. ‘I can do that! I write better blogs than them too.’
Utter no brainer!
So, she crafts a blog writing masterclass and dreams of all the passive income she’ll be making when she converts the video into an online course.
She’s pleased when she manages to sell 20 places to her masterclass but wishes she’d charged more than 50 quid for it because she’s having to hand over every penny of the £1k revenue to a tech expert. Converting it into an online course was more time consuming than she’d bargained for. Never mind the sales sequences, taking online payments, automatically delivering the course modules blah blah blah.
Once the course is ready, she finds that she lacks the time and energy to sell it. To rub salt into the wound, a few warm leads who were thinking about paying her to write their blogs, buy her cheapo course instead. Bugger!
Reasons why changing your offer can go wrong:
- Often, if you’re changing your offer significantly, you’re unwittingly targeting a different customer group too. Indicators of this are if the pricing is very different or the way in which you’re delivering the service is different. In this example, going from done-for-you to DIY.
- Even if your audience remains the same, you might need to educate them as to why this new offer time is right for them. That takes time and energy.
- If you haven’t thought ahead of the full ramifications of what you’ll have to do to sell the new offer, you might be surprised that it involves activities that you hate.
- It might cannibalise your current profits, as with Kim’s course. This can happen if your current audience thinks your lower priced offer is a better fit.
Times when changing your offer can work:
- If you’re ready to move on or expand your current service range.
- If you want to introduce a lower or higher tier of service into your portfolio and you’re confident that you can position the different offers so they don’t cannibalise each other. This is a great way to catering for your idea customers at different stages of their buyer journey. In other words, someone who’s not ready for your VIP 121 service might want a DIY course first or group programme.
- If you relish the challenge of launching something new, you’re prepared for the new direction it’ll take you in and you’re not going to over complicate your business model. More established businesses who have a team to help deliver new services, can handle a more complex mix of offers.
- If you have the budget to outsource the bits you hate!
- It doesn’t need to be an either/or thing, just bear in mind that it’ll take much more time and energy to keep two audiences going at the same time.
It is possible to have a whole range of different services selling quite nicely alongside each other, as long as you’ve crafted each one to solve one problem for one client type and the positioning of each is clear. And you have the time, energy and resources to manage them all!
Accidental business decision no.3
Changing your target customer type and offer
Example of accidental business decision no.3
Aja trains entrepreneurs on how to use social media to get more leads and sales into their business. One day she thinks, ‘hang on a minute, corporates have got more dosh!’, so she starts targeting corporate clients with her services.
She’d be mad not to!
But once she gets going, she realises that she doesn’t have any links to the corporate world any more, they have long, drawn-out procurement processes and they have a tighter grip on their budgets than a toddler clutching a lolly. Plus she finds herself having to massively change her offer to accommodate their peculiarities.
Now it takes more effort to get fewer sales and she doesn’t even like doing the work she’s managed sold in.
Whoops! She’s accidentally pivoted her whole business!
Reasons why changing your offer and your audience at the same time can go wrong:
When you launch a new offer to a new audience this is known as ‘diversification’ and it’s the riskiest type of business growth strategy. If you’ve abandoned your both your current client type and offer, I call this a full frontal Business Pivot. It combines the risks of both of the previous two examples.
Times when changing your offer and your audience at the same time can work:
- When you already have good connections to the new audience.
- When you don’t have to change your offer too much.
- When you have the resources to run the new offers alongside your old-style offers e.g. if you have an established team to help you.
- When you’re able to charge more to your new audience than your current one.
- When you enjoy the challenges presented by the new audience more than your current offers and audience.
- When you’re eager for a totally new business direction i.e. it’s a conscious decision not an accidental one.
These are simplified examples
Examples abound of people who’ve successfully pivoted their audience and changed their offer without derailing their business.
I have clients who successfully sell to both entrepreneurs and corporates at the same time, for instance. They’ve weighed up the pros and cons and have the resources to do the juggle.
I have friends who’ve done a complete business pivot because they wanted a total change. They’ve made that decision consciously.
But that’s the danger- it’s tempting to think that if they’re doing it and they appear to be going great guns, then it’ll work for you.
The moral of the story is that you need to make these decisions in full awareness of what you’re doing and of the possible consequences.